To successfully manage food and beverage costs, culinary leaders need more than tight teamwork, dialed-in recipes, or purchasing discipline. Without clear visibility into how products are actually used versus how they are theoretically used, inefficiencies can hide in plain sight.
Morrissey Hospitality’s culinary leadership uses Craftable to close that gap by analyzing theoretical versus actual cost of goods sold (COGS) and using variance data to guide operational decisions. This approach allows culinary leaders to move beyond reactive cost control and into proactive, data-driven management.
Identifying the Real Cost Drivers
Theoretical COGS represents the ideal cost of goods sold based on standard recipes, yields, portion sizes, and sales. Actual COGS reflects real-world inventory movement, and includes waste, overproduction, counting errors, or process breakdowns. The variance between the two reveals where operational reality diverges from expectation.
At Dawn Manor, this variance analysis uncovered a significant issue that would have been nearly impossible to detect through traditional reporting alone.
After running a theoretical versus actual COGS report, the culinary team identified a large variance tied to a single high-cost product: beef used for prime rib and ribeye steaks. On paper, overall food cost simply appeared high. The reporting did not immediately indicate why.
But variance analysis told a different story.
A Structured, Analytical Approach
Rather than assuming pricing, purchasing, or a person was the problem, the team worked backward — meticulously and methodically. Inventory counts were reviewed for accuracy. Invoice inputs were validated. Recipe builds were audited to ensure yields and portions were correct. Theoretical inventory levels were compared against purchases and depletion data to confirm the baseline was sound.
Once the data was verified, attention shifted to operations.
The analysis revealed that while recipes and yields were built correctly, production and utilization practices were creating unnecessary and expensive loss. Coaching, process refinement, and tighter alignment between how beef was fabricated and how it was sold corrected the issue at its source.
Without theoretical versus actual reporting, the problem would have remained unclear. Food cost would’ve stayed elevated — with no clear explanation and no actionable solution.
Measurable Operational Impact
In September 2025, the variance between theoretical and actual usage for this single product reached approximately $8,000-$8,500. By November, that variance was reduced to roughly $2,000.
This represented a reduction of more than $6,000 in unexplained variance, driven solely by operational changes rather than pricing adjustments or reduced purchasing.
This outcome reinforced a core principle of the approach: when theoretical COGS is accurate, variance almost always points to a process issue, not a pricing problem.
Turning Insights Into Ongoing Discipline
Beyond this single example, theoretical versus actual analysis has become a recurring management tool. Variance data highlights where to focus training, where recipes may need refinement, and where inventory practices require closer attention. It also creates a shared, objective framework for conversations between culinary, operations, and finance teams.
By using percentage-based variance rather than raw dollars alone, leaders can compare performance across concepts and periods, identify trends, and prioritize high-impact opportunities for improvement.
Systems That Support Smarter Decisions
Morrissey Hospitality’s Craftable utilization demonstrates how the right systems, paired with experienced and thoughtful leadership, can surface issues early and guide meaningful corrective action. For owners and management partners, this approach delivers more than reporting. Disciplined, data-driven processes provide clarity, control, and confidence that margins are actively protected.
Services Provided:
Culinary & Beverage Transformation
- Culinary cost analysis and margin optimization
- Theoretical vs. actual COGS reporting and interpretation
- Recipe validation and yield analysis
- Operational coaching and production process refinement
- Inventory accuracy and purchasing oversight
