How do I calculate popularity and profitability correctly before placing items into the menu engineering matrix?

Before you label any dish a “star” or a “dog,” you need two clean numbers: how often it sells and how much it truly contributes after direct costs. When popularity and profitability are calculated consistently, the menu engineering matrix becomes a practical decision tool instead of a guessing game.

The goal is simple: measure sales mix (popularity) and contribution margin (profitability) using the same time period, the same item definitions, and the same cost rules for every item. That consistency is what makes the classifications meaningful.

Popularity: calculate it as sales mix, not “what feels popular”

Popularity in menu engineering is typically measured by how often each item sells compared to the rest of the menu in the same category. This is commonly expressed as a sales mix percentage.

Step-by-step popularity calculation

• Pick a time window that reflects normal trading (commonly 4–8 weeks, excluding unusual events or closures).
• Group items into comparable categories (for example: burgers with burgers, cocktails with cocktails, desserts with desserts).
• Count the number of units sold per item in that category.
• Calculate sales mix % for each item: units sold for the item ÷ total units sold in the category × 100.
• Compare each item’s sales mix to the category average.

In most restaurants, popularity is judged within a category because comparing a main course to a side dish (or a cocktail to a coffee) can distort the results.

A widely used rule of thumb is to treat “above average” popularity as anything at or above the category average. Some operators apply a small adjustment factor to avoid labeling too many items as popular, but the key is to apply the same rule across the category every time.

Profitability: use contribution margin per item, not food cost % alone

Profitability for the matrix is typically based on contribution margin (sometimes called gross profit per item): the selling price minus the direct cost to produce that item. Food cost percentage can be useful for monitoring, but it can mislead when used as the main profitability measure.

Step-by-step profitability calculation

• Start with the item’s actual selling price after any standard discounts you regularly apply.
• Calculate the direct cost per portion (ingredients, standard garnishes, disposables if they are always included).
• Include modifiers only if they are commonly added and predictable; otherwise keep them separate.
• Contribution margin = selling price − direct portion cost.
• Compare each item’s contribution margin to the category average contribution margin.

To keep it fair, base your costs on standard recipes and portion sizes. If the kitchen plates “by eye,” you’ll get numbers that look precise but don’t reflect reality.

What to include and exclude so the numbers stay reliable

Most operators get inconsistent results because items are not defined the same way in sales data and costing. Decide your rules once, then apply them across the board.

Common costing rules used in most operations

• Include: core ingredients, standard sides, standard garnishes, sauces included by default, and mandatory packaging for takeaway items.
• Exclude: fixed overheads like rent, base payroll, utilities, marketing, and platform subscriptions (these matter, but they don’t belong in item-level contribution margin).
• Handle promos consistently: if an item is frequently sold with a permanent discount or bundled price, cost it at the effective selling price customers actually pay.
• Normalize waste and yield: if a product has trimming loss (for example, raw meat or fresh fish), cost the usable yield, not the purchase weight.

For bars and cafés, the same principle applies. Your direct costs are the pour cost and standard garnish for a cocktail, or the coffee dose, milk portion, and cup/lid for takeaway drinks.

How it’s typically done in practice

A practical workflow used in many restaurants is to run menu engineering as a repeatable monthly or quarterly routine, not a one-time project. It usually looks like this:

• Pull sales by item for the chosen period and split into clear categories.
• Confirm item definitions match your recipes (same size, same build, same included sides).
• Update recipe costs with current supplier prices and realistic yields.
• Calculate sales mix % and contribution margin per item.
• Compare each item to the category averages and place it in the matrix.
• Document decisions and track results after changes (pricing, placement, descriptions, portioning).

When this cycle is repeated, you’ll spot patterns quickly: items that sell well but need cost control, items with strong margins that need better visibility, and items that are draining space.

Real-world examples of clean calculations

Restaurant example: burgers category

Say your burger category sold 1,000 units in 6 weeks. The Classic Burger sold 220 units, so its sales mix is 22%. If your category has 8 burgers, the average sales mix is 12.5%, so the Classic is above average on popularity. If it sells for 14 and costs 5.20, its contribution margin is 8.80. Compare 8.80 to the average burger contribution margin to decide if it’s above or below average on profitability.

Café example: iced drinks category

If an Iced Latte is ordered constantly but your milk portion is inconsistent, the calculated margin will be unreliable. Standardize the recipe first (espresso dose, milk volume, cup size), then recost. Only after that should you classify it, because the matrix will otherwise point you to the wrong fix.

Bar example: signature cocktails

A signature cocktail may look profitable on paper, but if it’s often sold during a standing happy hour discount, its effective selling price is lower. Use the typical selling price customers actually pay during the analysis period, not the full menu price, or you will overstate profitability.

How digital menus and management systems can support the process

Digital menu and management systems can reduce the “messy data” problem by helping keep item names, variants, and availability consistent across locations and menus. For example, a platform like Menuviel can support cleaner item management by keeping one item record with standardized options and visibility rules, which makes it easier to compare performance over time without duplicate or mismatched items.