The Impact of Food Waste
US Restaurants generate between 22 and 33 billion pounds of food waste every year. This results in an enormous environmental impact, and a big dent to profit margins. All that waste adds up. In fact, the restaurant industry throws away $25 billion worth of food every year.
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. That means 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, you can see why it’s such a major source of methane gas in our atmosphere.
Let’s Look at an Example
Waste stretches beyond the physical item you’re throwing in the trash. For example, let’s look at the journey of a head of lettuce.
First, all the resources required to produce it are wasted. Consider the energy, water, fertilizer, equipment and labor that takes to produce each ingredient, and the same for any packaging required. Next, add in the space it took up in the crop. Also, think about the gas and labor required to transport it first to your vendor, then to your restaurant. Don’t forget the amount of time your staff spent taking inventory and prepping the ingredient!
Once it goes bad, factor in the cost for waste removal, and all that goes into processing it when it arrives at the dump. As you can see, tossing that limp iceberg lettuce is really just, well, the tip of the Waste Iceberg. In addition to the wasted resources and food miles, you’re basically throwing cash into the trash.
What Can You Do?
The good news? Much of this waste is avoidable. Investing effort in better waste-reduction practices means a bigger return for your bottom line and for the planet. A recent study confirms that when restaurants prioritize taking action to prevent food waste, they save an average of $7-8 for every single $1 invested.
Here are five tips to help your restaurant 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 should fully integrate your POS with your inventory management system. That will allow you to log food waste both on the POS (automatically updating quantities on hand) and in the solution itself (completing the tracking for items that are thrown away before they’re even sold). This integration also lets you see which dishes guests are ordering (and which they aren’t). Then, you can correlate that data with, say, the profitability of a particular dish.
With complete and accurate data flowing through the systems, you’ll gain great insights, so you can make more informed decisions.
The key is having up-to-date, complete and accurate data to identify trends and isolate the problem areas with confidence. You’ll gain valuable insight into where you can make changes. With this information, you can maximize your savings, and minimize your costs and environmental impact.
2. Understand the Trends and Optimize Your Menu
Are there certain menu items your guests don’t usually finish? This could suggest your portion size is off. Take another look at the recipe and adjust it accordingly. You can also consider investing in smaller plates, so the smaller portions still look and feel generous.
Similarly, do you find one ingredient is consistently expiring before it’s used? Perhaps too much is ordered all at once. Or, maybe that the ingredient is only used in an unpopular menu item.
Again, technology can help here. The right recipe and menu engineering tool helps you identify these trends (and others), so you can optimize your menu. Plus, you can 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, they pay for something that wasn’t delivered at all. This results in scrambling to purchase what was needed, or ending up with a surplus of ingredients without a purpose. What 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 automating the invoice and delivery process. A 3-way invoice match (with the original order, the goods-received note, and the invoice itself) ensures that your team gets everything they requested, and that you’re only paying for what was actually delivered. Discrepancies are caught immediately. And, with a tool that allows you to manage these invoices by exception and on the go, your team can figure out what’s missing while there’s still a chance to make it right.
Tracking your vendors’ performance is critical when it comes to protecting your bottom line and reducing waste. The right tool shows you how each vendor performs in terms of on-time deliveries, product quality, order accuracy and correct invoicing. That way, your restaurant focuses on the vendors who deliver the right inventory at the right time at the right price. You’ll always have what you need. That all adds up to less wasted time and product, while ensuring that guest favorites are always available.
4. Better Manage Your Inventory
Managing your inventory is really the heart of the matter. If you always have what you need, when you need it, you 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, you can also forecast demand more accurately. Algorithms that factor in historical data, upcoming holidays, trends, weather, and events can predict what menu items guests will order, so you can make sure you’re 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. All of these things add up to increased profitability.
You should also think twice about bulk ordering perishable items. They may seem tempting, but you could end up losing more if you are throwing away unused ingredients. The right data will help you identify what you’ll use, so you can buy the quantities you need, while identifying the right opportunities for buying in bulk.
To reduce unnecessary costs, keep up with current events affecting agriculture (like wild fires or droughts) that may impact your supply chain, and drive up costs on things like fresh produce. Adjusting your menu and recipes to mitigate pricing fluctuations will positively impact your bottom line.
And finally, make sure you properly track product expiration dates. This means knowing (and clearly labeling) what you have, and tracking what to use up first. That way, you maximize the availability of each product for your chefs, and minimize the amount that gets thrown away.
5. Get Creative
Some waste is inevitable. But with the right insights, you can plan around it, and find creative solutions to help minimize it.
On the ingredient level, you should take wastage into consideration. If you account for planned waste and ingredient shrinkage in every recipe, you’ll have the volume that you need on hand. That way, you eliminate late-minute scrambles and ad-hoc purchases.
For ingredients that were prepped but can’t be used, look for opportunities in your community to donate leftovers.
But what about the rest, the bits and pieces that result from prep?
Can bones and peels end up in a rich stock? Can you reimagine scraps 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 your menu should get composted. Composting lets food break down properly, and return nutrients to the soil. Best of all, it keeps it out of landfills.
Reducing food waste may feel like a daunting task. Luckily, the right technology can help you tackle it. Plus, a fully-integrated system helps you cut paper waste, too.
To learn how your restaurant can increase profit while decreasing waste, download — don’t print! — our complimentary white paper.
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