Research suggests that around half a pound of food is wasted on average per meal per day in restaurants all over the world. In India, annual wastage of food in restaurants amounts to thousands of crores in monetary terms. Food waste is a severe crisis that we collectively face. Especially in a developing country like India where the disparity between the poor and the rich is glaringly high, it’s a crime to waste billions of tonnes of food at restaurants.
Wastage of food not only adversely affects the environment but leads to the untimely collapse of many restaurants. This alarming issue results in a huge loss of profits for the restaurant business. It leads to surging food prices and an eventual decline in turnover.
Many organizations and start-ups are coming up with effective and innovative ways of curbing the amount of food wastage by a considerable amount within the next 10 years.
Such a strong supply chain management system is offered by Dineout, India’s largest dining out platform. Dineout provides a cloud-based restaurant software system that helps in effectively managing a restaurant’s backend operations. It helps to manage inventory at a centralized or decentralized kitchen level resulting in increased profit margins and wastage reduction to 2%.
A few such ways of keeping a tight rein on food wastage in restaurants have been enumerated below.
1. Waste Audit
A waste audit delves deep into the minute details and reasons behind the food wastage crisis. A systematic review or assessment is imperative to know the facts that lie hidden beneath the superficial surface.
Conducting a waste audit involves getting your hands dirty as you need to rummage your trash bin. Audit the trash minutely before disposing it off. The first step to auditing involves categorising the trash into paper goods, takeout supplies, meat products, agricultural produce, plastic, etc. The classification depends on your restaurant’s type, menu, special features, etc.
After that, calculate the weight of each of those waste stacks on an annual basis. This will give a clear idea as to the most weighed waste basket among the lot indicating the highest amount of category-wise wastage annually. A waste audit guides you and pinpoints the changes you need to make to reduce food wastage.
2. Training of Staff
This is a matter of values and principles. It needs to be permeated across all levels of staff. It’s not only about cooking the best food, but the chefs must also be careful not to pile up a big load of scrap. Every dairy, agricultural or meat product is important. Emphasis on the store’s ledger and stock-taking is key. A strict policy will keep the staff aware of the unnecessary wastage of food.
3. Waste Journal
A waste journal acts as a constant reminder of the crisis. In turn, it helps the staff to stay alarmed for useless wastage. The team should record the weight of the trash bins and the individual categories of waste stacks as found in the internal audit. Meticulous documentation paves the way for a better check against food wastage. A waste journal should also include details of items like rotten goods, spillage, broken crockeries, etc. Unnecessary events resulting in wastage of food items must also be documented. Further inspection must be carried out to find what was at fault.
4. Adoption of the FIFO Method
FIFO means First-in/First-out method. FIFO reduces spoilage. It denotes that the stocks which are oldest will be used first i.e. the items which came in the earliest will be the first ones to go out. For e.g., if a particular raw material is purchased on Friday and then again on Tuesday, then the ones which got into the repository on Friday will be utilized first.
FIFO helps in proper movement of goods and ensures that no stock is wasted due to negligence. It is recognised as the most appropriate inventory valuation method. Other methods are more susceptible to wastage as the usage then becomes need-based and no particular order is adhered to.
5. Over-preparation of food
At times, some ingredients are quite frivolously used by the staff. For e.g. additives or accompaniments like sauces. A waste journal will give you an idea regarding excessive usage. If inspected properly, anomalies will be found.
The preparation of food needs good planning. A restaurateur must understand the pulse of the business to identify and forecast the usage of certain items depending on the average footfalls on a daily basis. Your kitchen must pile up or relinquish orders of raw materials accordingly.
6. Storage Facilities
It’s a primary objective to account for proper storage facilities when you are managing a restaurant business. Certain foods need to be stored at a certain temperature. Certain food items need marinating overnight or for a few days. Suitable containers and appliances must be kept to keep the items fresh. Food items should be sorted according to their types. Perishable items need to be labelled with a special eye on the expiry date. Sometimes colour-coded labels are used for better functioning.
7. Inventory Days on Hand
Inventory days on hand (DOH) is a concept that helps you gain a comprehensive knowledge of the performance of each food stock. It is a metric that can be applied to every stock to see if it is selling well or getting wasted. Inventory days on hand can be calculated by dividing the average inventory of a particular stock by its cost of goods sold (COGS), and then multiplying the result with the number of days you want the figure for (7 days for a week, 90 days for a quarter, 365 days for a year, etc.). This formula can be applied to the whole of the inventory also.
The inference is if stocks have a lower ‘inventory days on hand’ ratio, then they are selling thick and fast, denoting that the items are a hit with the customers and are in high demand. While making an order for those stocks, you can get a better discount for bulk purchases.
But if some stocks have a higher ‘inventory days on hand’ ratio, then it indicates that they are stuck in the stores for a long time. It means they are not selling fast. You can make appropriate provisions for such items while placing your next orders and conduct an investigation as to why the items are not popular amongst the customers.
Inventory days on hand also helps you understand the current trends among the foodies that can influence your decision regarding making changes on the menu.
8. Use of Technology
Traditionally, a restaurant point of sale (POS) system was used for facilitating transactions. In the modern-day, it is availed for a variety of services including inventory management. It tracks your inventory and monitors real-time usage of products. A kitchen display system (KDS) integrated with a restaurant POS helps you get the best out of modern-day technology. It aids in product-costing, integration of online orders into the operations, optimization of stock levels, reduction in chances of theft, etc. It gives a detailed report on the average time being needed to process and also prepare an order.
It is important to make use of the best technology available that can directly result in food wastage reduction and increase profitability.
9. Multi-Use Menu Items
Spoilage can be reduced if you can make use of food items in multiple preparations. This holds true for special items that otherwise would only be needed in one signature dish or a few dishes. But if it can be cleverly used in other dishes then wastage can be reduced. At the same time, the particular item’s inventory days on hand ratio will improve considerably.
10. Weekly Specials & Promotions
If there is an excess of some items on hand after the end of a period (say a week or a month), then a novel way of utilizing the stocks instead of letting them get wasted and coming up with a newly invented weekly special dish is a great idea. Giving a discounted limited-time offer will attract customers to those items. You can also innovate and put those items in other dishes as complimentary offers or even as combos.
11. Food Seasonality
Some food items are seasonal. The demand for such items will be high in some seasons and low in some seasons. Provisions should be made likewise. For e.g. ice-creams will sell less in winter than in summer. A restaurant owner must learn to either revamp their menu accordingly or order less of that particular off-season item. This will help reduce wastage of such food stock for those seasons.