Waste. It is perfectly named, because it’s a waste. Every ounce of waste in your business from food stuffs to over pours and spillages comes at a cost. While it would be unrealistic to eliminate all waste in the business, it’s significantly worth your while to find and address areas of waste. Waste can also often be like playing a game of Whack-A-Mole, once you have one area under control, another one pops up!
Ultimately waste increases your cost of goods, so you want it as low as possible. Here are the key areas and tips to reduce waste:
Menu design – do your recipes call for a too diverse list of ingredients or too many specialized sauces that you can’t move?
Over-prepping/thawing – are your par levels for your prep and freezer pulls tight enough? If you are prepping or thawing more of something than you can use before it expires, you are just throwing that product, literally, in the trash. (NEVER consider extending product past its shelf life because you are afraid of waste – serving product that can get people sick is going to be much more trouble than over-prep.) If a product sells out, that’s OK. Its better to have a sold out dish than wasted profit.
Over-ordering – ordering product well can be tough, especially if you spread the responsibility for it amongst several managers; the key to ordering well is to have set pars, make sure to forecast your sales and needs, be cautious of deals from your vendors (yes, it may be cheaper to get a whole case, but if you throw half the case away, you lost money), and keep following up. By instilling an ordering system such as the one I have designed, you can significantly minimize wastage and set par levels suited to your business that anyone can follow.
Product quality – loss in quality typically comes through produce; you need to have a consistent check-in process when your produce is delivered and a good relationship with the vendor. Once you accept sub-par produce, you are likely going to waste it when it rots. By doing this you are also setting a precedent that it’s OK for the vendor to offload rubbish to you as no one checks it. Be stringent and if something slips by be sure to hold the vendor accountable over the phone.
Mistakes – mistakes are going to happen, but can be minimized through constant training and education. Everything takes effort and constant monitoring here but with diligence comes profit. By using your teams strengths and making them accountable can go a long way to making this happen. Read my accountability blog for more.
Adherence to recipes – similar to mistakes, but harder to spot is adherence to recipes. Does a drink from the bar call for 2 ounces of strawberries, but one of your bartenders consistently uses 3 ounces? Do your salads call for 7 ounces of lettuce, but they often go out with 9? Waste. It’s small, but it adds up. Address recipe adherence by putting tools in place in advance (correct size ladles, scoops, etc.) and make observations throughout the shift. This above all else lets the staff know that you are watching and that nothing get by!!
Pack size – work with your vendors to ensure you’re purchasing product in pack sizes that you can use before their expiration. Don’t forget about the bar – if you really want to carry a particular beer, for example, but don’t have the sales to sell a full keg before its expiration, you may be better off bringing it in bottles or cans, or not at all.
Theft – this one is an obvious no-no, but not always as easy to spot. Consider where you store items and how accessible they are to sticky fingers. Also consider how desirable the item is (napkins may not be as tempting as wine).
Returned items – you are going to have customers send food back that isn’t really a mistake, but they just don’t like it; track these because ultimately they impact your inventory and if there’s a pattern, you may need to address a recipe.
One-offs (promotions) – when considering special events or recipes, keep waste in mind. The events and recipes are great for variety in the restaurant, but don’t get yourself stuck with product you can’t use. For example, having a killer Candy Cane martini might be great for the Christmas season, but if the pack size on the syrup is too big, you’ll be left with product that will be essentially worthless on January 1st.
It’s ok to run out! – by selling out of a items on the menu you are forcing other products to move reducing potential waste issues. This is good practice in a business that closes over the weekend or has 2 days/ 3 days down time due to season. Having the other products move creates turnover of lesser products therefore lowering your food cost and driving bottom line numbers and ultimately profit for the business.
You should have a system in place to track your waste. Not only to keep your inventory and P&L tracking straight, but this will allow you to identify trends and address them quickly. This may mean having a waste sheet in the kitchen and bar for staff to track anything. Track and analyze (but to get good data here, make sure that the staff know it’s ok to make mistakes, otherwise it won’t get logged and you won’t know about it).
See the chapters on Cost Analysis and Specials in How to Manage a Successful Restaurant for additional tips on managing costs in your business.
Story
A colleague of mine once recited this to me when we were planning and event.
A large restaurant chain decided to have an event day with a one-day-only recipe to increase sales on historically one of the slowest Tuesdays of the year. The innovation team came up with a great recipe and marketing came up with fun ways to promote it. The day itself was a smashing success.
But the following week, the restaurant GMs started to reach out, asking what they should do with the sauce they had to purchase for the item. There was significant left-over in the restaurant and no other recipes called for it. The finance team ran an analysis and a promotion that, excluding waste, was a hands-down success increasing sales by over 20% in most locations, would be considered a loss if they had to write off all the sauce that had been unused.
The marketing and innovation teams scrambled and were able to get a menu item in place before the sauce expired, saving the profitability from the event day. The next year, the same promotion was run, but the pack size on the sauce was reduced and the backup plan was already in place to ensure that the sauce would be used in the next 8 week promotion, allowing the restaurants time to use through it.
The bottom line: always manage your wastage. If you do not it can and will undermine your ability to run a successful and profitable restaurant.
