According to a publication by the NRDC (Natural Resources Defense Council), it is conservatively estimated that U.S. Restaurants (full and quick-service) generate between 20 to 30 billion pounds of food waste each year. Combine that with Statista’s estimate of 647,288 restaurants in the United States and the result is about 33,987 pounds of food waste annually per restaurant. YIKES!?!
Are you doing everything you can to manage your inventory? Along with labor, it is the most important cost you have to manage to maintain profitability. Many restaurant owners find themselves swirling in a mass of paperwork each day related to taking physical inventory, recording the purchase and use of inventory, and trying to plan for exactly how much they will need on hand for the current day and weekly sales. That’s a tough job when you are doing it all by hand.
If you manage a QSR, you know there is no crystal ball, but if you don’t have the right tools to help you manage your inventory and make these decisions, then you know that it can result in significant waste of product. Additionally, if you are relying on excel, gut, or just a weather prediction to make these decisions – there is likely room for improvement.
What does that translate to in terms of dollars and profitability for your store? And what specifically is causing it? It would be wrong to say that it’s all on the “front end”, meaning before you make the sale. Some of that food is wasted by the consumer after they purchase it. However, a good store manager knows there are specific areas that can be managed to cut waste before it gets to the end consumer.
- Trim waste- This is especially important for those QSR’s that do a lot of their own food preparation. Some QSR’s get all of their buns ready to use. However, what if you buy bread and slice it? Who is monitoring the trimmed ends? At the end of the day, you likely have enough trimmed ends to make several more sandwiches.
- Mishandling- This can encompass many different meanings. It could be overcooking the food, not processing a customer’s order correctly, or even when preparing “pre-packaged” items they are put together incorrectly causing you to throw the food away before it gets to the consumer.
- Wide ranging menu choices- The more your customers have to choose from, the more ingredients you must manage.
- Making too much- This is largely dependent on your ability to forecast sales. Along with number five, this is one of the major downfalls of many QSR’s.
- Buying too much- Trying to predict sales and regulate your inventory purchases can be the most difficult part of the job. Many managers are still doing this in a very manual fashion which will inevitably result in errors.
All the above costs are manageable, but store owners need to implement a less labor intensive method to be able to quickly identify the high food costs and take action.
My recommendation would be to stop taking inventory using paper sheets, managing reorders using pencil and paper combined with gut instinct and sometimes a bit of knowledge about last Sunday’s sales. This is not the best method. While it clearly is not providing the real-time data that you need to make quick decisions, it is also a huge waste of time, effort, manpower, and money.
The solution? Invest in the technology that will enable your store managers to take inventory, manage counts, monitor ideal food costs, and forecast orders. With the right tools to manage this process and get actionable insights restaurant managers should be able to eliminate waste and increase profits as a result.