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3 areas where food service businesses can increase both their sustainability and their margins

Posted by Will Nicholson / 15-Jan-2018

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Our current food system is responsible for 30% of all man-made greenhouse gas emissions1 and 70% of our water demand. Intensive farming methods and food transportation are also a major cause of deforestation2 and pollution, contributing to both terrestrial and marine biodiversity loss. Despite all this damage, one-third of all the food we produce is never actually eaten.

Food demand is predicted to increase globally by 50% before 20503. This is not sustainable.

The good news is that catering businesses can contribute to a more sustainable system without having to change their operations dramatically. Here are three areas where catering can achieve real impact without having to completely redesign the way they operate:

Menu Engineering

A key way to increase sustainability is through how you conceptualise your offering. Small changes in the right places can have a big impact.

For fixed price services, for example, well-balanced recipes with a lower environmental impact can give you a consistent margin increase. The key thing to look at is the comparison between vegetables and meat. Vegetables are normally significantly cheaper than meat, so cooking less meat and more vegetables will save you money while being more sustainable. Your menu does not need to be be totally vegetarian, but a little less meat across the board will have a big impact.

Non-fixed price services, on the other hand, can be a bit more complicated. You need to be creative. Here is a quick example: a street food outlet sells meatball wraps and falafel wraps, priced at £6.50 and £5 respectively. They want to reduce their environmental impact. Although they are aware of the fact that meatballs have a much higher environmental impact, most of their clients prefer eating meatballs. As a result, they remain on the menu. The solution is to offer a “half and half” wrap, consisting of both meatball and falafel, and to price this product closer to the meatball wrap price point. £6, perhaps. This way,  they are creating a dish that both sells well to the more environmentally-conscious meat-eater and earns them more money. If they market this dish well, it is a real win-win scenario (see Sales Mix below).

Production Control

In Norway (where we are based), food waste has rightly been in the spotlight. But I don’t think we can claim the job is done just yet. Food waste is still a reality, and although customers often get the blame for high levels of plate waste, it is not all their fault.

In buffet services, overproduction can be a big driver of food waste. Food establishments often produce a bit too much of everything in order to be on the safe side and keep their clients happy. Reducing this overproduction will have direct and immediate cost benefits for businesses serving buffets.

In restaurants that serve made-to-order, inconsistent portion control (which you could see as the “real-time” equivalent of presenting too much on a buffet) has the same effect. As someone with a background as a chef, I think I can say fairly honestly that portion control in the industry is mixed. Some is good, some not so good. Tightening up here can reduce food waste from customers who could not finish their meal while keeping actual margins more in line with theoretical margins. As with menu engineering, it is often the small and repeatable changes like this that have the highest overall impact.

Sales Mix

This is where the benefits of menu engineering and production control can be multiplied via sustainability-oriented sales. Put simply, if you create a new food concept with dishes that are optimised to be more sustainable and profitable, and if you tighten up your production, then you can multiply your benefits by driving sales towards these lower impact, higher margin dishes.

As a rule of thumb, you should be aiming to introduce menu options in the high sales range that have lower environmental impacts and good margins. The high sales will multiply the benefits.

For example, two vegetarian options on a menu of ten choices is not really going to make a different if the vegetarian options are not particularly high margin and have low sales. You could achieve more by introducing meat dishes with less meat, aimed at meat-eaters who will chose these dishes over the meatier alternatives because they look more attractive. This does not mean we should ignore the vegetarians, but that we should see them as only one part of the sustainable sales mix.

Of course, menu engineering, production control and sales mix areas are interdependent.  I have seen caterers introduce Meatless Mondays but do a bad job of marketing the concept, ending up with a food waste spike on Mondays. By looking at your menus, your sales focus and your production together rather than in isolation, you have a better chance of delivering sustainable food service while earning higher margins.

About the author:

Will Nicholson headshot.jpgWill Nicholson has 15 years of experience in catering as a chef and restaurant owner, having previously worked in IT. He has worked in food sustainability since 2010, and his early work involved the design of a "food footprint" measurement tool as part of his masters degree in Green Economy. Since founding IntoFood, Will has developed a software solution that is used by a wide number of large and small caterers and restaurants. IntoFood provides sustainability reporting in the hospitality industry for menus, sales and procurement, and has recently released a dedicated online learning platform The School of Sustainable Food Service. You can read more about IntoFood at intofood.no

Reference:

  1. Vermeulen, S. J. et al. (2012) Climate Change and Food Systems. Annual Review of Environment and Resources. 37. p.195-222
  2. Kissinger, G., et al. (2012) Drivers of Deforestation and Forest Degradation: A Synthesis Report for REDD+ Policymakers. Lexeme Consulting, Vancouver Canada, August 2012
  3. Alexandratos, N. and J. Bruinsma. (2012) World agriculture towards 2030/2050: the 2012 revision. ESA Working paper No. 12-03. Rome, FAO New Call-to-action

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