The food service industry plays a vital part in the UK and Irish economy. Employing over 2 million people, it provides sustenance and creates memorable experiences for many.
However, within this dynamic sector lies a huge challenge: food waste.
ESG
food waste
industry
Maximising Profitability and ESG by Reducing Food Waste
Can you maximise ESG? A guide for food service businesses
2000000
people employed in the UK's and Ireland's food service industries.
33
of all food produced is thrown away on a global level.
Globally, one third of all food produced is thrown away. This results in wasted resources and contributes greatly to climate change. It’s a complex problem occurring at every level of the supply chain, and as the food service industry continues to grow, the issue becomes more serious.
Why plate waste cannot be ignored:
53
Food wasted cost
39
Labour cost
8
Energy & waste management
So if the actual food wasted cost is 53%, the real cost is circa double when other factors are considered.
These challenges present an opportunity to improve food service operations.
Understanding the relationship between food waste, profitability and ESG goals is key for businesses aspiring to thrive in today’s industry.
DID YOU KNOW?
If food waste were a country, it would be the 3rd largest emitter of CO₂ after the USA & China.
The economic impact of food waste
Food waste not only causes extensive harm to the environment, but majorly impacts business profitability and the global economy.
2,500,000,000
cost to businesses
1,000,000
tons of food waste
FINANCIAL IMPLICATIONS
Wasted food costs businesses millions, so any efforts to reduce food waste will increase profitability.
According to The Food Waste Reduction Roadmap Progress report (WRAP), the UK hospitality sector wastes around 1 million tons of food each year, resulting in a cost of £2.5 billion. Likewise, the Environmental Protection Agency (EPA) estimates that the food service industry in Ireland loses approximately €300 million annually to food waste.
CONSUMER PERCEPTION
Using sustainable practices and raising awareness can enhance brand image, thus helping food service businesses attract and retain customers.
Reducing food waste directly contributes to the ‘environmental’ pillar of ESG, a key factor when it comes to gaining investors. What’s more, socially responsible businesses demonstrating a commitment to minimising food waste and attracting conscious consumers serve to enhance the ‘social’ pillar of ESG.
60%
UK consumers
70
Ireland consumers
ESG IMPACT
Consumers care
Sustainability is a key factor for customers when deciding where to spend their money – a survey by the Sustainable Restaurant Association indicates that 60% of UK diners consider a restaurant’s sustainability practices before choosing where to eat. In Ireland, a study by the Irish Food Board reveals that 70% of consumers believe restaurants should be doing more to reduce food waste.
DID YOU KNOW?
If 25% of the food currently being lost or wasted globally was saved, it would be enough to feed 870 million people around the world.
MAIN SOURCES OF FOOD WASTE
So how can food service businesses tackle the problem of food waste?
The first step is identifying where food waste is coming from.
- Unserved food waste – food that was meant to be eaten, but for some reason was not.
- Plate waste – uneaten food left on customers’ plates.
- Preparation waste – unavoidable waste generated in the kitchen, such as trimmings and peelings.
By weighing food waste bins at the end of each day for at least a week, businesses can keep track of how much is being generated. Comparing this against the number of covers creates a benchmark of food waste per cover.
Food service businesses that take action to minimise food waste by, for example, using software advances like DigiTally for stock taking, are demonstrating a commitment to ESG.
DID YOU KNOW?
An area larger than China and 25% of the world’s freshwater supply is used to grow food that is never eaten.
Strategies for waste management
A number of methods can be used to reduce food waste, including better inventory management and menu planning, data tracking with technology and employee training.
Supply Chain Management
A large proportion of food waste occurs in the supply chain – approximately 30% in the UK according to WRAP – leading to thousands of pounds being lost per year. To tackle this problem, an emphasis should be placed on improving inventory management and reducing overstock situations.
Nominate a champion – someone who takes food waste seriously and will work as a leader in each kitchen and can oversee purchasing– this decreases the chance of over-ordering.
Supplier selection – choose smaller suppliers that are closer to your premises. In turn, they will have a lower carbon footprint in their delivery and likely value your business more.
Source local fresh produce where possible – this means less spoilage and better negotiation on price and delivery.
Grow your own herbs – use them as necessary, leading to less waste of perishable packaged herbs. Rosemary and thyme are easy to grow.
Menu Planning
How menus are designed can significantly impact the amount of food waste generated. Ingredients on menus should be as seasonal as possible and re-used in various dishes to ensure as little wastage as possible.
A closed loop menu system is one strong strategy to consider. Here, leftover ingredients from the breakfast service are used again for lunch, and leftovers from lunch are used for dinner.
Chef Ali Honour discusses the benefits of this system in a recent Food Service Matters podcast.
Re-use ingredients in a variety of dishes – this is especially important for fresh and perishable items.
Prepare smaller menus – know the volume of sales for each dish and adjust your menu accordingly. This controls what is being ordered.
Encourage portion control – standardise portion sizes and offer half portions for customers with a smaller appetite.
Promote the specials – use up excess ingredients by including them on the specials menu.
DID YOU KNOW?
The UK throws away around 9.5 million tonnes of food waste in a year – even though 8.4 million people in the UK are in food poverty.
Technology integration
Smart technology software can make food waste tracking easier and more efficient. According to Too Good to Go, restaurants in the UK have reported a 21% reduction in waste since adopting these types of technologies. Similarly, in Ireland, the EPA estimates that smart kitchen technologies could potentially save businesses up to €6,000 annually per establishment.
What are the benefits of food waste tracking technologies like DigiTally?
High accuracy – find out exactly what, why and where waste is happening in your business.
Clear results – see evidence of your environmental impact, backed up with figures.
Easy to use – simple and less clunky than traditional stock taking methods, leading to reduced labour costs.
Control costs with access to a real-time checkpoint to monitor cashflow and margin targets.
Staff Training
Getting employees involved in food waste reduction efforts is an essential part of the food waste fight. The UK’s Sustainable Restaurant Association reports that staff training can lead to a 45% reduction in food waste. In Ireland, the EPA has found that implementing a focused employee engagement program could result in a 20% reduction in avoidable waste.
Food waste is not only one person’s problem to solve. Every member of staff has their role to play.
Chefs can find new ways to use up food before it’s wasted.
Kitchen porters should keep an eye on what comes back on plates.
Waitering staff can talk to customers and find out which dishes they want (and don’t).
Administrative staff should explore more economical ways of ordering.
Both front and back-of-house staff need to work together to reach a common goal.
For this, clear communication and setting realistic goals is key. With every member of staff looking for opportunities to reduce food waste, the issue becomes far more manageable. These efforts can then be communicated more widely on menus, your website and social media platforms to raise public awareness too.
Engaging your team can be broken down into 4 key stages
1. Awareness
Explain why managing food waste is important to your business and inspire staff to put forward ideas to tackle food waste in their day-to-day duties.
2. Accountability
Assign responsibilities to each team member and agree on realistic targets to hit, with timelines.
3. Action
Educate staff by holding training sessions and put up clear diagrams demonstrating techniques to reduce food waste. Use data from food waste tracking software to monitor and showcase progress.
4. Award
Share successes, support positive behaviour and celebrate milestones to show staff that their hard work makes a difference.
Financial benefits of reducing food waste
As well as the significant environmental benefits that come with reducing food waste,
there are many positive financial implications.
COST SAVING
Businesses in the UK save up to 3% of their total turnover by implementing waste reduction, according to WRAP. In Ireland, the EPA estimates an average cost saving of €6,300 per year, based on a restaurant reducing 20% of its food waste.
Quantifying the cost of your food waste with data tracking software like DigiTally gives you actionable data, creating a clear picture of your operational costs and bottom-line profitability.
Keep in mind there are many contributors to food waste
23
at production stage
12
in storage and handling
5
in processing
9
in distribution
51
at the consumption level
For measuring food waste, there is no “carrot and stick” approach.
There can only be a “carrot” approach.
Food waste does happen, but the only way of accurately reducing it is by pulling together as a team to analyse food waste data and come up with innovative and collaborative approaches to try and stop it from reoccurring.
Where there’s a food waste problem, there’s a profitability problem.
ENHANCED MARGINS
As well as the significant savings that come with better food waste management, the National Restaurant Association reports that successful waste reduction can boost profit margins by 5-10%.
What’s more, the EPA announced that in Ireland, optimising food costs and reducing waste could contribute to an additional 4-6% in profit margins for food service establishments.
The potential for huge increases in profits was further backed by Chef Ali Honour, who describes one business managing to enhance profit margins by 16%. This significant increase came about by implementing more efficient food waste management systems and closed loop kitchens.
ESG IMPACT
Financial stability resulting from waste reduction positively contributes to the ‘governance’ pillar of ESG.
In turn, this improved financial performance enables businesses to invest more in socially responsible initiatives, further enhancing the social and environmental aspects of ESG.
CASE STUDIES
By implementing better food waste management systems, these establishments successfully reduced their food waste, saved money and enhanced profit margins.
Using DigiTally software, H2 Group in Ireland has reduced their stocktaking time by 63% and reporting time by 75%, with a total of 1,200+ hours saved across the group.
UK-based Pret A Manger achieved a 13% reduction in food waste by implementing dynamic pricing strategies.
Dublin's Chapter One restaurant successfully reduced food waste by 20% through portion control and menu optimisation.
Legislation on food waste
Although the priority should be to prevent excessive waste in the first place, some food waste is unavoidable in a food service business. This must be dealt with correctly, following legal requirements.
THE LEGISLATIVE LANDSCAPE
Legislation differs from country to country, but certain regulations occur across the board, including:
- Correct waste separation – All food waste must be segregated from recyclable and general waste.
- Proper disposal – Food waste must be collected by an authorised collector and brought to an authorised facility.
- Macerators are banned – The use of macerators or similar units to dispose of food waste to sewer is prohibited, except if a premises has its own licensed wastewater treatment facility.
The UK’s Environment Bill aims to address waste reduction and sustainable practices, placing legal obligations on businesses, and Ireland’s Food Waste Charter encourages food businesses to commit to waste reduction targets and sustainable practices.
ESG IMPACT
If food service businesses comply with current environmental regulations, these efforts contribute to the ‘environmental’ pillar of ESG. This also showcases a commitment to sustainable governance.
The time for action is now.
Food waste is a massive problem that directly harms business profitability and the environment.
However, by taking strategic steps like improving supply chain management, using data tracking technology, training staff and following legislation, the financial and social benefits are clear.
The evidence shows that it not only reduces costs and improves revenue growth but enhances a business’ ESG credentials.
What’s more, on a more human level, tackling food waste is simply the right thing to do for our planet.
