Multiple loops to make a menu

Hi! I’m in the process of making a site for a new restaurant coming to town. What I’ve done is created a custom post type for the restaurant’s menu items and a custom hierarchal taxonomy to categorize the items.

My goal is to be able to show the entire tree of the taxonomy (which may be several layers deep) and in the last branch to display the individual items. I think I need to use multiple loops for this, but I’m not sure how to proceed, especially with the multi-layer taxonomy.

Here is a preview of what I’m looking to accomplish:
Cafe (custom taxonomy)
-Drinks (taxonomy child)
=Coffee (taxonomy grandchild)
*Black (custom post type item)
*Decafe
=Soda
-Salads
*Chicken Salad
*Caesar
-…
Dining Room
-Appetizers
*…
*…
-Entrees
*…