First off, your house sounds DELICIOUS. ;-)
Second....yes, food is DEFINITELY the heftiest part of our budget, too! We have two adults, and two kids (4 and 1). Since our kids are probably younger than yours, that explains why our weekly grocery budget is about 1/3 of yours.
However, there are some ways you could probably slash your budget a bit more. How handy are you in the kitchen? I have been making my own bread for a year now, and it's really not difficult. Best of all? I get french bread that EVERYONE loves, for just about $1 a loaf. Granola is also a really inexpensive thing to make yourself, as are yogurt and soy milk.
For menu ideas, take some tips from outside our borders. A dinner that includes rice and beans doesn't need another protein source. And rice and beans can take a HUGE chip out of your monthly food bill. There are lots of ways to prepare them - sweet baked beans, curried lentils, or chili are all really easy to prepare. We also eat a lot of Chinese food around here. Several vegetables are prepared, and served family style, along with a small piece of meat or some tofu. (If served this way, 1/2 pound of meat can easily serve my family, with enough left over for my husband to pack lunch the next day.) Serve everybody a small bowl of rice, put all the veg, etc. in the middle of the table, and go to it! Serve yourself a few bites of this, and a few bites of that, eat it up, and repeat. It's a fun way to eat, since you're deciding every few minutes what to eat next!
I haven't included any recipes here, to keep this from being a novel, but please msg me if you would like recipes for any of those things! (Most of them are on my food blog, here: www.chowreview.blogspot.com)
Good luck, and happy eating!