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2. Menus Are Business Proposals

And thinking that way helps demystify dinner.

2a. How do restaurants make (and spend) money?
Revenues are simple: customers’ checks, split between food and beverage. Costs are more extensive but don’t vary much—primarily goods, labor, and rent—and most restaurants aim to meet the same benchmarks. For example, one successful downtown restaurant that did over 200,000 covers (or checks) last year took in more than $14 million in revenue, about 60 percent of which was in food sales and about 40 percent in beverage. The menu prices ran about four times the cost of goods. Labor costs ate about a third of all revenues, and rent about 8 percent. The restaurant made about a 10 percent profit.

Another successful restaurant does lunch, dinner, and weekend brunch. According to a snapshot of sales from one week last year, lunch was the least successful meal: Revenues from five days of lunch were around $20,000, similar to what was made over two days of weekend brunch. Dinner brought in more than $100,000, almost half of which was in alcohol—and for this restaurant, half of that was in draft beer and liquor, which are marked up highest. But this restaurant has a generous “comps” policy: It forfeited more than $100,000 in sales last year to give VIPs and regulars another round on the bartender.

2b. Why are short ribs on every menu?
“There are no ‘new’ cuts of meat,” says Pat LaFrieda president Mark Pastore. “There are pieces that are hot, and then they’re not.” Much is dictated by seasonality: “Skirts and hangers go up in summer,” he says; winter is all about the short rib, a very rich, very fatty cut. “Ten, 12, 15 years ago, it was mostly Asians who were buying short ribs, and they were three, four dollars a pound,” says Pastore. “You have short ribs that are seven, eight dollars a pound now.” Chefs love short ribs for their unctuous quality and relative affordability. It’s the signature dish for two at Upland, and displaces traditional, pricier, and flavor-challenged filet mignon in Dirty French’s steak au poivre.

2c. Why has cauliflower become an entrée?
You can slice it like a rib eye. It’s more imposing than asparagus, with a mild flavor that’s adaptable to diverse treatments at restaurants like Aldo Sohm Wine Bar, where a whole head comes dappled in “roasted chicken salt,” and Narcissa, where chef John Fraser charges $24 for yogurt-marinated cauliflower inspired by Indian tandoori cooking. It’s also, obviously, a lot cheaper than meat. Though Fraser points out that vegetables can be tricky, too. “The spoilage rate is about the same, and from a labor standpoint, it’s just as difficult to slice.”

2d. Should I buy wine by the bottle?
Yes. The standard formula for bottle markups is three times wholesale cost, says Estela co-owner and beverage director Thomas Carter, who prefers to mark up wines that cost him under $100 between 2.5 and 2.75 times, and those above $100 even less. When it comes to glasses, though, “loss” is always built into the price—either from overpouring or the potential for spoilage. “You’ll have better value by the bottle,” says Carter, who arrives at his glass price by the formula of 3.5 times wholesale, divided by five.

2e. I ordered Champagne. Where’s my flute?
There is much industry discussion about glass-ware (stemmed versus stemless, Riedel versus Zalto), yet none as heated as the flute debate. “It’s absolute bullshit,” says Paul Grieco, who dispensed with his own supply at Hearth and Terroir two years ago. “That eight-ounce flute that a lot of us used to use, we filled it within half an inch of the top. You couldn’t swirl the glass; it’s so fucking narrow you can’t even put your nose in this thing, and the only thing we’re doing is appreciating the bubbles? That is so 1968.” Grieco switched to an all-purpose still-wine glass, which makes stocking easier and is also “a vessel you can actually appreciate the wine in.”

2f. Why do waiters keep telling me, “All the food is meant to be shared, and served as soon as it’s ready?”
We live in a small-plates world, one in which the kitchen fires orders immediately—to get food out hot to hungry guests, sure, but also to encourage more spontaneous ordering and turn tables faster.

Why is my bartender serving my Negroni from a bottle?
“Because it tastes better!” says Union Square Hospitality Group consultant Richard Coraine. “When a cocktail is bottle-aged, it not only allows the restaurant to control and customize the presentation, it also smooths and deepens the flavors of the ingredients.” Preparing cocktails ahead of time also reduces stress during peak bar hours.

2h. Why does every pasta on this menu cost $12?
The West Village trattoria Cotenna takes the anxiety out of ordering by seeming to give uniform prices to each category: $10 salads, $10 appetizers, $12 pastas. This isn’t pure generosity. “It creates a sharing experience, gets people interested in new items, and gets product moving,” says the Culinary Institute of America’s Ezra Eichelberger. And that’s before the waiter rattles off pricier specials, including all the entrées. Plus: Over 70 percent of the wines by the glass cost more than $12.

2i. Why is it so hard to find a cocktail under $14?
The cost of a cocktail comes from the quality of the alcohol and labor. Dive bars get away with slinging cheap whiskey sours by using bargain-basement hooch. Craft-cocktail bars operate at a lower profit margin. As Boilermaker’s Don Lee explains, when you pay $14 for a Herradura Blanco margarita instead of $10 for one with cheap tequila, almost the entire up-charge goes to the liquor company. In food terms: “You’re getting a much better value for your dollar going to Eleven Madison than you are going to McDonald’s.”

2j. I don’t like carrots, so why am I drawn to Narcissa’s carrots Wellington?
Because it’s at the top of the list under the menu’s “Mains.” “The first and last item in a category sell the best,” says Eichelberger.

2k. How dare they charge for bread?
The resurgence of artisanal bread-baking has spurred some neigh­borhood restaurants to up their bread-basket game and make their own, but they can’t afford the labor required for bread on a par with fine-dining restaurants, where the cost is built into the rest of the menu. The solution isn’t terrible: Much better bread, and carbophobes don’t have to subsidize bread eaters’ habits.

2l. Why oysters?
Ian MacGregor, owner of the Lobster Place and Cull & Pistol, credits the recession. Oysters, often sold at happy hour for $1, fall under the heading of very affordable luxury, and restaurants use them as loss leaders to get diners in the door. “We make no money on them,” says MacGregor, “but people buy beer, they buy wine, they buy assorted appetizers.” And, as Esca’s Dave Pasternack points out, oysters don’t require much fuss. “They keep well, turn out consistently, and require little labor,” he says.