New Research Finds Restaurants Saved $7 for Every $1 Invested in Reducing Food Waste
WASHINGTON (February 13, 2019) — New research on behalf of Champions 12.3 finds there is a compelling business case for restaurants to reduce the amount of food they throw away. For every $1 restaurants invested in programs to reduce kitchen food waste, on average they saved $7 in operating costs.
In a first-of-its kind analysis for the industry, The Business Case for Reducing Food Loss and Waste: Restaurants evaluated financial cost and benefit data for 114 restaurants across 12 countries, finding that nearly every site realized a positive return on its investment to reduce food waste. Within just one year, the restaurants had reduced food waste from their kitchens by 26 percent on average, and over 75 percent had recouped their investment. The restaurants range in size from small restaurants with annual food sales of $400,000, all the way up to multi-million-dollar restaurants with annual food sales of $17.3 million.
The types of investments restaurants made included: measuring and monitoring the amount of food wasted, training staff on new food handling and storage procedures, and redesigning menus. Every site was able to keep their total investment below $20,000. This shows that the cost of change was low and the benefits were high for all businesses assessed.
The 7:1 return on investment comes from buying less food and thereby reducing purchase costs, increasing revenue from new menu items developed from leftovers or foods previously considered “scraps,” and lower waste management costs.
“The only way we can halve food waste by 2030 is if restaurants and other businesses along the supply chain step up their action. Every part of the food industry has a responsibility to reduce food waste,” said Dave Lewis, Group Chief Executive of Tesco and Chair of Champions 12.3. “These findings make it crystal clear that reducing food waste isn’t just the right thing to do, it’s also the smart business move.”
For example, IKEA restaurants serve 680 million people each year. Today IKEA announced that it has prevented more than 1.4 million kilos of food from being wasted since 2016, when the company started an initiative to halve food waste across its 400+ restaurants worldwide. That is equivalent to saving more than 3 million meals worth of food.
“These figures confirm what we have seen at IKEA: reducing food waste goes hand in hand with reducing costs,” said Michael La Cour, Managing Director at IKEA Food Services AB. “We view fighting food waste not only as an opportunity to create a better world, but also a great business opportunity. We’ve been able to significantly reduce food waste in our restaurants by setting short-term, actionable goals. It’s a strategy everyone can do, and if more food businesses take on the challenge, they can see similar results.”
Globally, one-third of all food produced is never eaten, which has tremendous economic, social and environmental consequences. Food loss and waste is responsible for $940 billion in economic losses and 8 percent of global greenhouse gas emissions annually. At the same time, some 800 million people do not have enough food to eat. The recent report Creating a Sustainable Food Future – produced by World Resources Institute in partnership with the World Bank, UN Environment, UN Development Programme, CIRAD and INRA – identified reducing food waste globally by 50 percent as a critical to meeting the Paris Climate Agreement while feeding 10 billion people by 2050.
“That we’re releasing these findings on Valentine’s Day is more than a sweet coincidence. This holiday is one of the busiest days of the year for restaurants, so what better time to talk about an issue every kitchen deals with – wasting money on food that doesn’t make it to the plate,” said Liz Goodwin, Senior Fellow and Director, Food Loss and Waste at World Resources Institute. “Chefs and kitchen managers put a lot of care into the food they serve. If they give just as much attention to ensuring none of it goes needlessly to waste, they also can put money in their pockets. What’s not to love about that?”
The report recommends restaurant owners and managers take a “target, measure, act” approach to reduce the amount of food wasted from their kitchens. It outlines five action steps for restaurant managers, based on interviews with those who have implemented successful food waste reduction programs:
- Measure the amount of food being wasted to know where to prioritize efforts,
- engage staff,
- re-think inventory and purchasing practices,
- reduce overproduction, and
- re-purpose excess food.
By working together, businesses may also be able to share new best practices to make an even greater impact and put businesses on a trajectory to halve food waste in line with the UN’s Sustainable Development Goal Target 12.3.
“This report, which WRAP has produced with WRI, shows how businesses big and small can save money, motivate staff, and impress their customers through reducing food waste. It’s a win-win for the economy, and the environment,” said Marcus Gover, Chief Executive of WRAP.
For more information, read the full report at www.champions123.org/the-business-case-for-reducing-food-loss-and-waste-restaurants.
This report is follow up from The Business Case for Reducing Food Loss and Waste (published March 2017), and is the third in a series of papers examining the business case for specific industry sectors. Analyses of the hotel and catering industries were released in 2018.
The Business Case for Reducing Food Loss and Waste: Restaurants was made possible by support from Walmart Foundation and Ministry of Agriculture, Nature, and Food Quality of the Kingdom of the Netherlands. Lead authors were Richard Swannell (WRAP) and Austin Clowes and Craig Hanson (WRI).
ABOUT CHAMPIONS 12.3
Champions 12.3 is a coalition of nearly 40 leaders across government, business and civil society dedicated to inspiring ambition, mobilizing action, and accelerating progress toward achieving Target 12.3 of the United Nations’ Sustainable Development Goals. Target 12.3 calls on the world to “halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses” by 2030.
The Government of the Kingdom of the Netherlands and the World Resources Institute serve as co-secretariats of Champions 12.3.