Management & Operations

Do You Know The True Cost Of Food Waste? A Practical Guide For Restaurants To Recover Profits and Improve Ecology

Do You Know The True Cost Of Food Waste? A Practical Guide For Restaurants To Recover Profits and Improve Ecology

Behind the kitchen doors of restaurants nationwide, roughly a quarter of the food prepped and portioned gets tossed in the trash. For a typical 200 seat establishment, that can translate to $200,000 or more in ingredients wasted annually. Food waste presents both an economic and sustainability challenge to the foodservice industry.

By rethinking our procurement practices, leveraging technology, and innovating recycling processes, restaurants can turn “waste” into cost-cutting and even revenue-generating assets, what was once a costly disposal burden can be used to build goodwill among diners, improve sustainability, and help you stay ahead of the regulatory curve.

The Prevention Imperative: Optimizing Operations

Tackling food waste starts by preventing it at the source through smart operational practices and staff engagement. Even incremental improvements in areas like inventory management and precise prepping can yield substantial dividends quickly.

Engaging Staff for Buy-In

Getting teams on board with low-waste habits is job one. Employees play a crucial role in everything from properly portioning to minimizing overproduction. Resetting entrenched practices requires:

  • Sharing data with your staff that illustrates the scale of waste and its costs
  • Setting measurable reduction goals with incentives like recognition and bonuses
  • Empowering staff to identify and solve inefficient processes that lead to waste

Systematic Low-Waste Procedures

With team members now bought into the “why,” food waste’s negative effects, it’s time to systematize the “how” through standardized procedures.

  • Precise Forecasting: Leverage historical sales data, seasonal patterns, and events to accurately predict demand and prep accordingly. POS inventory and sales reporting software will allow you to enhance forecasting precision.

  • Strict Inventory Management: Implement optimal par levels, product rotation, just-in-time ordering, and demand-driven purchasing to minimize overstocking and spoilage. Advanced POS systems like Rezku POS can push notifications to management when part levels drop and reordering is required.

  • Prepping Precisely: Portion ingredients using standardized recipes and tools. Prep only what’s required per forecast to avoid overproduction. Optimize cutting technique to reduce waste and ensure staff know the restaurant’s prep standards to avoid rejection due to improper cuts.

  • Smart Menu Design: Offer smaller portions, allow substitutions and menu flexibility when ingredients run out, and utilize specials/batch prepping of items to creatively use up surplus inventory.

Tech-Driven Tracking and Automation

Digital production management systems automate many of these practices - from precise demand forecasting to automated purchase ordering and performance tracking. Food waste analytics programs monitor what gets tossed to continuously refine processes.

With optimized lean procedures and technology handling inventory control, restaurants can slash food purchasing costs by over 25% just by eliminating systemic overbuying and overshooting prep quantities.

Recycling “Waste” Into Profit Centers

Despite operational best efforts, some degree of surplus or unusable food waste is inevitable given the nature of foodservice. Rather than resigning it all to the dumpster, creative recycling approaches allow restaurants to find value in waste streams.

Donation Programs for Edible Surplus

Apps like Copia make it easy to coordinate pickup and delivery of still-consumable prepared foods to nearby shelters, food banks, and nutrition programs. Not only does this provide meals to those in need, but it qualifies restaurants for tax deductions and enhances community goodwill.

Recycling Inedible Organics

For spent ingredients, trimmings, and other inedible waste, options like:

  • Partnering with farms or zoos to take vegetable scraps and bread trimmings for animal feed
  • Contracting composting collectors to convert organic waste into nutrient-rich soil products while avoiding landfill fees
  • Hauling waste to innovative anaerobic biodigester facilities that use microbes to transform it into biogas energy and liquid fertilizers

On-Site Processing Solutions

Depending on budget and ambition, some restaurants have invested in self-contained solutions like:

  • Industrial In-Vessel Composters: Units that accelerate the controlled decomposition of organic waste into high-quality compost/soil products.

  • Anaerobic Biodigesters: Systems that capture biogas released from microorganisms breaking down organic waste, which can generate electricity while also producing liquid fertilizer byproducts.

These on-site installations allow operations to convert waste streams into revenue-generating outputs. Costs can be partly offset by avoiding landfill-bound waste hauling expenses.

The Financial Upside of Reducing Waste

Beyond eliminating costs for purchasing, prepping and hauling away wasted food, pursuing robust food waste reduction presents additional financial opportunities.

Tax Incentives and Avoided Disposal Fees The federal government and many municipalities offer incentives like:

  • Tax deductions for donating surplus edible food to qualified non-profits
  • Local disposal bans with fees/fines for landfilling organics
  • LEED credits or rebates for recycling food waste

New Revenue Potential

Those who take waste recycling a step further and invest in processing solutions like biodigesters or composters can tap into:

  • Tipping fees for accepting other entities’ food waste as feedstock
  • Sales revenue from compost, soil, fertilizer and even biogas outputs

Cost-Benefit Analyses

While biodigesters and industrial composters require upfront investment, potential payback periods can be well under 5 years for many operators. Cost-benefit analyses should consider:

  • Short-term savings from eliminating waste hauling/tipping fees
  • Projected annual revenues from byproduct sales and tipping fees
  • Any federal/local tax credits, incentives or rebates
  • Long-term waste disposal costs avoided by recycling on-site

The math often works out quite favorably, positioning waste as a revenue-generator rather than just a costly line item to minimize.

For example, Utah’s Uinta Brewing installed an anaerobic digester that costs just $30,000 annually versus over $100,000 previously for landfilling their solid brewery waste - while generating $60,000 per year in biogas revenues.

Industry Innovation Leaders

While more restaurants hopping on board, adoption of comprehensive food waste reduction and recycling strategies is still relatively nascent industrywide. However, a growing cohort of chains and indies are championing and scaling inventive solutions that demonstrate what’s possible.

  • Starbucks has rolled out protocols to rescue all unsold food items and provide it to local food banks across North America, supplying over 35 million meals so far.
  • Sweetgreen set a zero-waste goal by 2032 and already donates hundreds of thousands of meals through a “Nomofomo” surplus program.
  • &pizza, an East Coast chain, diverted 170 tons of food scraps to nutrient recyclers last year by composting and contracting regional anaerobic digester facilities.
  • Texas Roadhouse says it has cut overall food waste over 20% by deploying advanced inventory analytics.

On the indie side, chef Rick Bayless treats low-waste practices as an obsession across his acclaimed Chicago restaurants. Through continuous staff training and recipe refinement, his kitchens minimize overproduction. The Lazy Bear team pioneered creative techniques like fermenting and dehydrating to extend ingredients’ lifespan and reduce spoilage.

These industry leaders underscore that implementing waste-reduction requires committed ownership from restaurant leadership. However, their examples also provide a blueprint for achievable steps and payoffs.

Getting Started

For restaurants looking to modernize operations, become greener and benefit the bottom line, here’s a path to initiate meaningful food waste reductions:

  1. Conduct a Waste Audit

Over 1-2 weeks, closely track and analyze all food waste sources - overproduction, spoilage, customer plate waste, etc. This identifies biggest culprits to tackle first.

  1. Engage Teams

    Share audit findings transparently. Explain how staff habits directly impact the bottom line. Get feedback on antiquated processes. Incentivize teams to champion solutions.

  2. Start With Lean Ops Fundamentals

    Update outdated purchasing procedures, implement strict portioning practices, and establish a donation program for any surpluses.

  3. Explore Innovative Recycling Options

    Research partnerships for composting, anaerobic digestion, or animal feed programs in your area. Agencies like EPA’s Food Recovery Challenge can assist with solutions.

  4. Deploy Forecasting and Inventory Tech

    Leverage production management systems with live sales and inventory tracking to make predictions, and use automated ordering/paring to lock in efficiencies.

  5. Update Training Procedures

    Instill standardized low-waste protocols and continuous improvement practices from the outset with each new hire.

  6. Market Sustainability Initiatives

    Set public-facing goals and highlight food recycling/reduction in your brand identity and marketing to appeal to eco-minded customers.

The key is starting with small steps and building momentum over time. Even simple measures like smarter purchasing and donating surplus can provide an initial financial return and brand boost. From there, investments in technology and innovative recycling solutions allow capturing increasing value from minimizing true “waste.”

Conclusion

Taking a comprehensive approach to preventing food waste and eliminating systemic overproduction and inefficient inventory management translates directly to protecting profitability. Partnerships with composters and other recyclers can turn waste into new revenue sources.

Tangible food waste reduction and recycling allows restaurateurs to build brands aligned with environmental values that employees and diners increasingly prioritize. Combined with tax benefits, avoiding costly disposal fees; the financial case becomes extremely compelling.

Rezku has been helping new and established restaurants achieve their business goals using the latest restaurant management software for over 10 years. Contact us today for a complimentary restaurant technology consultation.

Phone: 844-697-3958 x2

eMail: Sales@Rezku.com