Striploin Yield Drift and a Menu Price That No Longer Covers Cost
A central production kitchen supplies six steakhouse restaurants. The purchaser has switched to a new striploin supplier at €18.50/kg AP, with a 3% annual rebate, and wants a 12-month contract. The specification is 5–6 kg loins, fat cover ≤6 mm. Your yield test on 40 loins (220 kg AP) gives 154 kg saleable after removing chain, silverskin and fat to 6 mm; 9 kg goes to usable trim and 6 kg to waste. The previous supplier, at the same AP price, delivered 78% saleable yield on the same spec. The 200 g raw portion sells at €24.00; the target food cost is 30% maximum. Grill cooks report that the new meat is darker, looser and shrinks more; a 200 g raw steak now yields about 150 g cooked instead of 160 g. Weekly volume is 1,100 portions. The rebate is worth about €9,000 a year. The purchaser argues that the new meat is cheaper and the yield difference is just trimming.
1. Calculate the saleable yield, portion cost and annual cost impact. Should the contract be signed at the quoted price and rebate? Show your reasoning.
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Yield: 154 kg ÷ 220 kg = 70.0% saleable, against 78% previously. That is a loss of 8 percentage points.
Portion cost: cost per saleable kg = €18.50 ÷ 0.70 = €26.43/kg. At 200 g raw, portion cost = €26.43 × 0.20 = €5.29. Previous supplier: €18.50 ÷ 0.78 = €23.72/kg, portion = €4.74. Increase = €0.54 per portion, or 11.4%.
Annual impact: 1,100 portions/week × 52 = 57,200 portions. Extra cost = 57,200 × €0.54 = €31,000 a year. The 3% rebate is worth about €9,000, so the net extra cost is about €22,000 a year. The rebate does not cover the yield loss.
Cooking shrink: if 200 g raw now yields 150 g cooked instead of 160 g, the customer is receiving 6.25% less edible steak. To restore the 160 g cooked portion at the new shrink, raw weight must be 160 ÷ 0.75 = 213 g, raising portion cost to about €5.63, an extra €0.89 per portion and about €50,900 a year. Even if the menu price stays at €24.00, the food cost is still below 30%, but the contribution margin falls and the guest value proposition is damaged.
Decision: do not sign at €18.50 with a 3% rebate. To match the old portion cost at 70% yield, the maximum AP price is €4.74 ÷ 0.20 × 0.70 = €16.60/kg, a 10.3% reduction. Alternatively, the supplier must meet a verified 78% yield. The trim credit of 9 kg at, say, €6/kg is only €54 per 220 kg, or about €0.25/kg AP, and does not close the gap.
2. What could explain the lower yield and greater shrink other than supplier fraud? What checks would you run before rejecting the meat?
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The yield difference may be real and still not be fraud. Check the specification first: if the loins are 6.5 kg with 10 mm fat cover, they are out of spec, and the extra fat and weight explain the lower saleable percentage. Weigh and grade each loin, measure fat cover at three points, and photograph the trim. Confirm the trimming standard was the same: chain off, silverskin removed, fat levelled to 6 mm, no over-trimming by a new cutter. Check scale calibration and whether the 40 loins were a random sample or the first 40 off the pallet.
Meat quality can also explain shrink. Darker, looser meat may indicate different breed, age, aging time or stress status. Measure ultimate pH (normal approximately 5.5–5.8), colour, drip loss and cooking loss on a standardised sample. High-pH DFD meat usually has better water-holding, not worse, so darker meat with greater shrink points more to a different cut, heavier fat cover, shorter aging or temperature abuse in the chain. Check delivery temperature, packaging integrity and whether the product was thawed and refrozen. Compare cooked weight using a fixed time and core temperature, not grill-cook judgement.
Before rejecting, ask the supplier for the cutting specification, carcass grade, aging days and fat-depth data. If the sample fails the fat-cover or weight spec, reject on specification, not on yield alone. If it meets spec but yields 70%, the price must change.
3. If the supplier cannot improve, how would you adjust the menu and production plan while protecting the €24.00 price point?
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Start from the contribution margin, not only the food-cost percentage. At €24.00, the old portion cost of €4.74 gave a 19.8% food cost; the new €5.29 gives 22.0%, which is still within the 30% ceiling. The real question is whether the lower yield and greater shrink justify a menu change, a price change or a supplier change.
Options to model:
- Re-specify and blend supply. Keep the old supplier for the 200 g steak and use the new meat only for a lower-yield-tolerant application such as stroganoff, ragù or staff meals, where trim and shrink are less visible. This protects the signature dish without a price rise.
- Change the portion and price architecture. A 180 g raw portion at €22.50 may preserve margin and perceived value better than a 200 g portion that cooks down to 150 g. Test with sensory and sales data, not intuition.
- Pre-portioned or pre-trimmed product. Compare the total landed cost including labour: 40 loins at 12 minutes trimming each is 8 labour hours. A pre-portioned product at a higher kg price may be cheaper once yield and labour are included.
- Menu engineering. If the steak is a star, protect it and take margin from low-volume, high-cost items. If it is a plough-horse with low contribution, re-engineer the plate rather than raise the headline price.
The production plan should separate the two meat streams, update the yield factor in the recipe system, re-cost all six restaurant menus, and run a four-week sales test before committing to a 12-month contract.