Food waste rattles a restaurant’s bottom line as well, with businesses literally throwing away billions of dollars of potential profits in the trash. However, there’s hope that restaurants can take action to reduce their food waste in ways that will have positive effects on the environment, their customers, their employees, and their profit margins. Since food costs usually end up being 28-35 percent of restaurant sales, dealing with food waste can make a substantial difference. Let’s dive into some ways that restaurants can reduce food waste to increase profitability and help tackle this issue.
1. Conduct a Waste Audit
The first step to reduce waste is to find out how much is being wasted, and what kind of waste is being produced. By conducting a waste audit, you can find out how much your restaurant is currently throwing away and what the potential cost savings are. The primary goal of this audit is to identify where your restaurant’s waste comes from, so you can pinpoint ways to reduce it. Be warned, things might get a little messy – this method requires you to roll slap on some gloves and dig through the trash. Here’s how it works – every day for a week, open up the bags and separate the trash into these categories:
- Produce (vegetables, fruit)
- Meat (red meat, poultry, fish)
- Takeout products (plates, containers, cups, etc. )
- Paper products (napkins, flyers, paper towels, receipts, etc. )
- Plastics Other (broken dishware, aluminum foil, glass)
For example, if you find that your produce waste is heavy, it could be an indication that you’re not purchasing the freshest options from your distributors, or that your customers aren’t crazy about your seasonal menu offerings. A waste audit will show you exactly what changes you need to make, and that insight will be powerful for how you manage your operations in the future.
2. Fine-Tune Your MenuYou can create less food waste by offering fewer menu options – and only keeping the most popular dishes. Use an inventory management system to help you figure out what items aren’t selling as well as others so you can make choices on what to pare down. Besides, too many menu options can actually confuse customers.
You can also find ways to use the same ingredients in several dishes across the menu, which will help you save money by purchasing food items in bulk and reduce the DOH (days on hand) ratio of the item. Not to mention, you’ll cut down on food waste since the inventory is less likely to spoil. For example, if you only use eggplant in one appetizer recipe, consider adding it to other menu offerings such as pizza or pasta dishes instead of letting unused stock go bad.
3. Train Your Staff to Waste LessWhen reducing restaurant food waste, the whole staff needs to be on board. Keep employees in the know about ways to reduce food waste, and teach them strategies they can easily implement in their roles.
Educate your prep cooks about cutting techniques that yield the most amount of product and how to keep food items fresher for longer. Double down on the refrigerator labeling process and teach kitchen staff how to store items properly. If there’s a team mentality about reducing food waste and everyone feels involved, there’s a greater chance of success. You can also adopt the first-in / first-out method (FIFO) in your kitchen to reduce the amount of spoilage in your restaurant.
In a FIFO kitchen, inventory will be organized and used in the order they arrive on-site, meaning the oldest food items are used first. For example, if you receive a shipment of carrots on Monday and again on Thursday, the carrots that arrived on Monday will be used in kitchen prep first. This ensures no perfectly good product goes to waste simply because of the order of delivery.
If your restaurant isn’t recycling by now, it’s time to get on board (hello, it’s 2020! ) Divert used glass and cardboard to dedicated recycling bins and encourage employees to be careful about separating recyclable materials from landfill waste. Contact your local waste management company to start a recycling program if you haven’t already. Try figuring out what items in your restaurant can be cleaned and reused.
4. Recycle and Implement Reusable Items
You can swap out paper napkins for cloth ones or commit to using silverware instead of plasticware. Stop offering straws altogether, use paper ones, or even consider pasta straws. You can extend this idea to customers, too. Try encouraging customers placing takeout orders to bring their own containers, and offer a small discount in return.
For the food waste you do end up with, composting is an excellent way to divert food waste from the landfill. Many U. S. cities and counties offer composting programs to prevent food scraps from decomposing in landfills and generating methane. It’s certainly an eco-friendly option for taking care of leftover food scraps on diner’s plates.
5. Start Composting
Support your hard-working local farmers and producers and cut down on time between harvest and delivery. The popularity of “farm to table” has exploded in the past few years as restaurant owners and consumers enjoy getting fresher food from more trustworthy sources. Buying locally reduces the number of phases fresh foods go through, which, in turn, reduces restaurant waste because items stay fresher for longer.
6. Buy Locally
7. Create In-House Preservation StrategiesEven if you adopt a streamlined waste and inventory management plan, some amount of food is still going to end up not getting used. You can accept the items as waste, or get creative and learn how to preserve these items and give them a second life.
Pickling is one of the oldest preservation techniques and can easily turn wilting produce into giardiniera for a sandwich special, or kimchi for a rice bowl. Carrot tops and beet greens that would normally be tossed can be turned into a pesto and frozen for future use in pasta or fish dishes. The key is to always be thinking of ways you can save trimmings and extraneous items from the trash for use in creative dishes.
Inventory days on hand, or DOH, is an accounting ratio that refers to the average number of days you hold inventory before it is sold. You can calculate DOH by dividing the average inventory for a specific period by the corresponding cost of goods sold for that same period, and multiply the result by 365.
8. Calculate and Monitor Inventory Days on Hand
You can apply this calculation to individual food items or to your restaurant’s entire inventory. For example, if you order 170 lbs of ground beef and use 34 lbs of ground beef each day, that item is ‘on hand’ for five days. 170 lbs of ground beef ÷ 34 lbs of ground beef a day = 5 days ‘on hand. ‘
Pay attention to which food items have higher inventory days on hand. That item might not be selling quickly because customers aren’t ordering that particular dish, and a menu adjustment may be necessary. Additionally, food items that have lower inventory days on hand are selling like hotcakes – use this information to modify your vendor orders to only include what you’ll reliably use in between deliveries.
Be sure to frequently revisit these DOH reports to ensure you’re staying current on what’s selling, what’s not, and what costs have changed due to market trends and seasonality.
Restaurant inventory management solutions are your secret weapon when it comes to staying on top of inventory tracking. These platforms help you strategize what items to order to cut down on waste, while helping you control your budget and spending. The right tech solution can provide actionable data into how you’re actually performing financially. You can use them to calculate food cost percentage, reduce over-buying, and figure out your least and most profitable items.
9. Use Inventory Tracking Technology
You’ll receive reports on inventory that goes out, such as menu items and ingredients sold and waste produced. This technology keeps you up to date on daily waste production, so you can create actionable strategies to reduce it.
The journey to waste reduction requires dedication, a team effort, and time. Implementing small changes to reduce food waste each month will amount to a substantial difference by the end of the year. Try setting monthly goals that touch on one or two of these key strategies, and you’ll likely see less waste – and hopefully an increase to your bottom line.
10. Start With Small Changes
Using a tool like a digital checklist is a great way to increase accountability and compliance throughout your operations, especially when it comes to ensuring safe inventory management. Digital checklists transform task management by loading paper logs and checklist items into software accessible through a tablet.
11. Utilize Digital Checklists to Ensure Safe Storage of Inventory
Employees can rely on the tablet to find their tasks and mark them as completed throughout their shift. Managers and operators can customize the tasks and checklist items that appear on the tablet to include inventory intake checkpoints such as proper labeling and storage hierarchy.
Inventory management starts before supplies get to your kitchen staff for preparation. Set stringent inventory storage rules, ensuring that all staff members stick to them.
If food is stored improperly at any stage, you can never be sure of its integrity and safety, which may force staff to throw it (and any ingredients next to it) out and start with fresher ingredients. This type of food waste is easily avoidable.
Anyone receiving or stocking incoming inventory needs to be sure that it is appropriately labeled with the date received and the use-by date. This process should occur anytime inventory is delivered. Your staff should never have to spend time guessing or looking at delivery and order receipts before deciding whether food is safe to use in the kitchen.
Your inventory should be organized so that meat is always stored on lower shelves to avoid cross-contamination. If you store meat products on higher shelves, you run the risk of contaminating the food stored below it. You would need to then discard all of the inventory that was cross-contaminated – another instance of avoidable food loss.
With strict but necessary food safety guidelines in place, your staff knows that food cannot be left out of the proper temperature holding thresholds. These guidelines are second nature to most restaurant workers during prep and cooking. But when it comes to inventory sitting in your cooler or freezer, many operations take a “set-it-and-forget-it” approach.
12. Use Remote Temperature Monitoring Technology
Without the proper technology, accurate temperature monitoring can be impossible to truly monitor and control. Depending on the size of your operation and the types of food on your menu, it’s possible your freezers and coolers could hold upwards of $10,000 worth of inventory on any given day. If anything were to compromise the safety of this stored food, it would cause catastrophic food loss.
Factors out of your control can cause this level of food loss from simple human errors like forgetting to close the freezer door, equipment malfunctions, or unexpected power outages. Total Food Service reports that “… power outages cost US businesses over $70 billion per year. “
Remote temperature monitoring technology can protect against these unexpected issues. With small wireless sensors placed in your temperature-controlled areas, you’re able to receive temperature readings 24/7 and get instant alerts anytime a temperature drops out of range for any reason. This constant access allows you to fix errors before they turn into catastrophic inventory loss.
A less common cause for inventory loss and food waste is unchecked food compensation when customers report a service issue. If a customer has a sub-par experience at your operation, they may request compensation in the form of complementary products. Without appropriate documentation for this process, it’s not unusual to have some customers take advantage and repeatedly report issues to different members of your team to exploit the policy, eventually receiving a significant amount of free food.
13. Use Customer Recovery Technology to Avoid Loss Over Time
Documenting this process enables your staff to identify patterns that indicate a customer may be taking advantage of your operations. When an issue is reported, your employees can easily record it and mark it as resolved. When the same customer comes in reporting the same issue, your team can turn to the documentation to let them know that it has been resolved and closed, disqualifying them from further compensation.
Although this strategy won’t protect against major inventory loss, it’s a simple way to protect your inventory on a smaller scale and over time. Comped food can add up throughout the year and make a meaningful dent in inventory costs.
Guest Contributor: Kristen Speridakos is the Digital Marketing Manager at Squadle, a technology company committed to delivering flexible, user-friendly applications that enable multi-unit operators, convenience stores, and retailers to simplify complex operations and streamline food safety. Squadle’s customers operate tens of thousands of locations worldwide and include the largest and most respected brands in their industries.