The Business Case for Investing in Food Waste Prevention

An appalling 30 percent of all food produced for human consumption is wasted or lost globally, according to a recent report released by Champions 12.3. While food waste is an issue that often lurks at the periphery of sustainability initiatives, the sheer magnitude of the loss is unacceptable in a world where 1 in 9 people are undernourished.

Champions 12.3, a coalition of executives from a wide variety of industries and governments, isn’t just the bearer of bad news, however. Its report contains the data on a multi-year experiment on reducing food loss and waste in restaurants, a natural place to start tackling the problem. The results are in—and the prognosis is positive.

There exists a complacency in the restaurant business borne of a challenging and unchanging occupation. Lots of little costs—a customer doesn’t like their food, someone dropped their drink, the gluten-free meal wasn’t prepared separately—can eat into an already small profit margin. Food loss is just one of many such issues, so it’s often built into operating costs. Any restaurateur might initially dismiss the idea of trying to save food as too costly.

But that’s not so.

A total of 114 restaurants pioneered Champion 12.3’s case study, and their investments in food loss and waste prevention totaled a mere 0.4 percent of their annual food sales. Furthermore, 76 percent of the participating restaurants recouped their investment in the first year, and 89 percent had broken even by year two.

How did they manage such a quick return on their investment? By using food loss prevention tactics that kill two or more birds with one stone. For example, reimagining a menu to utilize the same meats in both breakfast and lunch uses up leftovers, reduces storage burden, and saves costs by sending less material through waste disposal services.

Each restaurant implemented five strategies to cut food waste down to size:

1. Measure: While it’s a hassle quantifying waste, this tactic proved absolutely essential to success. A smart scale that was able to store data about weight and type of food was the most useful tool.
2. Engage staff: Staff training on new procedures is important, of course, but equally valuable was getting them in on the vision. For accurate reporting, it was stressed the food loss and waste was no fault of theirs. Many restaurants reported that some of the best conservation ideas came from the staff, which is no surprise considering they’re the ones with their hands on the food.
3. Reduce overproduction: While batch cooking and similar practices are common since they appear to impart a cost-saving despite inevitable loss, intuition turns out to be false in this case. If one considers the entire cost of overproduction, from the sourcing of food to final disposal, cooking in large quantities often ends up being more expensive.
4. Rethink inventory: The natural result of reducing food waste will be renegotiating contracts in a restaurant’s favor, allowing the business to reallocate money and space.
5. Repurpose excess food: Predicting customer demand is difficult even for a McDonald’s. Finding alternate ways to use already prepared food, such as creating soup stock from kitchen scraps or integrating cooked food into a casserole, saves money by selling food that would have been wasted.

Almost every participating restaurant in this study eventually hit the 50 percent food loss and waste reduction targeted by the United Nations Sustainable Development Goal 12.3, which aims to slash food waste in half by 2030. Along the way, these businesses reaped the sweet reward of a benefit-cost ratio of 5:1 to as high as 14:1. 

As it turns out, neglecting to conserve food is ends up leaving money on the table (and not the kind that tips the waiter). Managers and restaurant owners should seriously consider an audit on their food loss; chances are that they could save 2 cents on each dollar of the cost of goods sold.

Image credit: Igor Ovsyannykov/Pixabay