The Cost of Going Green
A recent report from WRAP (Waste and Resources Action Programme) revealed that 920,000 tonnes of food is thrown away by the hospitality and food service sector each year at a cost of over £2.5bn. The tide would appear to be turning. Pledges made by Pret A Manger, wagamama and other high-street names to stop using plastic straws in their restaurants have followed widespread publicity around the environmental impact of food and packaging waste. Gareth Ogden, partner, haysmacintyre explains how joining the green juggernaut will not only improve your environmental credentials, but also your bottom line
With millennials increasingly becoming known as the ‘green generation’, the spotlight on environmental responsibility and sustainable practices has never been greater. We live in an era where consumer-driven demand for higher quality, healthier, sustainable food is transforming industry offerings and best practices.
While many operators seek to impose green practices purely on ethical grounds, they also have to be responsive to consumer expectations. In terms of sustainable best practice, what are the key steps to take and are there any financial implications to ‘going green’?
On first thought it may seem that investing in and implementing better practice would increase both money and time costs. However, there is evidence to suggest that significant savings can be made with more efficient, environmentally friendly practices, which are also attractive to the new generation of green customers.
Wasted food = wasted money
The most important first step is to assess where food wastage is occurring. For example, by monitoring plate wastage, prepared-not-served wastage or inventory management wastage. Once this has been determined, businesses can implement better practices to target these areas. The FoodSave project has worked with a number of operators to successfully achieve greater sustainability, for example:
- A London café that reduced annual food waste by 1.1 tonnes saving over £2000 through a review of portion sizes and food preparation. As a bi-product of smaller portion sizes, the café suggested that customers were more likely to order dessert, thereby increasing sales
- A sushi restaurant that identified prepared-not-served wastage as its biggest source of cost and implemented changes, saving £14,000 a year. Rather than having a lot of prepared food on the sushi train, towards the end of the night the restaurant found it more efficient and economical to make food to order and keep the Maki chef on shift a few hours longer
- A hotel kitchen that cut costs by £7,500 through increasing stock takes and monitoring the fridges more closely to reduce spoilage, as well as using fresh seasonal produce, which keeps for longer.
A small element of food waste is unavoidable, but help is at hand. Specialist food recycling firms claim food disposal costs can be cut by over 40%. Regular collections and food wastage bins save time and space as well as eliminating land-fill charges. The operator can also promote their green credentials through a ‘zero to landfill’ policy. Food waste that is collected can be used to generate renewable energy and nutrient-rich biofertiliser.
Crushing package costs
Potential efficiencies do not stop at food waste. Any recyclable material can be baled, compacted or crushed – the most common being cardboard and soft plastics. Investing in a baler or crusher can save costs long term where space is limited and disposal costs expensive. Unlike bins, which are charged per lift, recyclers will collect baled material. This can generate revenues of up to £65 per tonne for cardboard and more than £200 per tonne for polythene shrink wrap. Such equipment can be rented to avoid up-front investment and will include maintenance support.
Awareness, training and purchasing practices
Engaging with staff is fundamental. Making a food-waste bin distinctive encourages staff to segregate the waste, thereby raising awareness of the issue. Requiring staff to promote the use of doggy bags for customer leftovers will also encourage them to participate in the reduction of food waste. Up-front training in stock management, meat and veg preparation and portion sizing will ensure that the yield from each ingredient is maximised.
Furthermore, an operator’s purchasing strategy can also promote their green credentials. Buying seasonal produce from local suppliers enhances sustainability and can be a promotional tool for the restaurant’s image. Choosing suppliers that provide flexibility of supply, pre-trimmed fresh product to the kitchen’s specification and recyclable packaging can all save storage, labour and disposal costs. There are even businesses that turn recycled plastic bottles into hard-wearing pub and garden furniture – so a pub or restaurant can actually furnish their sites using the recycled outputs from their own operations – thereby completing the sustainability circle.
Clearly there is strong consumer pressure on the sector to embrace sustainable policies. The win/win situation is that these processes can make genuine commercial sense, both in terms of meeting the demands of customers and providing a tangible benefit to the bottom line.
haysmacintyre is a leading Top 30, mid-tier firm of Chartered Accountants and tax advisers in central London, providing advice to hotels, restaurants, pubs, bars and leisure companies ranging from family-run businesses to franchises and international hotel groups. Gareth Ogden is a partner in the expanding hospitality team and manages a portfolio of pubs, restaurants, hotels and private members’ clubs, helping them meet the unique commercial challenges they face as well as compliance requirements.