The Challenges of Restaurant Dessert Menus and Profitability

Desserts can enhance restaurant experiences, driving repeat visits and increasing profits when executed creatively.

### The Sweet Struggle: Why Restaurant Desserts Often Disappoint
* 🍰 Many restaurants offer a limited dessert selection, typically featuring options like **cheesecake, chocolate lava cake, and fruit pie**, which can lead to a **monotonous dining experience**.
* 📉 Restaurant profit margins are generally **below 10%**, making it crucial for menu curation to **maximize profits while balancing pricing to attract customers**.
* 🍹 Drinks are relatively cheap to make and can be marked up significantly, providing a **greater profit opportunity** compared to desserts and appetizers, which average around **22% profit margin**.
* 🐔 Cross-utilization of ingredients, such as using a **whole chicken in various dishes**, helps restaurants manage costs effectively, but desserts often require **unique, expensive ingredients** that are harder to incorporate into the overall menu.
* 💰 Ingredient costs fluctuate due to factors like inflation and supply chain issues, making desserts one of the **most expensive items to produce**, alongside appetizers.
* 👩 In-house pastry chefs are often the first to be cut when restaurants face financial struggles, leading to a **homogenization of dessert offerings** across eateries.
* 🌟 A shift in consumer behavior shows younger diners, particularly Gen Z and Millennials, are more inclined to order desserts, especially when they are **visually appealing and marketable**, like the viral lemon cheesecake at Bad Roman.
* 🍽 Ultimately, desserts play a pivotal role in enhancing the dining experience, serving as a **memorable conclusion** that can **drive repeat business** and encourage customers to **share their experiences with others**.

There's something you might notice when you go out to eat, depending on the restaurant. The entrees and drinks can vary a lot, but then the dessert menu drops and you're almost always left staring at the same options: cheesecake,

maybe a chocolate lava cake, and some type of fruit pie. Probably sorbet or ice cream. Desserts in a lot of restaurants are kind of boring. There's a reason why, but it doesn't have to be this way.

Menu curation can make or break a restaurant because, frankly, it's really hard to make money in this business. Restaurant profit margins are not particularly high. It's interesting because so many people want to go into the restaurant business because they think it's

glamorous or whatever. It's definitely less than 10%. Kathryn Gordon teaches restaurant and culinary management at the Institute of Culinary Education in New York. The revenue comes from food and beverage sales, and then there's the cost of goods

to support those sales—things like ingredients and staff salaries, rent, electricity, and more. What's left is a low number. And then, of course, it has to be taxed. The menu is really one chance to maximize profits,

but it's a delicate balance. Charge too much, and people won't buy it. Charge too little, and you'll miss out. When priced right, the entrees will bring in the most profit. And it's not really a secret that drinks are relatively cheap

to make and it's easy to upcharge. Both alcoholic and non-alcoholic. And people will often pay that multiple times throughout a meal. But outside of drinks and entrees, it's not so easy to make money. Look at appetizers, for example, with an average profit

margin all the way down at 22%. Luckily, if you're savvy, there are ways to work appetizers into a menu and recoup those costs. So what people try to do is what we call cross-utilization of product. For example, you can buy a whole chicken cheaper

than pieces of chicken, and then you might be able to use the chicken bones after it's broken down for your base, for your stock. And then that stock can become a sauce, or it can become a soup, and you can sell that,

and then you can sell, like, your chicken breast, like on a salad or something, you know, at lunch. And then you can have the chicken thighs in a dish at dinner time. And then you might even have, like, little scrap pieces.

And I don't know, you're selling chicken tacos at the bar or something like that, you know. So it's like full utilization. So when done properly, the menu fits together like a neat little puzzle. But desserts are sometimes hard to fit in.

Making them is one thing, but making them well requires an entirely different skill set from the rest of the kitchen. Plus, you want that amazing 'wow' kind of thing at your restaurant. You have to dedicate space, and not every place has it because of the rent for the square footage.

It's just astronomical these days, and people just can't afford more little physical locations. There are also ingredients to consider: cream cheese, chocolate, nuts, and things like that. You may not be using them in other parts of your menu. Desserts are one of the most expensive things

to make in terms of ingredients. Ingredient costs in the world change, and consumers see inflation as well. It's more than the egg inflation we've all been frustrated with. In 2018, the cost of vanilla skyrocketed due to a crisis in Madagascar.

It's stabilized, but it's never really returned to where it once was. Bad weather in West Africa, where around 70% of the world's cocoa comes from, has led to dramatic increases as well. When all is said and done, desserts are tied with appetizers

as the lowest average profit margins in restaurants and one of the hardest things to fit into that neat little menu puzzle. So when a restaurant is struggling, in-house pastry chefs are often the first to go, especially because restaurants can offer desserts at a much lower cost by outsourcing them entirely.

Thus the same desserts everywhere you go. But there is something about dessert. These places are often missing the marketability of the experience. Okay, but before we get into that, let's take a minute to talk about our sponsor, Bluehost.

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So if you're a content creator, blogger, or entrepreneur, we're just getting started. Check out the link below. Now, from aesthetically pleasing websites back to aesthetically pleasing foods. Recent data suggests there's a shift in how consumers are viewing desserts

when going out to eat. Only 11% of Boomers, on average, ordered dessert, compared to over 30% of Gen Z or Millennial diners at Bad Roman, an Italian restaurant in Manhattan. That number is much higher.

It's close to 40% of our guests ordering desserts. Chef Craig Koketsu and pastry chef Lucy Blanche helped create the restaurant's dessert menu. And part of the reason so many people are ordering from it is because they've tapped

into the importance of marketability. You know, the saying is that people eat with their eyes first, and it's totally true. So you want to capture them first visually. Chef Lucy's viral lemon cheesecake really captured people.

I mean, it's a lemon cheesecake, beautifully molded to be shaped like lemons, served on a lemon plate. It's even fun to eat since you're encouraged to crack the shell before diving in. And of course, it tastes amazing.

It's very important to me that things look wonderful, but more than anything, that they also taste amazing. I remember one of the team members at the table when we brought the dish out saying, "Well, this is a home run."

And he was right. At the end of the day, the only way for a restaurant to really make money is to get people into seats. Viral hits like this can drive customers to a restaurant, and more customers obviously mean more profit as they spend on entrees and drinks.

But to get diners coming back again and again, chefs can't rely on one dish. The entire menu has to work together, and desserts have a unique opportunity. It's the last thing the diner identifies with at the table.

Everything will be memorable, but I feel like the last thing they eat is always what makes the meal. What's going to make your entire dining experience? Dining out has always been about more than just the food.

And so that's how dessert can fit into this menu puzzle: as a final cherry on top of the experience, making you want to come back, send your friends, and spend a little extra at the end.

Why every restaurant has the same desserts

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Limited and uninspired dessert options are common in many restaurants.

There's a reason for this, related to restaurant profit margins.

Restaurant profit margins are low, typically less than 10%.

Profits are impacted by costs like ingredients, staff, rent, and taxes.

Menus must balance pricing to maximize profits without deterring customers.

Entrees and drinks are the most profitable menu items.

Cross-utilization of ingredients (e.g., using a whole chicken for multiple dishes) reduces costs.

Desserts are challenging due to specialized skills, space requirements, and high ingredient costs.

Ingredient costs fluctuate significantly (e.g., vanilla, cocoa).

Desserts have low profit margins, leading to outsourcing and menu standardization.

Consumer dessert ordering habits vary by generation (Gen Z and Millennials order more).

Bad Roman's high dessert sales are attributed to their focus on marketability.

Visually appealing desserts (like Bad Roman's lemon cheesecake) attract customers.

Viral desserts can drive customer traffic and increase overall profits.

A well-executed dessert enhances the overall dining experience.

Dessert can be the final positive impression, encouraging repeat visits and referrals.

Dessert should be seen as a way to improve customer loyalty and increase spending.