Q: Can you break down the cost of goods sold (COGS) or the plate cost of a soft-serve dish in a finer dining full-service concept vs. a hot fudge sundae at McDonald's?
Berj: The factors going into the COGS calculation are the butterfat percentage, quality of the ingredients and flavorings, and overrun.
Butterfat is what dictates the difference in dairy costs. The higher the butterfat, the more expensive the dairy. Soft serve mix used in fast food is probably around a 4% butterfat, which is on the lower side of butterfat; the minimum FDA requirement for butterfat to call something “ice cream” is 10%. In the dessert world, we typically use cost per ounce as the cost measure. The cost per ounce for McDonald’s soft serve mix is probably around 6-8 cents, whereas our product ranges from $.9-$.16 per ounce, depending on the recipe the customer decides to use. For example, if you decide to use pure pistachio paste and high quality milk and cream, you are going to see your COGS on the higher end of that spectrum.
There’s also the concept of overrun when costing out a serving of ice cream. Overrun is the amount of air incorporated into ice cream when churning it. Overrun equals free money. It’s the opposite of shrinkage; the more you can achieve, the lesser your cost of goods sold. So fast food chains want more overrun in their product, but it comes at a quality cost. The more overrun, the less luscious, dense, and decadent the dessert feels. For example, fast food soft serve is comprised of probably about 50-70% overrun (or air). The opposite is that our customers, finer dining establishments, and fast-casual concepts are running about 20-30% overrun, much less air, very rich, decadent, so you’re selling more product than air. That’s why you notice such a big difference when eating soft-serve from fast food restaurants versus Laserwolf in New York or similar restaurants.
So, after factoring in the cost per ounce and overrun, here’s the approximate breakout:
$.40-45 per serving of soft serve
+ $.10 per cone/cup
+ $.20 per hot fudge
= about $.75 per serving for a $4.59 hot fudge sundae from McDonald’s
The COGS breakdown for a nicer restaurant using our product comes out to:
$.70 per serving for soft serve
+ $.10 per cone/cup
+ $.50 for garnishes such as date molasses, cookie crumbs, olive oil, etc.
= about $1.30 per serving for a $12 soft-serve dish
That’s a 10% plate cost, one of the highest-margin menu items in a restaurant!