Reducing Food Waste Saves Hotels Money

Hotels saved $7 for every $1 invested in reducing food waste. This and more findings were revealed in a research that provided a compelling business case on food resource efficiency and good business practices, reports Mallika Naguran.

WASHINGTON, 5 April 2018. New industry research has shown that reducing food waste does not just conserve earth’s resources but also boosts the coffers.  For every $1 hotels invested in programmes to reduce kitchen food waste, on average $7 in operating costs was saved.

 Food waste reduction begins with staff engagement

Food waste reduction begins with staff engagement

The Business Case for Reducing Food Loss and Waste: Hotels evaluated financial cost and benefit data for 42 hospitality sites across 15 countries, finding that nearly every site realised a positive return on its investment to reduce food waste.

The report was prepared on behalf of Champions 12.3, a grouping of “executives from governments, businesses, international organizations, research institutions, farmer groups, and civil society dedicated to inspiring ambition, mobilizing action, and accelerating progress toward achieving SDG Target 12.3 by 2030.”

SDG 12 seeks to “ensure sustainable consumption and production patterns.” The third target under this goal (Target 12.3) calls for cutting in half per capita global food waste at the retail and consumer level, and reducing food losses along production and supply chains (including post-harvest losses) by 2030.

Within just one year, the hotels surveyed reported reduced food waste from their kitchens by 21 percent on average, and over 70 percent had recouped their investment.  Within two years, 95 percent had recouped their investment.

 Living up to SDG 12

Living up to SDG 12

The hotels that participated in the research fall under the luxury, mid-range, economy, full-service and gaming market sectors, and these include Sofitel and MGM.

The types of investments hotels made include: measuring and monitoring the amount of food wasted, training staff on new food handling and storage procedures, and redesigning menus. Nearly 90 percent of sites were able to keep their total investment below $20,000 over the three year period, which was less than one percent of sales on average. This shows that the cost of change was low and the benefits were high for all businesses assessed.

The return on investment (ROI) comes from purchasing fewer food items and increasing revenue from new menu items developed from the leftovers or foods previously considered as “scraps”, in addition to lower waste management costs.

“We need to take action right across the food chain if we’re going to halve food waste by 2030. That means reducing food waste in homes, farms, retail, distribution, and in the hospitality sector,” said Dave Lewis, Group Chief Executive of Tesco and Chair of Champions 12.3.

“This report clearly shows that reducing waste in hotels isn’t just the right thing to do. It also makes good business sense. So even if the moral imperative doesn’t move us, the business case for reducing food waste should persuade every CEO.”

“With these figures, I hope more in the industry will see food waste reduction as an opportunity and an important part of the hotel business,” said Lionel Formento, Director of Food and Beverage, Sofitel Bangkok Sukhumvit.

“Our customers increasingly care about the environment, and that shift shows no signs of slowing down. Sofitel Bangkok Sukhumvit has prioritised reducing food waste as an important part of our sustainability efforts. From engaging management to our chefs and suppliers, implementing a food waste reduction program has helped us stay innovative and a leader.”

 Buffets often result in incredible food waste. Champions 12.3 research shares food waste reduction strategies and results by participating hotels. Image courtesy Fisherman's Market

Buffets often result in incredible food waste. Champions 12.3 research shares food waste reduction strategies and results by participating hotels. Image courtesy Fisherman's Market

One-third of all food produced in the world 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.

Against such dismal global scenario, it has become imperative for hotels and food & beverage entities to stop food waste. The report recommends hotel 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 hotel managers, based on interviews with those who have implemented successful food waste reduction programs: (1) measure the amount of food being wasted to know where to prioritize efforts, (2) engage staff, (3) re-think the buffet, (4) reduce overproduction, and (5) re-purpose excess food.

Investment and Strategies in Food Reduction

Measure and Monitor. Creating a food waste inventory helps F&B managers to understand where food is being wasted, what kind of food they are, and just how much.  A food waste inventory in addition to food acquisition inventory revealed “hot spots” of waste that became priority areas for the monitoring of food reduction progress over time. All of the surveyed sites used smart scales to measure their waste.

Smart Scales. One of the investments made into reducing food waste was getting smart scales or similar measurement technology.  Smart scales are tools installed in the kitchen that record the amount, composition, and value of food waste with an easy-to-use, customisable user interface. Examples of smart scales are tools sold by the firms LeanPath and Winnow. Staff were also trained on how to do the measurement and various techniques to reduce waste.

Staff Engagement.  It was found that staff engagement was a key variable that determined

the success of a food waste-reduction program among the surveyed sites. While staff especially in the kitchen and service staff wanted to help prevent food waste at work, they needed more definition and guidance from leadership.

The report suggested that daily staff meetings, casual conversations, formal training, or even establishing peer learning opportunities can help provide such guidance. Another factor is to remove the fear of blame if food waste occurs. Rewards for measuring are better motivators for change.

Other hindrances to establishing long term improvements are frequently changing menus and high staff turnover rates. Here is where the role of good management comes in: to embed the importance of waste reduction into standard training and operating procedures along with tactics for achieving it.

At MGM Gold Strike Resort and Casino, the management leads the food waste-reduction programme. Initial scepticism by staff was overcome through a weekly reward system for their efforts in the smart scale use and meetings on food waste. Along with more accurate data collection, a culture change was experienced where kitchen staff even proposed solutions that addressed efficiency problems in a creative manner.

Rethinking the Buffet. A significant source of food waste in hotels and restaurants is the “eat as much as you can” buffet. Successful strategies for reducing buffet waste included reorganising the placement of certain food items (having individual servings rather than pans of food), displaying messaging about food waste near the buffet (a placard explaining the site’s own food philosophy and internal commitment to reduce food waste), and offering high-value items such as meat only via à la carte (WWF 2017).

Other tricks: provide smaller plates for customers. Also and if it is safe to do so, to sell leftovers from the buffet later in the day.

Reduce overproduction. In the many sites surveyed, each had at least one food item on the menu that was not consumed as much as the others consistently. Noting this, by producing smaller quantities of such items, the sites could lessen food waste without affecting negatively the customer experience.

Being more diligent about a meal’s potential head count enabled better forecasting of needs while reducing overproduction. The reported stated that while the surveyed sites already had head count accuracy as a goal, the very act of placing food waste reduction higher on the agenda of staff triggered higher emphasis on more accurate head counts.

Repurpose excess food. Leftovers and potential waste are unavoidable in most cases even with forecasting. As such, it is useful to have an alternative plan – how to safely repurpose leftovers. This could generate revenue as well.

Examples are repurposing unsold or leftover meat from breakfast as a potential ingredient for a lunch or dinner dish. Sites in the study that channelled food scraps (e.g., peels, seeds, skins, bones) into dishes (for flavouring or soup stock) were able to produce value from those items that otherwise would have been discarded, contributing to further food waste.

The report authors also urge hotels to donate any edible, unsaleable food to charity, rather than throwing it away.

This report, which WRAP co-authored with WRI, demonstrates the compelling economic case for reducing food waste in hotels. There is a 600 percent return on investment, and over two-thirds of the companies find they get their money back within a year. This is excellent, but if we are to deliver the SDG 12.3 target of halving food waste by 2030, we must build momentum for change in all hotels,” says Marcus Gover, Chief Executive of WRAP.

“We have clearly shown that with simple measures, hotels can save money, protect the environment and still satisfy the needs of their customers. By working together we can make this happen more rapidly, all around the world.”

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.

“The Sustainable Development Goals give us clear targets, which we need to achieve in just 13 years. We know that the worldwide food waste challenge is large and urgent. It will not be easy to solve and requires action by all of us,” said Liz Goodwin, Senior Fellow and Director, Food Loss and Waste at World Resources Institute. “This report demonstrates that action by the hotel sector can bring results quickly and that there are real financial benefits to be realized. There is no time to waste and we need more leaders to step up and do their bit, improving their businesses and securing the economic, social and environmental benefits.”

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About the report

For more information, read the full report at https://champions123.org/the-business-case-for-reducing-food-loss-and-waste-hotels/

This report is follow up from The Business Case for Reducing Food Loss and Waste (published March 2017), and is the first in a series of papers examining the business case for specific industry sectors. Analyses of the catering and restaurant industries will be released later in 2018.

The Business Case for Reducing Food Loss and Waste: Hotels was made possible by support from Walmart Foundation and the Ministry of Economic Affairs of the Kingdom of the Netherlands. Lead authors were Peter Mitchell (WRAP) and Austin Clowes and Craig Hanson (WRI).

For more practical guidance, refer to Fighting Food Waste in Hotels, produced by World Wildlife Fund in collaboration with the American Hotels and Lodging Association (AHLA). It is available at https://furtherwithfood.org/wp-content/ uploads/2017/11/HotelKitchen_Final_Final_11102017.pdf.