Costa Coffee Menu Development, Planning, and Design Report

This report delves into the crucial aspects of menu development, planning, and design within the context of a food and beverage (F&B) business, specifically using Costa Coffee as a case study. The report commences with an introduction emphasizing the menu's pivotal role in driving sales and customer satisfaction. It then explores the core principles of menu design, including the creation of balanced menus that cater to diverse customer needs, such as age, race, religion, medical restrictions, and lifestyle preferences. A comparative analysis of different menu types, including table d'hôte, a’ la carte, and set menus, is presented, evaluating their advantages and disadvantages. The report then analyzes three menus, considering both customer and business requirements, such as product quality, staff needs, space and equipment requirements, market conditions, cost considerations, and dietary factors. The impact of customer and business requirements on menu planning and design is discussed, emphasizing customer satisfaction and management decisions. The report concludes with recommendations for adapting to current trends in customer and business needs, and the importance of staying informed about market trends. Key considerations for costing and pricing menu items are also presented. This report is a valuable resource for students on Desklib.

MENU DEVELOPMENT,
PLANNING AND DESIGN

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................................3
MAIN BODY..................................................................................................................................................3
Principles of planning and designing menu.............................................................................................3
Comparison between different types of menus .....................................................................................4
Analysis of three menus with reference to customer and business requirements..................................5
Analyzing and discussing various impacts of customer and business requirements on the plan and
design of the menu..................................................................................................................................6
Conclusions and recommendations for following trends in customer and business requirements.........7
Budgeted menu of Costa Coffee..............................................................................................................8
Key considerations while costing and pricing menu items....................................................................12
CONCLUSION.............................................................................................................................................12
REFERENCES..............................................................................................................................................13

INTRODUCTION
Menu plays a very important role in any café or restaurant or foods and beverages
company. It states the items of different category for satisfying different needs of the customers.
It is regarded as a key document through which the sales of the café and restaurants take place.
The more attractive the menu is; the more sales can be generated by the café. There are many
principles that have been followed while developing and designing menu which will be
discussed in this report. In this report, Costa coffee a UK based, coffee house dealing in many
kinds of hot and cold drinks. It is specifically operating in the beverages sector of UK. This
report is based on how a hospitality consultant should take care of menu designing principles
while developing a menu for a café in order to meet various customers and business
requirements. Also, key considerations that must be taken care of while costing and pricing the
menus are part of this report.
MAIN BODY
Principles of planning and designing menu
There are many principles that are taken into account while planning and designing menu
for a café or F&B company. These are listed below:
Balanced menu: The most important things that must be kept in mind by the hospitality
consultant while developing menu for the F&B business is to design a balanced menu. Balanced
here refers to considering the consumer expectation and needs and the switching off between
different choices and dishes which is classified into five categories that is, fruits, vegetables,
dairy products, protein and grains (Rohde, Zahnd and Whitaker, 2017). The menu must be that
comprehensive which meets all dietary requirements. Also, the seasonal items must be offered
and changes according to the environmental changes. Whatever the offerings would be, it must
be produced within the overall budgeted cost.
Diversity considerations: The customers can be of diverse category where the dietary
requirements and preferences may not be the same. Customer falling in any particular category
has their own tastes and preferences. Some of the category which can be considered by the menu
designer for including diversified items are as follows:
Age: The most important factor that will be kept in mind is to provide items in the menu for all
age groups as they have differentiating choices (Hernandez-Ocana and et.al., 2018). As an old

age people prefer more of simple and light food while on the other hand young people prefer to
have heavy foods, also, small kids who generally prefer to eat fast foods. Accordingly, the menu
must include all those items which can be sufficient to satisfy needs of different age groups.
Race: menu must be designed that cater to the needs of culture prevailing in the target sector.
Accordingly, culturally popular dishes must be at the top of the menu card.
Religious belief: Religion is also an important factor, as some foods and drinks are not consumed
in one religion while the same is mostly preferred in other.
Medical restrictions: There are many restrictions that restrict customers to demand one type of
dish over other. So items must be flexible enough to be changed with the customer’s
requirements.
Lifestyle preferences: There are many changes in preference due to the particular lifestyle. As
vegetarians prefer more of dairy products and dishes made from vegetables. On the hand, non-
vegetarians prefer dishes made from animal carcass over other dishes (Vanderdonckt and Petit,
2019).
Costs: menu development must be carried out within the extent of the affordability and cost must
be covered through the sale of the menu items.
Comparison between different types of menus
Table d'hôte menu: This menu type offers limited choices in dishes. Here a total meal is offered
at a fixed price. One meal includes number of courses with limited choice therein. The items of
the menu are prepared in advance and are served on the time set (Hong and Baker, 2017).
The advantage of this type of menu is that it requires limited area for setting kitchen, limited
equipment and labor and food wastage is limited due to limited dishes.
The disadvantage is that it provides lesser choice which can’t satisfy changing preferences of the
customers. Also, the items for all categories of customers are not possible to be offered.
A’ la carte menu: Under this type of menu, there are many choices available for different dishes
under many courses. All the dishes under different courses are priced individually. Here those
items are served to the customers for which the order has been placed. All dishes need different
time for preparation. Here customers need to pay only for those dishes which they have ordered.
The advantage of a’ la carte is; it provides huge number of choices to customers. Such menus are
helpful in serving different category of customers (Morgenbesser, 2020). Here the individual

pricing helps in achieving higher revenue and profits as dishes are priced quietly higher. Also, it
encourages customized servings as per the customer’s desires.
The disadvantage of this menu is it requires huge space and equipment for preparing number of
dishes.
Set menu: It is a menu with a very less number of dishes to be choose from and a price is set for
that menu in advance. There are less dishes within the courses. No changes in item of the menu
is possible. Such menus are generally suitable in huge functions such as a marriage function in a
banquet hall, etc.
The advantages of this menu is this is fast in terms of saving time, reducing wastages and costs
and is generally suitable when customers visit for casual purpose.
The disadvantages are that here the portion size are not determined and not that attractive to be
used as marketing tool.
Analysis of three menus with reference to customer and business requirements
Customer requirements can be determined through the current trend among the target
market. With changing trends and innovations, customer's requirements changes. The lifestyle of
the person is the biggest factor which determine the customer's need (Gupta, 2019). Customer's
requirements revolve around four factors in terms of selecting cafe, like price, quality, choice
and convenience.
Talking about business requirements, it revolves around product quality, need of number
and experience of staff, assessing space and equipment requirements, protocols for kitchen
ingredients, studying condition of the market, cost considerations and dietary considerations.
There are three types of menu which can be used by F&B businesses to cater to their
requirements along with fulfilling customer requirements as the fulfilment of the latter ensures
the fulfilments of the former (Nemeschansky, von der Heidt and Kim, 2020).
Table d'hôte menu: This menu serves the purpose of both businesses and customers. The
business requirements can be met in a manner that it provides lower cost affairs along with a
lower price, high quality items and quicker service to fulfil customer requirements. But this
menu type doesn’t provide for more choices and accordingly not able to satisfy business’s
requirements for considering individual customer’s demand.
A’ la carte: This menu type is helpful for maximizing profitability by fulfilling business need
for providing that menu design which can met all customer’s dietary requirement. Also

customer’s need can be satisfied through good quality with more choices. But here prices are
quite high and there is problem with more waiting time to prepare each individual dishes (Asif,
Hina and Mushtaq, 2017). And the businesses are faced with higher cost due to more space and
equipment requirement.
Set menu: This menu is useful for businesses in meeting the large function’s menu set up. There
is one price set for the items of the menu card. Customer’s requirements during their events and
functions are met through this menu type. The businesses by setting up such menu can maximize
their profitability through taking orders for large functions and events.
Analyzing and discussing various impacts of customer and business requirements on the plan
and design of the menu
Menu planning begins from selecting the type of menu, then how many courses are to be
included in a menu will be decided, accordingly the items within each courses will be decided.
All the planning related to courses and items take place through considering principles of menu
designing. These principles guide in deciding upon the food shape, size, texture and flavors of
the food (Baiomy, Jones and Goode, 2019). Also determining personnel, space and equipment
available are also done during menu planning. The most important factor for consideration
during menu planning is the customer and business requirements as the design of menu must
align with the business and customer’s objectives. Menu planning is generally affected by two
major factors that is customer satisfaction and management perception and decision and the same
cannot be ignored at all. Like if the cost minimization objective of management has been
compromising due to the inclusion of particular item in the menu then this leads to halting
operations of the Costa coffee.
Impact of customer requirements on menu planning
Customer’s requirements are key to the menu planning and designing. The tastes and preferences
of the target segment must be taken into account while deciding upon menu items as this can’t be
done in isolation. On the basis of studying the preferences of the customers, the costa coffee
needs to define their target segment whom they are going to serve and satisfy. Management and
consultants needs to recognize current trends in that particular segment (Lu and Gursoy, 2017).
In order to decide upon menu, carrying out market research is very helpful to understand what
should be served and how it will satisfy their target customers. Preferences, habits and cultural

aspect of target segment must be considered in designing menu. If the customer requirements are
not met appropriately, it leads to non-fulfilment of business objectives.
Impact of business requirements on menu planning
Business goals are another important factor of consideration while designing menus. Businesses
are much concerned about the budget and cost associated with the items included in the menu.
Due to this, items not falling in the cost and budget range are never included in menu. The most
affecting factor of menu planning are equipment, capacity of the business and employment
requirement (Jetter and et.al., 2019). Like those items can’t be included in the budget which is
not prepared by the chefs. The management strives upon it biggest objective of earning profit
while considering customer’s expectations. Businesses are also worried about the resulting costs
as the minor increase in it lowers down the profit margins. In this way business objectives affect
the menu planning.
Conclusions and recommendations for following trends in customer and business requirements
It is necessary for the hospitality consultant to recognize and satisfy both the requirements of
customers and business. As this industry is highly ever changing, the café and restaurant need to
study and identify current trends among the society of target market to capitalize such trends.
They must keep on identifying and understanding the trends and customer’s expectations through
social media platforms, newspapers and magazines to cope up with the changing trends in the
F&B market. As the society nowadays has become more concern about health which results in
demand for more and more healthy and diet foods to avoid negative effects on the health. It is
recommended to the menu planners to include more of healthy dishes over unhealthy and non-
diet foods that helps the customer’s in keeping themselves fit and healthy. There are many
eatables included in food category which causes allergies and infections to human body and they
are quite common among the society which must be excluded from menu items and even from
ingredient list (Elshaer, 2020). Whatever the current trends may be in F&B sector, the
customer’s requirements in terms of price, quality, choices and conveniences should not be
compromised at all. Café and restaurant manager in addition to customer’s requirement must
ensure that they have experienced staff, efficient equipment with lesser preparation time for
producing menu items. Menu must be planned and designed according to the range of cost and
budget that has been affordable by the restaurant or café. They are requiring to ensure that their
business must earn enough profits by obtaining materials and equipment from suppliers at lower

prices in order to minimize the waiting time. At last, it is recommended to every business in
F&B to produce high quality and low cost products to meet both customer’s and business
requirements.
A detailed plan of a’ la carte menu
Costa coffee in order to meet the different needs of the customers will develop a’ la carte
menu, which helps them in providing huge number of items within different courses, soups,
starters, main course, deserts and drinks & sweets.
Market research: before developing and deciding upon the type of menu, Costa coffee has
conducted market research to study the current trends in foods and beverages. And through
research they get the idea that nowadays customers are more health conscious and demand
healthier, diet and non-diabetic food. Customers also wants to visit café just for deserts and
drinks as against the traditional concept of visiting for dining.
Courses: Costa coffee decided to include courses like appetizers, soups, starters, main course,
sweets, deserts and beverages. And within these courses there are number of items like 20-30
items according to customer’s preferences.
Price: Costa Coffee has applied competitive pricing strategy which will meet both business
requirement of earning sufficient profits and customer’s demand for reasonable pricing. The
popularity of products is considered for pricing menu items.
Layout and design: The menu will be simply designed in an understandable way, with
delightful colors. The items can be easily compare with one another in terms of price. Items
on which some discounts or offer will be provided has been mentioned in a high lightened
way.
KPIs: Costa coffee has identified through market research its KPIs to measure and compare
its performance with their competitors. There KPIs are Cost of producing menu items sold,
profitability and popularity of items, measuring food wastage, sales per customer, percentage
of labor cost in terms of revenue, number of visits undertaken by top customers and number
of bookings (Ahmad and et.al., 2018).
Justification for resolving problems: For resolving problem like maintaining taste of food,
quality of food and increasing cost of production, Costa coffee has appointed testing team for
approving taste and quality of food. Also, for controlling its cost of production, they have
devise measures for reducing wastage through quantity management and efficient equipment

for producing food and beverages items.
Budgeted menu of Costa Coffee
MENU ITEM Menu
Price
Plate
Cost
% Contribution
Margin
Quantity
Sold
Net
Income
Total
Cost
Popula
rity
Yorkshire
pudding
20 8.25 41.25% 11.75 15 300 123.75 3.30%
Shepherd's pie 12 4.85 40.42% 7.15 14 168 67.9 3.08%
Bangers &
mash
25 11.09 44.36% 13.91 40 1000 443.6 8.81%
Haggis 20 3.75 18.75% 16.25 35 700 131.25 7.71%
Ploughman's
lunch
30 7.6 25.33% 22.4 9 270 68.4 1.98%
Lancashire
hotpot
10 3.2 32.00% 6.8 10 100 32 2.20%
Apple crumble 15 5.95 39.67% 9.05 7 105 41.65 1.54%
Cream tea 8 2.2 27.50% 5.8 16 128 35.2 3.52%
Café mocha 10 5.75 57.50% 4.25 19 190 109.25 4.19%
Caramel
Machhiato
15 9.65 64.33% 5.35 7 105 67.55 1.54%
Vanilla latte 18 10.25 56.94% 7.75 21 378 215.25 4.63%
Cheese burger 20 14.36 71.80% 5.64 23 460 330.28 5.07%
Chicken Burger 25 16.63 66.52% 8.37 24 600 399.12 5.29%
Burger-
veggies
15 10.63 70.87% 4.37 11 165 116.93 2.42%
Hamburger 30 18.36 61.20% 11.64 13 390 238.68 2.86%
Chocaccino 15 7.96 53.07% 7.04 53 795 421.88 11.67%
Cream Irish 15 10.21 68.07% 4.79 22 330 224.62 4.85%
Royal coffee 16 11.21 70.06% 4.79 52 832 582.92 11.45%
Chocolate- hot 20 14.21 71.05% 5.79 35 700 497.35 7.71%
Cappuccino 10 5.89 58.90% 4.11 21 210 123.69 4.63%
Red velvet
coffee
20 16 80.00% 4 7 140 112 1.54%

Items that are generating high revenue for Costa Coffee
Items name Resulting
revenue
Bangers &
mash
1000
Royal coffee 832
Chocaccino 795
Haggis 700
Chocolate-
hot
700
Per cent of
total revenue
Approx.
50%
From the list of 22 items offered by Costa coffee Menu, the above high revenue
generating items contribute approximately 50% of the total net income. They must emphasize
high control towards their quality and existence in addition to framing strategies to keep the
current status as it is.
Energy cost of Costa Coffee
Energy is always advisable to be used appropriately. Costa Coffee needs to ensure that
they are optimally utilizing energy through obtaining energy efficient equipment to produce
items and dishes. Such reduction in energy utilization leads to lower costs of earning profits.
Energy cost is around 3% which quite acceptable, but this must be maintained always.
Energy
Cost
Heating 72
Lighting 48
Water 48
Insulation 24
Others 61.8
Total 240

Staff cost of Costa Coffee
Staff must be efficient and experience to produce the menu items at the lowest possible wastage
and highest possible quality. The cost of staff includes payment made to waiters, chefs, etc. the
number varies with the size, menu items and type of menu. It is 6% of net income.
Labor
Cost
Chefs 32
5
Waiters 10
0
Other Workers 75
Total 50
0
Analysis of profitability of Costa Coffee through calculating various ratio of cost and profit
Food Cost percentage Total Food Cost / Total Sales 54.34%
Total Contribution Margin Total Sales - Total Food Cost 3682.73
Average Contribution
Margin/Customer
Contribution margin / Quantity Sold 8.11
Contribution margin/ menu item Total Sales-Total Food Cost/Quantity
Sold
8.11
Budgeted income statement of Costa Coffee
Income Statement Amount
Revenues 8066
Materials 1200
Labor cost 500
Energy Cost 240

Total 2000
Gross profit 6066
Fixed Cost 1000
Marketing 250
Profit 4816
Cost to gross profit margin ratio of Costa coffee
This ratio determines the proportion of amount that has been left with business out the
amount received as revenue after paying all the costs associated with their operations.
Cost to gross Profit Margin
Ratio
Sales –
COGS /
Sales
8066 –
2000 /
8066
75.20
%
This ratio is 75.20% for Costa coffee, which is considered to be much appropriate.
Break-even point of Costa Coffee
Break Even Point
BEP = Fixed Cost / Contribution Margin
1329.71
This point determines the sales at which the Costa Coffee will be able to meet its all the
costs. Here, Costa Coffee needs to generate revenue equivalent to 1330 approximately.

Key considerations while costing and pricing menu items
Competitors pricing policy: while planning for menu items, Costa coffee must consider the
pricing of their menu items in terms of their competitor’s price. This helps café as a marketing
tool, and in addition to this the menu planner must ensure that the business and customer
requirements for quality products should not be compromised at all.
Affordability: This factor must be considered from both business and customer’s perspective,
where higher cost of products reduces profit margin along with higher prices of products which
affects customer’s affordability (Peters and Remaud, 2020).
Environmental considerations: in case of F&B business, they must ensure that food wastage
must be minimized along with carbon footprint.
Nutritional value considerations: whatever the ingredients of the products may be, it must
enhance nutritional value in accordance customer’s expectations.
Labor cost: Labor cost must be of higher proportion of total cost in case of café and restaurants.
CONCLUSION
From the above report it has been concluded that menu planning can’t be done in
isolation without considering customer’s requirements, their expectation and taste and
preferences prevailing in the target segment. Along with customer’s consideration there is a need
to be much concern about the business requirements such as lower cost and quality products in
addition to earning sufficient profit to cover costs.

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Online
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