Ovation Brands Chief Financial Officer Discusses Cutting Costs, Not Quality, in the Latest Installment of ChiefChats.com

Keith Kravcik talks about how his team has saved the brand millions through the philosophy, “Pennies matter.”

Q. How have you realized savings without sacrificing product quality?

 A. We look at our food and labor costs together because the way we procure our food, for instance, could have an effect on the labor needed to prepare it. Every penny matters. For example, we bought slicers for our restaurants to portion our steaks themselves rather than buying them pre-cut. That’s a $2.5 million save without changing the final product to the consumer. It’s actually a better quality now, according to our customer focus groups.

We also have consolidated our distributors. We’ve gone to a national produce program versus regional programs, which has enhanced and allowed for a more consistent quality product. Between those two initiatives, we’ve saved four to five million dollars.

Ovation Brands Chief Financial Officer Discusses Cutting Costs, Not Quality, in the Latest Installment of ChiefChats.com
Keith Kravcik

Q. How is your organization working towards revenue creation?

A. We’re building long-term, sustainable profitable revenue growth through higher guest counts. Family Nights on Thursdays, where kids can eat for 99 cents, are a huge way for us to reach families with kids and earn a higher check average. With our new IT systems currently being rolled out, our loyalty program that is being developed will identify when a loyal customer comes in so our general managers can personally meet with the customer.  We are also exploring IT handheld devices to help us line-bust by taking payment before people reach our cashier station and eliminate their waiting time so more time can be spent enjoying our hospitable service and made-from-scratch food.

Q. What challenges and opportunities has a “Made for You” business model presented to your team?

A. Labor is a huge part of the cost of running a restaurant. We track our hours by labor station for our operations teams. We even give them data on how many overtime dollars they’ve had to pay, so they become more aware, hence, efficient.

With the “Made for You” platform, we ensure the batch production and smaller batches in the kitchen are cost-neutral and that the restaurants have the right layouts operationally. Lastly, we’re rolling out a new POS and labor module that is going to have a food production module with it, which will allow restaurant management to know how many hours are going to be needed to actually prepare the food and to then plan and adjust accordingly on a real-time basis based on actual customer volume being experienced.

Q. What recommendations would you offer other finance professionals to help them become better business partners with the operations side?

A. You want to transition from finance focusing on the historical data and begin to get the bean counters to become a real value-added business partner. You have to get out there and work shoulder-to-shoulder to get in the restaurants with operations; educate them and they’ll educate you. We provide them with the ‘rules of thumb.’ For example, if we could just bring in ten customers more per day per store, that’s 1.5% growth in our top line sales, which is huge. If ten incremental guests per day buy a beverage in every store, which is one per hour of every hour we’re open per store, that’s $2.8 million.

So, getting operations to understand financials on a per-store basis helps move the needle just a little bit. Pennies matter, and before you know it, it adds up to big money.

To see the video in its entirety, please visit: http://chiefchats.com/chief-chats-keith-kravcik-better-partners/.

In the Fall of 2013, Buffets, Inc., one of the nation’s largest restaurant companies, marked its 30th anniversary.  New executive leadership spearheaded a reinvention of its structure and culture and subsequently renamed the corporation Ovation Brands.

Ovation Brands currently operates 341 restaurants in 35 states, comprised of 332 steak-buffet restaurants and nine Tahoe Joe’s Famous Steakhouse restaurants.  The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet and Ryan’s brands. Ovation employs approximately 18,000 team members and serves approximately 100 million customers annually.  Corporate headquarters are based in Greer, SC with a Corporate Support Center located in Eagan, MN. For more information, visit www.OvationBrands.com.