Food Inventory Management: Systems, Apps, and Solutions

Food inventory management is very important for all types of food service businesses. Retailers and other companies that also stock food items need to have efficient inventory management for all food products due to their limited shelf life and specific storage needs. Thanks to modern restaurant technology trends, advancements in artificial intelligence (AI), and easy access to resources, food inventory management is easier than ever before. In this post, we’ll share more about food inventory management apps and solutions for the restaurant industry and other niche markets.

Key takeaway: Food inventory management is a process similar to inventory management in other sectors. The main difference is that food is a perishable product, and certain specialized software solutions have more features related to that.

What Is Food Inventory Management

The term food inventory management is used to describe the process of controlling the quantity and quality of food items. From small food trucks to large grocery stores, it’s done by businesses that stock different types of food products. Food inventory management aims to find the right balance between having enough food inventory to answer customer demand without overstocking perishable items. Thanks to modern food inventory management systems and apps, business owners in the food service sector can minimize food waste and order to distributors efficiently.

Why Food Inventory Management Is Important

There are multiple reasons why businesses that stock food products need to manage them efficiently. Here are just a few of them:

1. Reducing waste, spoilage, and losses;
2. Improving the eco-friendliness of the business (read more about sustainable restaurant trends);
3. Helps with compliance in terms of health regulations and food safety;
4. Ensures consistency in terms of quality and portion sizes;
5. Improves profit margins by reducing waste and costs;
6. The data can be tracked and analyzed to improve other business operations.

What Are Food Inventory Management Systems

These are different types of software that have a variety of features related to inventory management. They are very similar to standard inventory management software. The main difference is that they have additional solutions to make them suitable for the food and beverage industry and the food service sector. In recent years, SaaS platforms have been the most popular solution to manage food inventory. BlueCart, Toast, MarketMan, and ChefMod are among the popular food inventory management systems. Some of them are more suitable for small food service businesses, while others have a variety of additional features and are well-suited for large restaurant chains.

Features of Food Inventory Management Apps

There are multiple software solutions that specialize in food inventory management. Although they have different functionalities, there are some major features. Let’s examine some of them.

1. Real-time inventory tracking of stock levels, items received, used, or sold.
2. Automated (or manual) ordering based on different par levels and low stock alerts to help avoid over-ordering or stockouts.
3. Expiry date and spoilage tracker that helps reduce food waste and additional costs related to that.
4. Menu integration that allows restaurants to deduct ingredients in real time based on sales. This feature also helps combat inventory shrinkage and increases the chance of restaurant success. Read more about restaurant inventory management.
5. Food inventory management software either has features or can be integrated with other solutions for vendor management. This simplifies reordering by creating order history data. 
6. Food inventory management systems have various reporting and analytics capabilities. From common reports related to tracking margins, cost of goods sold, and food costs to customizable reports based on the company’s needs. This is especially useful for large organizations and chains.
7. Cloud and mobile access features allow managers and decision makers to track and manage inventory remotely. Multi-location access is also an important feature.
8. In addition to food, various other product categories can be tracked and managed through such software. Examples include restaurant merchandise, wholesale restaurant supplies, seasonal inventory (like summer garden tables and chairs), unused equipment, beverages, and more.

What Businesses Use Food Inventory Management Systems

Various companies need this type of software. Very small businesses usually benefit from free or affordable solutions that have limited functionalities. On the other hand, large chains, businesses with multiple sales channels, and companies with complex business operations usually use the best solutions on the market. Here are the different types of businesses that use food inventory management software or a general inventory management system.

1. Coffee shops;
2. Bakeries;
3. Ghost kitchens;
4. Grocery stores, convenience stores, and other retail stores that sell food;
5. Hotels, resorts, and hospitality groups;
6. Restaurants of any size;
7. Commissary kitchens;
8. Catering businesses.

Frequently Asked Questions about Food Inventory Management

BlueCart is an all-in-one solution for B2B sales, food inventory management, and other business processes. In addition to that, businesses can find multiple resources on our website. From information about building an eco-friendly restaurant to tips and tricks about restaurant marketing and restaurant customer acquisition. Below are the answers to a few of the commonly asked questions regarding food inventory management.

What Is Food Inventory Ratio?

The food inventory ratio calculates the number of times the entire inventory is sold over a set period of time (typically a month). For example, an average food inventory ratio of 5 means that, on average, food products need to be restocked 5 times a month. Understandably, different items have different inventory ratios. For example, meat and seafood should be fresh. That’s why restaurant businesses and other companies that deal with food inventory should stock them in smaller quantities and have a high inventory ratio for these goods. On the other hand, most types of grains have a long shelf life, and it’s perfectly normal to have a low inventory ratio.

What Is Average Food Inventory?

Average food inventory is a metric that shows the average value of food inventory at the beginning and the end of a set period. A more accurate way to calculate it is by tracking inventory value daily, summing the numbers, and dividing by the number of days. Calculating average food inventory by categories or products can help you see trends and shift your focus toward specific items. Furthermore, it can showcase the need to invest in additional warehousing and storage capabilities. Nevertheless, there are other more important metrics to track and use in order to improve the inventory management of your business.

How to Calculate the Cost of Goods Sold for Food Inventory?

In order to calculate the cost of goods sold (COGS), you need to have the beginning inventory, the received inventory, and the ending inventory. The formula for calculating COGS is:

Beginning inventory + received Inventory − Ending Inventory = COGS

Tracking the cost of goods sold for food inventory can help a business have efficient price management and react on time in case of increased prices (read more about restaurant inflation).

BlueCart: From Tracking Food Inventory to Automated Wholesale Ordering

Thanks to our software, restaurants and other businesses can do efficient food inventory management. BlueCart has multiple features that help companies track and analyze inventory, cost of goods sold, profit margins, and other important metrics. Furthermore, wholesale distribution businesses can use BlueCart to find new customers, automate order management, and create eCommerce product catalogs. Whether you want to find vendors or wish to increase the wholesale sales of your specialized or broadline distribution company, BlueCart is the right choice!