How fighting food waste is profitable for restaurants

A new report has shown that keeping food out of the bin is a good investment for those with single or multiple sites.

14 February 2019
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image credit: Getty Images

For those who dismiss the fight against waste with the phrase ‘show me the money,’ new research has done just that, demonstrating there is a compelling business case for restaurants to reduce the amount of food they throw away.

For every £1 restaurants invested in programs to reduce kitchen food waste, on average they saved £7 in operating costs, according to a report from Champions 12.3, a group of political, business, NGO and farming leaders.

In a first-of-its-kind analysis, the research looked at data from 114 restaurant sites across 12 countries and found nearly every site realised a positive return on its investment to reduce food waste.The restaurants who participated in the study ranged in size from small restaurants with annual food sales of $400,000, all the way up to multi-million-dollar restaurants with sales of $17.3m.

Within just one year, the restaurants had reduced food waste from their kitchens by 26% on average, and over 75% had recouped their investment. After two years, 89% got their money back. In addition, by reducing food waste, the average site saved more than 2 cents on every dollar on the cost of goods sold.

The types of investments made included measuring and monitoring the amount of food wasted, training staff on new food handling and storage procedures, and redesigning menus. Every site was able to keep their total investment below $20,000.

The monetary gains were made from buying less food and reducing purchase costs, increasing revenue from new menu items developed from leftovers or foods previously considered scraps, and lower waste management costs.

“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,” said Dave Lewis, CEO of Tesco and chair of Champions 12.3. “These findings make it crystal clear that reducing food waste isn’t just the right thing to do, it’s also the smart business move.”

Almost 1m meals wasted a day

As part of the report, Ikea reported the results of its own food waste programme across 420 stores in 52 countries, which saw the equivalent of 3m meals saved over two years. Ikea serves 680m people each year and has prevented more than 1.4m kilos of food from being wasted since 2016. To do this, it used Winnow, an electronic smart scale developed for commercial kitchens and restaurants that weighs waste as it is thrown away. It also plans to work with suppliers on the issue.

“These figures confirm what we have seen at Ikea: reducing food waste goes hand in hand with reducing costs,” said Michael La Cour, managing director at IKEA Food Services AB.

“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.”

Companies closer to the fork tended to have higher returns, with restaurants seeing the best returns from waste-reduction initiatives.

Globally, the figures surrounding food waste are stark. One third of all food produced in the world is wasted each year, amounting to a loss of $940b (£770bn). Additionally, food waste is responsible for an estimated 8% of annual greenhouse gas emissions –if it were a country, it would be the third-largest emitter after China and the US.

In the UK, the World Resources Institute estimates almost 900,000 edible, freshly prepared meals end up in the bin every day because they haven’t been sold in time by restaurants and cafes.

“Chefs and kitchen managers put a lot of care into the food they serve. If they give just as much attention to ensuring none of it goes needlessly to waste, they also can put money in their pockets,” said Liz Goodwin, senior fellow and director of Food Loss and Waste at World Resources Institute.

 

What can restaurants do?

  • Measure the amount of food being wasted to know where to prioritise efforts
  • Engage staff
  • Re-think inventory and purchasing practices
  • Reduce overproduction
  • Re-purpose excess food

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