If your business is trying to find creative ways to shore up your bottom line, there’s one place you may not have considered—the dumpster.
Profit margins are always slim in the restaurant business, and 2020 was especially rough. Some restaurants did not survive, and many that did are in dire straits. Are you throwing away profits without even realizing it?
The Problem of Food Waste
Food waste statistics are alarming. ReFed reports that the foodservice industry generates an astonishing amount of wasted food—12.7 million tons, with just over 70% of that scraped into the garbage from customer plates. Overproduction, expired food, poor trimming, and spoilage account for most of the rest. Even without adjusting portion sizes, suppose you could save 20-30% of food costs to better understand where you’re losing product?
As the foodservice industry struggles to get back in the black, every penny counts. Now is a great time to perform a food waste audit to figure out just how much money you are literally leaving on the table (or tossing in the trash!).
What Should Food Cost Be in a Restaurant?
Food cost is calculated in two ways: plate cost, which is the total cost of plating a meal (also called portion cost or recipe cost), and period cost, which is the total cost for all food purchased over a specific period. Understanding how to calculate food cost is a critical factor in pricing your menu items.
Profitable restaurants usually operate within a 28%-35% period food cost percentage, depending on the type of food they serve. Steakhouses tend to run at the high end of the scale, while Italian restaurants that rely heavily on pasta and sauce tend to have lower food costs. If your restaurant is hitting those targets, you should be doing well. If not, you need to know why.
The answer might surprise you. Small instances of food waste can add up to big bucks:
- A chef who is a little heavy-handed with expensive cheese in his signature soup.
- Individually wrapped butter pats ending up in the trash.
- Kitchen mistakes, like steaks and fish inexpertly trimmed during meal preparation.
- Perishable items few people order spoiling in the refrigerator.
- New vegetables stored in the front of the refrigeration unit and used first.
- Half a pan of lasagna unsold.
In most cases, it’s all of the above and more. And despite its profound impact on their bottom line, food waste tracking is often overlooked.
Perhaps the most famous example of minor changes making a big difference is a story from the airline industry. In 1987, Robert Crandall, the CEO of American Airlines, calculated that the airline could save $40,000 per year by removing one olive from every salad. It worked, and customers didn’t even notice.
Getting Your Staff Onboard with a Food Waste Log
To deliver consistency, professional chefs meticulously detail the precise amount of each ingredient for every recipe, but in a busy kitchen, the rules are not always strictly followed. Since you need their cooperation, it’s essential to explain what you’re doing and why. An incentive may also be helpful, perhaps a quarterly bonus if they hit a specific target or a staff party.
The Benefits of Keeping a Food Waste Log
Keeping track of garbage is more useful than you might think. Like so many other metrics, it can help you make more informed decisions about what to buy, how much to plate, and where you’re losing money. Here are ten ways a restaurant waste log can put money in your pocket:
1. Understand customer wants.
Your menu may be outdated or not targeted. If you’re serving crispy Brussels sprouts to a collard greens crowd, a lot of it will wind up in the trash. Ask your servers and bussers to note what leftover food customers leave on their plates or ask to substitute when they order. If the same thing keeps coming up, you’re not only wasting food—your customers aren’t pleased with the selection. Offer alternate choices or offer it as an add-on if enough customers like it to keep it on the menu. Higher customer satisfaction is always money.
2. Cut down on expired perishables.
How many perishables never even see a plate? If you’re throwing out food in the kitchen, you can adjust ordering procedures to buy only what you need.
3. Gain a better understanding of pricing.
If you track what goes in the garbage, you can better understand whether your prices are in line. Offering a pricey lobster dish may be a good draw, but it may not be cost-effective if customers don’t order the dish enough. Consider making expensive items a reasonably priced special (loss leader) on a slow night or an add-on to other meals if your restaurant menu is mid-priced or lower.
4. Find creative solutions for edibles you may be throwing out.
Broccoli stems, for example. Broccoli cheese soup is a popular menu item. Ditto vegetable soups and baked potato soups or cheesy twice-baked potatoes for cooked leftovers. That’s extra money you can take right out of the garbage, and your customers will love it. Innovative solutions in the restaurant industry are a key reason why some restaurants survive and some don’t. Don’t let unnecessary food waste ruin your bottom line if you can compose tasty and creative dishes with more food resources.
5. Streamline ordering.
Keeping track of food waste gives you a clear picture of what you need and when. You may be surprised to learn that customers order different things on different days, and even the weather can be a determining factor. Make sure your restaurant POS system is up-to-date and working effectively for your staff. If a point-of-sale system update is needed, make sure to work with your team to make sure they know how to best use all the features and tools of the system—including tracking food waste more appropriately.
6. Assess kitchen staff performance.
How many meals get returned to the kitchen and why? If your staff makes the same mistakes repeatedly, it might be a training issue, a serving issue, or even a faulty equipment issue. Working in a restaurant kitchen is hard work, and your kitchen staff is the backbone of your restaurant’s success.
If you suspect kitchen staff performance might be affecting the amount of food waste you’re seeing, take a step back and ask, what can you do to improve your procedures, training, and overall kitchen staff morale?
7. Identify theft.
If food is missing but not in the trash or on plates, where is it? Unfortunately, theft is common in the restaurant industry. When you know what you’re throwing out, you can find other issues. Careful tracking may put an end to theft immediately.
8. Boost customer satisfaction.
Your restaurant customers expect the same quality of food at each visit, not different levels of quality when other cooks are in the kitchen. Strict procedures for ingredients and plating ensure that the customer experience is what they expect every time.
9. Better kitchen hygiene and food safety.
Observation and implementing strict protocols also allows you to identify and prevent cross-contamination issues. A CDC report showed that workers are more likely to practice food safety when restaurant procedures are in place, and that staff receives training, monitoring, and comply with new policies.
10. Portion adjustment.
Giant food plates are a good way to put your restaurant on the map, but you may be losing lighter diners to soup and salad or split plates. If your research reveals that under-ordering is an issue, add lighter or smaller menu options to satisfy the diners you’re losing and make more sales.
How to Keep a Food Waste Log
For comprehensive food waste reduction, you’ll need to track and document two kinds of food waste:
Pre-Consumer Waste: Food you ordered and paid for that never left the kitchen.
- The most common source of pre-consumer food waste is over-production when your cooks prepare more food in advance than is sold. It’s usually items prepared in bulk, like soups, stews, or lasagna.
- Next up is perishable foods that go bad or expire before use. Are you ordering too much? Consider working with your food vendors to find the best deals that work for your restaurant’s needs.
- Finally, consider trimmings. Meat and vegetables must be trimmed before going on a plate, but bad techniques can cut into your profit margins. Kitchen managers can often correct this with proper training and procedural decisions about what to do with sizeable remains that don’t fit your plate aesthetic.
Post-Consumer Waste: food left behind by customers.
- Tracking what’s thrown away and not taken home may reveal persistent patterns. Could you cut portion sizes by 10% and reduce waste without affecting customer satisfaction? If so, you may be able to cut costs with a painless move.
- Food sent back to the kitchen is another expense you may cut down with training and procedure.
Create a simple food waste sheet for daily tracking and have employees in the front and back of the house make notes of their observations. It doesn’t have to be fancy; a simple notepad will do.
Train bussers or dishwashers to scrape food waste into two bins, meats, and vegetables/other, which the staff can weigh before throwing out. Since meats represent a significantly higher cost, it will help to know how much is tossed to the trash. You’ll also be able to eyeball what’s hitting the trash most often. If your meat bin is consistently light, your portions are good.
Food Waste Cost Cutting Tips
- First in, first-out (FIFO): First in, first out is a practice used by almost every experienced kitchen manager. Incoming perishables are moved to the back of the shelf while existing stock is pulled forward for first use.
- Just-in-time (JIT) ordering: If you can work it out, smaller, more frequent orders ensure that your kitchen has exactly what it needs, but only when needed. JIT delivery is especially effective for farm-to-table restaurants using local sources.
- Upgrade to Energy Star appliances: Efficiently heat water to the proper temperature for a clean kitchen and keep foods properly cold by replacing your major appliances when needed. You’ll reduce spoilage and help keep customers happy and healthy. If your appliances are more than ten years old, you may even cut your electricity bill. Today’s high-efficiency appliances are far more cost-efficient than old ones.
- Partner with a local charity to donate unused food. It may not save you money, but it will earn you goodwill in the community and may result in free publicity.
- Repurpose menu items to cut waste: Use leftover vegetable scraps from food trimmings for a hearty vegetable broth. Unused baked potatoes can be saved for baked potato soup. Undesirable or ugly cuts of meat should be chopped for stews or beef tips.
Keeping a restaurant waste log is not a one-time task, but it’s not something you need to do every day forever, either. Keep track using a waste audit process for a few weeks to identify issues, make changes based on your findings, and track again to check your progress. Regularly reinstate food waste logs to keep your restaurant and its profits on track.
