That’s a 600% return on investment. What’s not to like?
It stands to reason that reducing food waste would save restaurants money. Still, the actual Return On Investment on food waste reduction comes as quite a shock to me. According to a coalition of businesses, policy makers and campaigners, restaurants that invest in food waste reduction are, over a three year timeframe, seeing $7 in savings for every $1 spent. (I guess Danish restaurants must be raking in the profits.)
Whichever way you look at it, these numbers make cutting food waste a pretty compelling return on investment (600% ROI to be precise) – so much so that a full 76% of businesses participating in the study recouped their investment in the first year alone, with the figure rising to 89% in year two. What’s even more impressive, from my perspective, is that many of the practices and policies implemented ought to cost very little moving forward, so once the initial investment is made, it’s a gift that keeps on giving almost in perpetuity – as long as teams can remain disciplined and consistent in waste reduction practices.
Specifically, the report suggests restaurants and cafeterias focus on the following strategies to cut down on excess waste:1) Measure where food is being wasted and how.
2) Engage staff, and motivate them to take the problem seriously.
3) Reduce overproduction, particularly by avoiding waste-heavy techniques or serving styles like batch cooking, casserole trays, and buffets in favor of cook-to-order preparation.
4) Rethink inventory and purchasing practices to avoid over buying.
5) Repurpose excess food, including formulating a safe Plan B for ingredients if a specific dish doesn’t sell as well as expected.
I was a little surprised not to see portion control explicitly included on the list, particularly because I regularly find restaurant portions overly large and end up bringing some home. But I assume that’s included under the “Reduce overproduction” banner.
Either way, this is a powerful reminder that doing the right thing is often good for business too. And as I noted in my post about Ikea saving $1 million by cutting food waste, this is a crucially important topic. So much so, that Paul Hawken’s Drawdown project actually identifies food waste reduction as the #3 priority for tackling climate change, in terms of potential emissions savings.
THE BUSINESS CASE FOR REDUCING FOOD LOSS AND WASTE: RESTAURANTS
Food waste has tremendous economic, social, and environmental consequences, but it is preventable. First-of-its-kind research on behalf of Champions 12.3 finds a robust business case for restaurants to reduce this inefficiency.
Download the full report here »
View the report’s media release here »
A review of 114 restaurants across 12 countries found that nearly every site achieved a positive return, with the average restaurant saving $7 for every $1 invested in reducing kitchen food waste.
The report also found:
- Within just one year, the restaurants had reduced food waste from their kitchens by 26 percent on average, and over 75 percent had recouped their investment. Within two years, 89 percent had recouped their investment.
- Every site was able to keep their total investment below $20,000.
Data come from restaurants ranging in size, from small restaurants with annual food sales of $400,000, all the way up to multi-million-dollar restaurants with annual food sales of $17.3 million. The report details the kinds of investments they made, and the ways in which they benefited financially.
“These figures confirm what we have seen at IKEA: reducing food waste goes hand in hand with reducing costs. We view fighting food waste not only as an opportunity to create a better world, but also a great business opportunity.
We’ve been able to significantly reduce food waste in our restaurants by setting short-term, actionable goals. It’s a strategy everyone can do, and if more food businesses take on the challenge, they can see similar results.”
Champion Michael La Cour, Managing Director at IKEA Food Services AB
Five Actions Stand Out for Achieving Successful Reduction Programs
- Measure. Generating a “food waste inventory” enabled sites to identify how much and where food was wasted, so managers could prioritize hotspots and monitor progress over time.
- Engage staff. Kitchen and service staff often want to help prevent food waste, but need more definition and guidance from leadership.
- Reduce overproduction. Certain production techniques contribute to a culture of overproduction. For example, batch cooking, casserole trays, and buffets tend to overproduce food relative to cook-to-order preparation.
- Rethink inventory and purchasing practices. Restaurants that want to prevent food waste need to critically examine their current inventory management and purchasing practices.
- Repurpose excess food. Because forecasting customer demand is not a perfect science, restaurant kitchens will find themselves with extra ingredients and potential wasted food. In these cases, having a Plan B for how to safely repurpose these ingredients can allow the kitchen to generate revenue from this potential waste.
Call to Action
“The only way we can halve food waste by 2030 is if restaurants and other businesses along the supply chain step up their action. Every part of the food industry has a responsibility to reduce food waste.”
Dave Lewis, Group Chief Executive of Tesco and Chair of Champions 12.3
Champions 12.3 encourages restaurant owners, managers and chefs to “target, measure, and act” to realize the business case for themselves.
- Target. Targets set ambition, and ambition motivates action. Restaurants should adopt a voluntary reduction target of 50 percent by 2030, which is aligned with Target 12.3 of the Sustainable Development Goals.
- Measure. What gets measured gets managed. Restaurants should start to measure their food loss and waste, and monitor progress toward achieving the target over time. The Food Loss and Waste Accounting and Reporting Standard (flwprotocol.org) can help entities proceed with measurement.
- Act. Action is what ultimately matters. Restaurants—working alone and together—should take measures to reduce food waste. A key success factor for action is management engagement.
The Business Case for Reducing Food Loss and Waste: Restaurants was made possible by support from Walmart Foundation and Ministry of Agriculture, Nature, and Food Quality of the Kingdom of the Netherlands.