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Controlling Buffet Costs

Buffets have always been an integral part of the casino business. Created as a mechanism for keeping players at the casino to maximize gaming revenue, buffets were introduced in
Las Vegas at very low prices. So low, in fact, that the buffet price alone would be responsible for bringing customers to the casino. Huge billboards advertising the $2.00 buffet (or something along those lines) would actually lure people to the casino who
might not otherwise have gone there. Once inside, they would have to walk past all the slot machines to find the buffet, and perhaps would be tempted to stay and drop a dime or two.

Things have changed dramatically since then. Marty Miles is President of Casino Food and Beverage Solutions, LLC, a professional F&B consulting firm with offices in Las Vegas and
Houston. Miles, who was formerly the Corporate VP of Food and Beverage for Harrah's Entertainment, Inc., says the new focus is customer loyalty. “Our focus group studies indicated
customers wanted three things - they wanted a varied menu with plenty of choices, they wanted to control their time, and they wanted unlimited portions - in that order,” said Miles.
“These requirements can only be provided through the buffet format. This is particularly important in Indian gaming locations serving high-frequency markets.”

While it appears obvious from this example that casino buffets are important, the fact is most casinos lose money on them. Food costs in the 50-60% range are not unusual and back of house labor costs are frequently much higher than that required for other restaurant venues. For that reason, it is even more important to be sure the buffet's food waste is kept to a minimum.

Step 1: Is a Buffet Necessary?

The best way to control buffet costs is not to have a buffet. Victor Gonzalez is the Executive Director of Food and Beverage for the Pasqua-Yaqui Tribe's casinos near Tucson, Arizona. The tribe operates two casinos, Casino of the Sun and Casino del Sol. Casino del Sol does not offer a buffet. “We believe we actually turn customers faster with the coffee shop than the buffet,” says Gonzalez. “The buffet averages a turnover of 35-40 minutes, while the coffee shop is more like 25-30 minutes. If the objective is to keep people on the floor, we believe it works better without the buffet than with it. We even hand out beepers to avoid customers waiting at the restaurant for a table. That way they stay on the floor even longer when the restaurant is crowded.” Gonzalez notes, “It may be easier for us to do this since we offer a buffet at our other casino, which is not far away.”

While this approach may not work for all casinos, it apparently works well for Casino del Sol. Food cost for the coffee shop is lower, and much easier to control than it is for the buffet at their sister property. On the other hand, Miles points out, “When the Venetian opened in Las Vegas without a buffet, Harrah's, the closest large casino to the Venetian, saw an immediate increase of 30% in buffet covers.” Miles believes the Venetian to be the only large casino on the Strip that does not offer a buffet.

Step 2: What is the Overall Objective for the Buffet?

Russ Burbank is Vice President of Operations for Casino Arizona. Owned by the Salt River Pima Maricopa Indian Community, Casino Arizona consists of two fairly large casinos near Phoenix, Arizona. According to Burbank, “The biggest mistake casinos make is not thinking about what they are trying to accomplish with the buffet. As a result, the price/ quality relationship, hours of operation, and target customers are frequently not optimum.” Burbank points out the difference between an objective to keep the buffet profitable as opposed to an objective to increase traffic flow to the casino. “If profit is the objective, then the food costs should be at or below 40%,” said Burbank. “But that means lower selection and lower quality or a higher selling price. If traffic is the objective, the food cost will be higher, but the quality will also be better.”

Very few casinos clearly set buffet objectives. Is the objective to bring new traffic to the casino? Is the objective to keep existing traffic on the floor longer? Is the objective to attract lower-income, middle-class or affluent gamblers? Or is the objective to build customer loyalty? Clearly defining the objectives helps determine the remaining decisions.

For example, affluent customers will demand higher quality, but will not mind a higher price. Lower pricing might attract more people to the casino, but they may not be able to gamble as much or as often. Encouraging families to come to the casino may result in much higher food costs and actually reduce the traffic on the floor, since children can't gamble, and some adults don't want to be around them when gambling. Miles says that Harrah's answer was fairly simple. “In many locations, we didn't offer children's prices at buffets, and we only provided discounts to player's card holders. This had the effect of reducing unwanted traffic while encouraging our best customers to remain loyal to the casino.”

Burbank states it simply. “Our overall objective is to attract middle to upper-middle class adults to our adult entertainment venues - food, gambling and shows. All the other decisions flow from that simply stated objective. Buffets are set up to provide a good price/value relationship offering multiple choices the target market would like. Lunch buffet prices are lower than dinner buffet prices. The all-day buffet strategy (11:00 a.m. - 3:00 p.m. and 4:30 p.m. - 11:00 p.m.) is especially good for seniors who want to eat one large meal at 2:00 p.m. We do not target families.”

Step 3: Minimize Waste

Our three experts share some of their secrets for reducing buffet costs:

Gonzalez: “The manager or chef at the end of shift is key - they need to make sure production is reduced properly. Much of the waste happens at the end of the day.”
Burbank: “Use theme nights and rotating menus. Proteins that have not been fired can be used in subsequent buffets with a different preparation consistent with the theme.”
Miles: “I worked with smallwares manufacturers to develop hot pan inserts of varying depth. We started the buffet with shallow pans, moved to deep pans during heavy times, and then moved back to shallow pans near the end of day. In this way, our pans still looked full and we provided the same variety without all the waste associated with over-preparation to fill pans.”
Gonzalez: “Use large drink cups to increase liquid intake - resulting in less food intake and less server labor to keep drinks filled. It is also more convenient for the customer.”
Burbank: “Carvers must be trained to cut small slices. One carver might get only 7-8 slices out of a roast, while another could get 14.”
Miles: “Avoid the use of cookies, whole fruit, individual yogurts, or anything with no mess that can be consumed later. I literally watched people stuff these items into their purses at their table or sometimes right at the line!”
Gonzalez: “Serve shrimp with the shell on. People take less if they have to work harder.”
Burbank: “Prep known quantities in advance. Keep track of prep, portions and fired quantities. Keep waste on the line to a minimum by using smaller containers and reducing batch sizes as closing nears. Use excess for employee dining on the same day if possible.”
Miles: “Consider using a cook-chill approach. Recipes can be prepared weeks in advance and blast-frozen, reducing labor costs, product availability issues, and allowing for a ready supply, which can be re-thermalized as needed.”

Step 4: Serve It Up!

All three gentlemen could have filled many more pages with suggestions and tips, but they all agree that forecasting is critical. According to Burbank, “The ordering forecast is where it all starts. Look at covers and usage to determine averages, then order enough to produce the right number of portions.” Miles takes it a step further. “You need good data to forecast properly. Without it, I could never have been as confident in my forecasting, or in my determination of what was popular and what was not. And of course, knowing the cost of these recipes and the buffet as a whole helped us keep a lid on food costs.”

Cover counts, usage consumption, recipe costs and menu performance are just some of the types of data provided by today's food and beverage management systems. Some go even further and develop actual forecasts based on this information, along with current inventory levels. Some provide production plans and schedules. Planned, operated and controlled properly, it is possible for buffets to not only accomplish the objective set by management, but to do so without additional, unnecessary loss. Who knows - buffets could even become profitable! ¨




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