The impact of food waste
It’s estimated that U.S. restaurants generate between 22 and 33 billion pounds of food waste every year,[1] resulting in an enormous environmental impact, not to mention a big dent in profit margins. What’s more, the restaurant industry throws away $25 billion worth of food every year.[2]
Waste stretches beyond the physical—say, the head of lettuce being thrown in the trash. The resources required to produce that vegetable have been wasted: The energy, water, fertilizer, equipment and labor that took to produce that ingredient, and the same for any packaging required. Add in the space it took up in the crop, and the gas and labor required to transport it first to the vendor, and then to a restaurant. Don’t forget the amount of time staff spent taking inventory and prepping the ingredient. And, once it goes bad, add in the cost for waste removal and all that goes into processing it when it arrives at the dump.
With all that in perspective, tossing that limp iceberg lettuce is really just, well, the tip of the iceberg when it comes to waste. In addition to the wasted resources and food miles, operators end up essentially throwing cash into the trash.
The EPA estimates that food waste is the single largest category in any given landfill.
This translates to a big strain on the environment—believe it or not, food waste is directly responsible for generating a potent greenhouse gas.
In landfills, which are tightly packed, there’s no oxygen to help food matter break down, so the nutrients from the wasted food can’t go back into soil. Instead, surrounded by garbage and plastic waste, the trapped food rots and produces methane gas. With so much food waste in landfills, it’s easy to see why it has become such a major source of methane gas in our atmosphere.
The good news? Much of this waste is avoidable. Investing effort in better waste-reduction practices means a bigger return for your bottom line, as well as the planet.
A recent study confirmed that when restaurants prioritize taking action to prevent food waste, they save an average of seven dollars for every single dollar invested.[3]
Below are five tips to help restaurants reduce waste for healthier profits and a healthier earth.
1. Leverage data to identify waste at the source
It may seem obvious, but the first step in preventing waste is understanding where the waste is coming from.
The right solution will fully integrate a restaurant’s POS system with its inventory management system, so operators can log food waste both on the POS to automatically update quantities on hand, and in the solution itself to complete the tracking for items that get thrown away before they’re even sold. This integration also means operators can easily see what’s being ordered by guests (and what isn’t) and correlate that data with, for example, the profitability of a particular dish. With complete and accurate data flowing through the systems, restaurants will also be able to see ingredients that are being prepped only to be thrown away, inventory that’s expiring before it can get used and what dishes guests are unable to finish.
The key is to have up-to-date, complete and accurate data so trends can be identified and problem areas can be confidently isolated. Operators will gain valuable insight into where changes can be made to maximize their savings and minimize costs and environmental impact.
2. Understand the trends and optimize the menu
Are certain menu items regularly unfinished by guests? This could suggest that portion size is off. Take another look at the recipe and adjust it accordingly. Restaurants can also consider investing in smaller plates, so adjusted portions still look and feel generous.
Is one ingredient consistently expiring before it can be used? Perhaps too much is being ordered all at once. Or, it may be that the ingredient is only used in a certain dish that may not be as popular on the menu.
Again, the right technology will help here. The right recipe and menu engineering tool will help identify these and other trends, so operators can optimize the menu and tweak or remove dishes that are unpopular or unprofitable, or those that use niche ingredients.
3. Track vendor performance to limit waste from inaccurate deliveries
Many restaurants end up paying for things they didn’t order or paying for items that were accidentally left out of the delivery. This results in scrambling to purchase what was needed or ending up with ingredients that aren’t needed—a recipe for wasted time and wasted food. It all comes down to a simple but frequent error when tracking deliveries.
The key here is to automate the invoice and delivery process: a three-way invoice match (with the original order, the goods-received note and the invoice itself) will ensure that the order is indeed accurate, and that restaurants are only paying for what’s actually been delivered. Discrepancies are caught immediately. And, with a tool that allows invoices to be managed by exception and on-the-go, restaurant staff will be able to figure out what’s missing while there’s still a chance to make it right.
Tracking a vendor's performance is critical when it comes to protecting the bottom line and reducing waste. Seeing how each vendor performs in terms of on-time deliveries, product quality, order accuracy and correct invoicing can help restaurants focus on the vendors who deliver the right inventory at the right time at the right price, so kitchens always have what they need. That all adds up to less wasted time and product, while ensuring that guest favorites are always available.
4. Better manage the inventory
Managing inventory is really the heart of the matter: if restaurants always have what they need, when they need it, they won’t end up with much waste. Over-buying and under-buying are the biggest culprits when it comes to wasted resources in the kitchen and wasted cash with last-minute rogue or ad-hoc purchases.
With the right analytics tool, operators can also forecast demand more accurately. Algorithms that take into account historical data, upcoming holidays, trends, weather and events will be able to predict what menu items will be ordered, so restaurants can always be prepared. This not only helps reduce wasted food, but also eliminates wasted prep, helps plan labor more accurately, and ensures that guest favorites are available, further increasing profitability.
Restaurants should also think twice about bulk ordering perishable items. They may seem tempting, but they can lead to losing more if operators have to throw away unused ingredients. The right data will help identify what will be used , so only what’s needed will be bought.
To reduce unnecessary costs, keep up with current events affecting agriculture (for example, wild fires or droughts) that may impact the supply chain and drive up costs on things like fresh produce. Being able to easily adjust the menu and recipes to mitigate pricing fluctuations can have a positive impact on the bottom line.
Finally, make sure expiration dates are properly tracked. Knowing what’s on hand and clearly labeling it, as well as tracking what to use first means restaurants are maximizing the availability of each product for chefs and minimizing the amount that has to get thrown away.
5. Get creative
Some waste is inevitable. But with the right insights, restaurants can plan around it and find creative solutions to help minimize it.
On the ingredient level, waste should be taken into consideration so that for every recipe, restaurants can account for planned waste and ingredient shrinkage. That way, the volume that is needed will be available, instead of having to scramble and purchase something at the last second.
For food or ingredients that have been prepped but can’t be repurposed or used, there may be opportunities in the community to donate leftovers.
But what about the rest, the bits and pieces that result from prep?
Can bones and peels be made into a rich stock? Can scraps be reimaged into new, innovative dishes that can turn a profit? Consumers are gravitating towards environmentally-conscious eateries, and savvy restaurant owners are seizing the opportunity to rethink kitchen waste.
Finally, what can’t be used or repurposed on the menu should then be composted, where it can break down properly, return nutrients to the soil, and stay out of the landfills.
Conclusion
Reducing food waste may feel like a daunting task, but the right technology can help restaurants tackle it. And, a fully-integrated system will help cut paper waste, too.
To learn how restaurants can increase profit while decreasing waste, download—don’t print!—our complimentary white paper. If you’d like to talk about how Fourth’s technology can help the planet and your bottom line, give us a call at 203-838-3700.
[1] https://www.nrdc.org/sites/default/files/wasted-2017-report.pdf
[3] https://www.refed.com/downloads/Restaurant_Guide_Web.pdf
This post is sponsored by Fourth