What is CMV: a complete guide to optimizing costs in collective meals

Mastering the Cost of Goods Sold (COGS) is fundamental to financial and operational success in the mass catering sector.

That's because it's much more than an accounting metric, COGS has a direct impact on profit margins, It is essential for the sustainability of any operation.

When well managed, COGS allows you to identify waste, plan purchases accurately and adjust financial strategies to optimize resources. On the other hand, neglecting this metric can lead to losses, compromise the quality of meals and hinder sustainable growth.

In this article, you will find everything you need to know about CMVfrom its definition and importance to practical tips for reducing it, such as the use of integrated systems, up-to-date technical data sheets and strategies for controlling waste.

What is CMV? Explaining the metric

COGS is a financial metric that helps managers of mass catering restaurants evaluate the efficiency of their processes and the financial performance of the establishment.

In the context of mass catering, CMV refers to the direct cost of raw materials used to produce the meals served. This includes items such as ingredients purchased, inputs consumed, as well as losses and waste during preparation.

In short, it is crucial to calculate the COGS in order to monitor the operational efficiency and profitability of services such as corporate canteens, schools and hospitals.

Benefits of calculating and optimizing COGS

A manager who has a good grasp of the details of the COGS has a competitive advantage, This makes it possible to identify and correct imbalances that affect business performance.

For example, a high COGS can indicate wasted ingredients, excess leftovers or failures in menu planning and stock control.

On the other hand, too low a CMV can reveal excessive cost cutting, which compromises the quality of ingredients and negatively impacts consumer satisfaction.

Understanding this metric is therefore essential to balancing costs, quality and results. In this scenario, tools such as TecFood, Teknisa's products make the process of monitoring and optimizing CMV more precise and efficient.

In addition, with functionalities that integrate stock control, menu planning and cost analysis, the system helps to identify problems quickly and implement strategic solutions.

Therefore, it makes it possible to achieve ideal balance between the quality of the meals and the profitability of the service.

Since 1990, Teknisa has been a benchmark in management for companies in the food sector. With its extensive experience, it develops innovative solutions and implements projects that reduce expenses and optimize purchases, contributing directly to the efficient management of the Cost of Goods Sold (COGS).

Watch the video and find out more about how to boost your results with our solutions.

The importance of reducing costs and optimizing the cost of goods sold (COGS)

In food services, identifying ways to reduce the costs associated with CMV involves practices such as menu planning, reduction of waste and strategic purchasing of inputs.

In this way, these actions are fundamental to guaranteeing the financial health of a company. industrial kitchen, while preserving the quality of the meals served.

Challenges in looking at expenses and financial planning

One of the biggest challenges faced by catering managers is getting a clear overview of expenses in advance.

Often, this clarity only occurs after the end of the month, when costs have already exceeded the planned limits. This lack of visibility can lead to unpleasant surprises and compromising financial results of the business.

In addition, the lack of integrated planning between the budget and the amounts actually realized exacerbates the problem. This misalignment, especially in purchasing management and expenses, makes it difficult to make strategic decisions.

However, when the direct impact on CMV is not taken into account, the results can include unnecessary expenses that jeopardize the financial sustainability of mass catering services.

Therefore, in order to overcome these challenges, it is essential to adopt proactive solutions that allow for more effective CMV management. Implement an integrated approach that compares the planned budget with the realized values in real time can make all the difference.

With this, managers are able to block expenses preventively and make more informed decisions, ensuring greater financial control and avoiding overspending that directly affects the operation.

Workflow and expense control

The implementation of a structured workflow and an efficient system for approving expenses is essential to make the cost management related to CMV.

In addition, involving managers and directors in the process ensures that the expenses incurred are in line with the financial management, generating positive impacts on the budget.

Therefore, in the management of collective food services, well-defined workflows help identify critical points of waste and improving operational efficiency.

Thus, the combination of organization and control makes it possible to reduce costs and optimize COGS, ensuring financial sustainability and healthy business growth.

Why calculate COGS?

As we've said, in the context of collective meals, the Cost of Goods Sold refers to the total value of the food, ingredients and inputs used to produce the menus.

Therefore, this calculation includes everything from basic items to condiments and complements needed to meet the requirements of each meal served.

Now that we understand how crucial calculating COGS is in the catering sector, let's highlight a few more benefits of this calculation:

• Cost control: The CMV allows you to monitor spending on inputs, identify excesses or inefficiencies in purchases and implement corrective actions for more effective management.
• Profit margin: Knowing the COGS is essential for calculating the gross profit margin and assessing financial performance, guaranteeing the viability of the business.
• Adequate pricing: COGS helps to define fair and competitive prices. Inadequate prices can generate losses or compromise competitiveness.
• Stock management and waste reduction: Monitoring COGS prevents the accumulation of perishable products and financial losses, improving operational efficiency.
• Financial planning: COGS is indispensable for planning medium- and long-term budgets, forecasting future needs and allocating resources strategically.
• Decision-making: Based on COGS and other metrics, managers can make more informed decisions about menus, suppliers and purchasing strategies.

So, as we can see, calculating the COGS is indispensable for the success and sustainability of collective meal services, since it details operating costs, promotes financial efficiency and balances quality and profitability.

Periodic monitoring: the basis for calculating COGS

Calculating the CMV effectively in mass catering services requires an constant monitoring of all operational areas. This includes monitoring incoming and outgoing invoices, as well as detailed control of input consumption and losses during production.

Thus, in the collective meals sector, the COGS reflects the cost of the raw materials actually used to produce the meals, and not just the stock.

This is because this calculation takes into account factors such as waste, leftovers and breakages during preparation. strongly influenced by the technical data sheet of the preparations.

Therefore, by focusing on the actual consumption of ingredients, the CMV offers a more accurate and functional view of operating costs.

Step by step to calculate the COGS:

• Define the period of analysis: Choose a specific time interval to calculate the CMV. This allows you to evaluate the financial and operational performance of the meals served during the period.
• To raise purchases of inputs: Record all purchases made during the period, taking into account food and non-food items used in production. Include detailed information on suppliers and materials purchased.
• Calculate the initial stock: Identify the total value of the stock of inputs available at the start of the period, including food already stored and auxiliary inputs.
• Incorporate losses and waste: Record losses due to handling, leftovers and breakages during the production of meals.
• Calculate the closing stock: Determine the value of the remaining stock at the end of the period analyzed, taking into account the unconsumed inputs.
• Apply the COGS formula: Use the formula adjusted for the sector: COGS = Total Purchases + Opening Stock - Closing Stock - Losses and Waste.

In other words, calculating the CMV in collective meals guarantees a more accurate view of costs and promotes strategic decisions to optimize resources, reduce waste and ensure the financial sustainability of the service.

Specificities of CMV in collective meals

In addition to basic data such as opening stock, purchases made and closing stock, it is essential to consider:

• Losses and waste: Leftovers and breakages during the handling or preparation of meals must be accounted for so that the calculation represents the real consumption of inputs.
• Technical details of the preparations: The use of detailed technical sheets helps to predict the exact cost of each meal, including proper portioning and control of ingredients.
• Menu planning: Well-planned menus with optimized inputs have a direct impact on COGS, reducing costs and improving efficiency.

Practical example:

Imagine that an industrial kitchen has an initial stock of R$ 40,000 and makes purchases of R$ 20,000 during the month.

At the end of the period, the remaining stock is R$ 30 thousand, and the recorded losses total R$ 5 thousand. Applying the formula:

CMV=40.000+20.000−30.000−5.000=25.000

In this case, the Cost of Goods Sold would be R$ 25 thousand, already adjusted to reflect operating losses.

Find out how to optimize COGS

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Is there an ideal CMV for catering services?

This is a common question in the management of industrial kitchens and corporate cafeterias. However, there is no universal answer, as the Cost of Goods Sold The ideal depends on the particularities of each operation, such as the type of meal served, the target audience and the scale of production.

The ideal CMV according to experts

According to SEBRAE, The ideal CMV for food establishments generally varies between 30% and 40% of revenue.

Thus, staying within or below this range is considered positive, while exceeding it can indicate risks to the financial health of the business.

Leandro de Assis, commercial director at Teknisa, shares an enriching perspective on the subject. For him:

“An effective COGS remains in line with the predefined target, with minimal margins of variation. Managers must monitor COGS on a daily basis, and a reliable system is essential to help them do this,” Assis points out.

However, he also stresses the importance of monitoring fluctuations in CMV over time:

“When the CMV varies constantly and the results show significant differences day after day, this can be indicative of problems in management, which require immediate analysis and action,” Assis stresses.

How do you keep COGS within the target?

How Ideal CMV is not a fixed figure, but a value in line with the goals set for the collective meal service, to keep it within the desired parameters, is fundamental:

• Constant monitoring: Monitor COGS regularly to identify possible deviations and act quickly.
• Use of reliable tools: Specialized systems, such as Teknisa's software, help to obtain accurate data, monitor trends and carry out detailed analyses.
• Data-based management: Making decisions based on concrete information ensures that COGS is always aligned with financial and operational objectives.

Thus, keeping the Cost of Goods Sold within a pre-defined target is a challenge that requires attention, planning and the use of appropriate tools.

This is because a stable and well-controlled CMV not only promotes financial sustainability, but also ensures efficiency in operations and the quality of the services provided.

Identifying problems with CMV

CMV is a sensitive indicator that can reveal operational or strategic problems in mass catering services. A very high index can point to:

• High prices for input purchases: Inadequate negotiations or lack of planning can increase costs.
• Excessive waste in the kitchen: Leftovers, breakages or incorrect portioning compromise efficiency and increase costs.
• Misplacement of goods in stock: Failures in inventory control can result in significant financial losses.

On the other hand, a very low index can also be a sign of problems, such as:

• Use of low-quality raw materials: Exaggerated cost-cutting can compromise the quality of the meals served.
• Final product below expectations: Meals that don't meet the customer's needs can have a negative impact on the consumer experience.
• Final price above market: A disproportionately expensive menu can drive away customers and reduce competitiveness.

COGS and profitability in food services

COGS is an essential metric for assessing the profitability of corporate cafeterias, industrial kitchens and other food services.

Thus, subtracting the value of the CMV from the gross turnover of operations, managers can understand the gross profit generated by each meal or service offered.

Attention: Your collective meal service is unique, and your figures reflect the specifics of your operation.

Therefore, when evaluating the COGS, take into account factors such as the profile of the customers, the type of meal offered and the internal processes.

Not sure where to start? Consider the average CMV of the collective meals sector and apply it to the production costs of your preparations. This approach offers a starting point for better understanding and controlling the index.

Tips for improving COGS control

Now that we understand the importance of monitoring the Cost of Goods Sold, here are some proven strategies to reduce and manage this index efficiently in group meal services:

Tip 1 - Plan your purchases

A poorly planned purchase has a direct impact on the COGS result. That's why it's essential to analyze the cost of each item and qualify your suppliers. This practice guarantees the use of quality raw materials, which is essential for the efficiency of the service.

Therefore, during the quotation process, evaluate different brands and prices. Know-how is crucial at this point, as the characteristics of the products can influence performance and the final cost.

Cíntia Rios, Market Director at Teknisa, emphasizes that the lowest price is not always the best choice:

“Certain types of rice, for example, have different yields. Opting for the product that delivers the best result, even if it costs a little more, can be more advantageous.”

However, she also highlights the importance of analyzing specific losses, such as in the case of frozen meats:

“It's essential to assess the amount of water released after defrosting. You may be paying more for ice than for meat. This type of control, known as loss after cleaning, also applies to meat and fruit and vegetables.”

Pay attention to the qualification of suppliers

When choosing suppliers, consider the correction factor for each product. Therefore, avoid those that offer poor quality merchandise, as this can compromise not only the CMV, but also the efficiency and quality of the service.

Planning purchases strategically, qualifying suppliers and understanding the characteristics of the inputs are essential steps to optimize the Cost of Goods Sold.

By applying these tips, managers can reduce costs, avoid waste and guarantee the financial sustainability of their catering services.

Tip 2 - Reduce waste

Waste is a reality in many mass catering services, directly impacting on COGS and profitability.

Therefore, in order to combat it, it is essential to implement control and optimization strategies, such as calculating the leftover food, This helps to identify where the greatest losses occur and enables assertive action to be taken.

Strategies to reduce waste in collective meals:

• Centralized planning: Use seasonal products to save money and maintain quality.
• Tailor-made production: Avoid producing or buying more than you need.
• Constant monitoring: Observe, analyze and measure consumption to identify areas for improvement.
• Management with feedback: Use software to manage orders and carry out satisfaction surveys.
• Adoption of intelligent methodologies: Implementing good practices reduces costs and avoids leftovers.

Tip 3 - Keep technical data sheets up to date

A food factsheet is an indispensable tool in the management of catering services. This is because they contain essential information, such as the ingredients needed, their exact quantities, possible substitutes and how to prepare each meal.

Therefore, keeping technical data sheets up to date allows for more efficient management, assisting with stock control, proper pricing and recipe standardization.

These tools are also useful for aligning the kitchen's work with the business's financial and operational objectives.

Tip 4 - Use technology to your advantage

The adoption of management software is one of the most effective ways of calculating and controlling the Cost of Goods Sold (COGS) in collective meal services.

In this way, these systems integrate all areas of the operation, from recording invoices to checking purchase orders and consumption of inputs.

As such, technology offers several advantages by automating and centralizing operational processes, making the calculation of COGS more accurate and efficient. The main benefits include:

• Complete history: The software uses the detailed history of all stages of the production process, offering a broad and integrated view.
• Customized reports: Reports can be issued according to the needs of the operation, optimizing cost and performance analysis.
• Precise stock control: The system cross-references merchandise information with the technical data sheets of the preparations and the level of sales, guaranteeing detailed monitoring.
• Automatic generation of the shopping list: It takes into account stock levels, average sales and technical data sheets, optimizing the planning of input purchases.
• Automatic calculation of COGS: Based on the data recorded in the system, it eliminates manual errors and provides greater precision.
• Complete sales management: It allows monitoring of all sales made during the period, helping managers to make strategic decisions.

What if you don't have a system?

Although spreadsheets may seem like a practical solution at first, this approach has several limitations in the long term.

This is because spreadsheets are susceptible to human error and require additional time to maintain and may not contain all the information needed to correctly calculate the COGS.

What's more, for managers who run multiple canteens or industrial kitchens, keeping track of everything manually can become a complex and costly challenge.

Thus, the lack of integration can hinder strategic decision-making, This has a negative impact on the efficiency and profitability of the operation.

In turn, technology, through management software, is transforming the way CMV is managed in mass catering services.

With automated data, accurate reports and an integrated view of the operation, managers can make faster and more strategic decisions, promoting greater efficiency and reducing costs.

Real savings with a management system

An integrated system also helps to identify unnecessary expenses and generate significant savings.

That's because, even small price increases (like 5 cents per item) can have a significant impact on COGS, requiring adjustments to billing or pricing.

In this way, management software detects these small deviations that could go unnoticed in manual processes.

And with the complete calculation of financial transactions, it is possible to comparing cost variations with planned turnover and adjusting operational strategies, maintaining the financial balance of the service.

Therefore, integrated management systems are indispensable tools for managing the Cost of Goods Sold in collective meal services.

With advanced functionalities, they offer detailed control, reduce waste and guarantee strategic decisions based on reliable data. Therefore, adopting technology means investing in the efficiency and sustainability of your business.

Nice to meet you, Teknisa!

If you still don't know who you can count on to reduce your Cost of Goods Sold, count on Teknisa! In short, we have been operating in the Food Service market for more than 35 years, offering technological management solutions that promote operational efficiency and reduce costs.

That's because our Cost Reduction Service is based on comparative parameters of competitiveness, analyzing Procedural Failures vs. Control Failures to identify opportunities for savings and optimization.

Why choose Teknisa?

With Teknisa, you not only reduce costs, but also improves the financial and operational performance of your business. In this way, our expertise in the collective meals market and our commitment to customized solutions guarantee results that make a difference.

So, whether to optimize CMV or to integrate processes, Teknisa is the ideal partner to transform the management of your business.

Benefits of partnering with Teknisa

The results obtained with Teknisa reflect the synergy between well-defined processes and the strategic use of specialized management software.

In this way, through the integration of systems and best practices in the industry, the collective meals, It is possible to achieve a more efficient management of resources, promoting a significant reduction in the Cost of Goods Sold (COGS).

In short, the combination of Teknisa Service's expertise, its technological tools and good market practices results in smarter, results-oriented management.

Overcoming the “patchwork quilt” with an integrated system

One of the most common challenges faced by food services is dealing with a fragmented infrastructure made up of different third-party systems.

This scenario, known as a “patchwork quilt”, can make it difficult to analyze data and compromise strategic decisions due to the lack of integration between platforms.

With Teknisa, this reality is transformed. Our integrated systems eliminate the need for external tools, centralizing all operational data in a single location.

In short, from inventory control to sales tracking and the financial management, data consistency is guaranteed, minimizing errors and maximizing efficiency.

Reliable and accurate data: the cornerstone of good management

In addition, having an integrated system from A to Z enables optimized management at all stages of the operation. Centralizing information on a single platform offers benefits such as:

• Data consistency: Eliminates divergences between systems and reduces the risk of human error.
• Agile and accurate data analysis: It enables strategic decisions based on reliable information.
• Optimization of resources: It identifies consumption trends, improves input allocation and increases operational efficiency.
• Improved customer experience: Consolidated data helps to improve the service offered.

This approach makes data the backbone of successful business strategies, empowering managers to overcome challenges and achieve superior results.

Long-term savings with an integrated system

In this way, as well as reducing operational complexity, the elimination of third-party systems generates significant savings in the long term.

An integrated system like Teknisa's reduces costs, improves efficiency and maximizes growth opportunities, resulting in more profitable and sustainable operations.

However, Teknisa's systems not only automate processes, but also boost turnover and optimize costs in collective meal services.

Our technology collaborates directly in the calculation of COGS and offers essential reports for strategic decision-making, ensuring that your operation is always in line with the best market practices.

Simplified CMV management with Teknisa

With Teknisa's systems, managing the Cost of Goods Sold becomes much simpler and more efficient. That's because nur fully integrated solutions automatically record all input purchases, control stock accurately and calculate COGS automatically.

This provides a clear and detailed overview of the direct costs associated with the production of meals in mass catering services.

Performance comparisons for power networks

Teknisa solutions also facilitate the analysis of individual performance in cafeteria networks or industrial kitchens.

This makes it possible to compare results and identify the units with the best performance. Successful practices can then be replicated throughout the network, promoting uniform and sustainable growth.

Conclusion: Transform your management with efficient COGS control

Now that you've understood the importance of Cost of Goods Sold (COGS) and how it directly impacts the financial health and operation of catering services, it's time to put into practice the strategies presented in this article.

Mastering COGS goes far beyond a financial metric; it is a crucial indicator for identifying waste, better planning purchases and adjusting processes that reflect on the quality of meals and customer satisfaction.

Teknisa, with its expertise of over 35 years in the sector, offers the tools and solutions needed to transform the management of your business.

With integrated systems like Tecfood, you can automate processes, centralize data and get a clear and detailed view of operating costs, promoting more efficient and sustainable management.

Be sure to explore the possibilities that technology can bring to your operation. Contact Teknisa and find out how our solutions can help you achieve even better results, balancing costs, quality and profitability.

Are you ready to take CMV management to the next level? Start transforming the future of your business right now!