Report: Food-waste reduction programs save money

NATIONAL REPORT—According to the Food and Agriculture Organization of the United Nations, approximately one-third of the food produced in the world for human consumption every year gets lost or wasted, which amounts to economic losses of $940 billion per year.

However, a new report from the Champions 12.3 coalition, “The Business Case for Reducing Food Loss and Waste: Hotels,” found that for every $1 hotels invested in programs to reduce kitchen food waste, on average they saved $7 in operating costs over a three-year time frame.

This hotel-specific report is a supplement to 2017’s “The Business Case for Reducing Food Loss and Waste,” which analyzed the financial impacts of historical food loss and waste reduction efforts across different types of businesses.

Champions 12.3 is a coalition 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 the United Nations’ Sustainable Development Goals (SDG) Target 12.3. This 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.

“Food waste has become a widely discussed topic, and the role of businesses in causing food waste and helping to address it is important to understand,” said Liz Goodwin, senior fellow and director, food loss and waste at World Resources Institute, and a member of the coalition. “Once we had done the initial report covering all sectors, we received a number of requests to look at specific sectors and to make the results more relevant and applicable for them. The original report included such a wide range of financial benefits that many sectors wanted to know more about specific actions their peers are taking and the kinds of results they are seeing. This sort of financial analysis is really first of its kind, as it breaks down costs and benefits directly attributable to food waste reduction and can help dispel many of the myths that business leaders may believe because they don’t yet have the full picture.”

She continued, “This is the first of three sector-specific papers, which highlight different approaches to reducing food loss and waste. These new reports will help managers overcome internal resistance and skepticism.”

The hotel sector report analyzed data of pre-consumer waste from 42 hotel sites in 15 countries, including Sofitel and MGM properties. It also found that within the first year of implementing a food-waste reduction program, more than 70% of the sites recouped their investment; within two years of implementing a program, 95% recouped their investment; and by reducing food waste, the average site saved over four cents on every dollar of cost of goods sold (COGS).

“We gathered data from all sites for which data was available. We didn’t make decisions about which to include, but rather included everything we could gather with reliable data,” said Goodwin. “We then interviewed hotels that had particularly impressive results or innovative approaches to reducing food waste. Extensive interviews were also conducted with companies that help measure food waste like LeanPath and Winnow. This helped identify best practices across market segments.”

The report revealed five key strategies for achieving waste reduction: measure the food waste; engage staff; rethink the buffet; reduce food overproduction; and repurpose excess food.

Goodwin pointed out that quantifying food waste generated an inventory that enabled sites to identify how much and where food was being wasted. “Such an inventory then helped managers prioritize hot spots to tackle and to monitor progress over time,” she said. “All of the surveyed sites used smart scales to measure their waste.”

The report noted that research conducted by World Wildlife Fund and the American Hotel and Lodging Association (AHLA) indicates that more than 90% of staff want to reduce food waste. “According to interviewees, staff engagement was a key variable that determined the success of a food-waste reduction program among the surveyed sites,” said Goodwin. “Kitchen and service staff often want to help prevent food waste, but need more guidance from leadership. This guidance could come in the form of daily staff meetings, casual conversations, formal training, or even establishing peer-learning opportunities. Management should also work to remove any staff perception of blame for causing waste.”

With regard to the buffet, it should be no surprise that they tend to be a large source of food waste, especially of high-value foods like meats. “Successful strategies for reducing buffet waste included reorganizing the placement of certain food items, such as providing individual servings rather than pans of food; displaying messaging about food waste near the buffet; and offering high-value items à la carte,” said Goodwin. “Many hotels were able to significantly reduce their food waste by implementing very simple changes, such as providing smaller plates for customers or selling leftovers from the buffet later in the day.”

The surveys found that many sites had at least one menu item that was consistently under-consumed. “By simply producing smaller quantities of such items, sites were able to prevent waste without negatively affecting customer experience,” noted Goodwin. “Many sites also became more diligent about a meal’s potential head count, which allowed kitchen staff and management to better forecast needs and reduce unnecessary overproduction. While head-count accuracy may already be a goal for many sites, placing food waste reduction higher on the agenda of staff resulted in added emphasis on more accurate head counts.”

Moreover, excess food should be repurposed. “Because forecasting customer demand is not a perfect science, hotel kitchens will find themselves with leftovers and potential waste. In these cases, having a Plan B for how to safely repurpose leftovers can allow the kitchen to generate revenue from this potential waste,” said Goodwin. “For example, unsold or leftover meat from breakfast may be a potential ingredient for a lunch or dinner dish. Sites that incorporated food scraps—peels, seeds, skins, bones, etc.—into dishes were able to produce value from items that typically go straight to the waste bin. While this analysis does not include any potential financial benefit from food donation, the authors urge hotels to donate any edible, unsalable food to charity, rather than throwing it away.”

For Goodwin, reducing food loss and waste is a no-brainer. “It’s good for people, planet and pocketbooks,” she said. “Wasting food is a waste of money, and has environmental impacts—including greenhouse gas emissions, waste and land use—and social impacts.” HB