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4 Ways to reduce costs in the hospitality industry

Your cost of goods sold (COGS) fluctuates with the seasons. And with disruptions to the supply chain and fluid border restrictions, there’s rarely been a tougher time to balance your COGS than right now.

But there are ways to reduce your COGS (without impacting quality) even in times as volatile as these.

Read on to see how you can keep on top of your COGS with these four simple steps.

1. Order in bulk

Buying in bulk is a sure-fire way to reduce your COGS and increase margins – depending on the amount you order, bulk buying can be up to 50% cheaper than ordering in smaller quantities.

While it’s not always possible to buy all of your ingredients in bulk, particularly perishable items, you should be able to identify your most frequently used ingredients with a longer shelf life and bulk order these a few times throughout the year.


Things like flour, sugar, salt, pepper, spices, condiments, sauces and tinned goods all have a long shelf life and will save you precious dollars throughout the year when you order them in bulk.

2. Align your menu with seasonal produce

The best way to keep costs consistently low is by purchasing seasonal produce.

Out-of-season produce, such as tomatoes and asparagus, can cost as much as +300% more for the same product in season. Seasonal produce is in high supply and is available locally – so it’s a much cheaper option for your menu. Plus, in-season produce is typically fresher and tastes better – which is a win for you and your customers.

3. Track and reduce your food waste

Food waste costs hospitality venues thousands of dollars a year. Therefore, investing time into tracking and reducing the amount of food waste your kitchen produces will help inject extra dollars into your bottom line.

When you know what you’ve wasted, you can assign costs to those losses and understand the impact. When you know why you’ve wasted, you can take measures to prevent it from happening again – saving you money in the long run.

4. Make it homemade

Making everything on your menu from scratch can be time-consuming, but it’s a great way to keep costs low and minimise food waste to keep your margins healthy and profits high. Plus, it’s the best way to ensure all your dishes are unique to your venue.

Another great thing about making your own ingredients is that you can bottle or package it up to sell – creating an additional source of revenue and further driving down your COGS.


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