New research on behalf of Champions 12.3 finds there is a compelling business case for hotels to reduce the amount of food they throw away. For every $1 hotels invested in programs to reduce kitchen food waste, on average they saved $7 in operating costs.
LeanPath contributed anonymized data on hotel food waste for the study. LeanPath CEO Andrew Shakman and VP of Food Waste Prevention Steve Finn served on the review committee for the report.
In a first-of-its kind analysis for the industry, The Business Case for Reducing Food Loss and Waste: Hotels evaluated financial cost and benefit data for 42 sites – including Sofitel, MGM and more – across 15 countries, finding that nearly every site realized a positive return on its investment to reduce food waste. Within just one year, the hotels had 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.
The types of investments hotels made include: measuring and monitoring the amount of food wasted, some with LeanPath tools; 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, which was less than 1 percent of sales on average. This shows that the cost of change was low and the benefits were high for all businesses assessed.
The 7:1 return on investment comes from buying less food and thereby reducing purchase costs, increasing revenue from new menu items developed from leftovers or foods previously considered “scraps,” and 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.”
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.
“When LeanPath began working in hotels 13 years ago we were shocked at the amount of food waste we encountered,” says Shakman. “It was a problem with a clear solution and a tremendous opportunity. Nonetheless, the industry struggled to make it a priority for many years. But that’s now changing, and the WRI report shows clearly that fighting hotel food waste isn’t just the right thing to do, it’s simply smart business.”
"In this report, WRI gets even more granular, providing further evidence that investments in food waste prevention have a clear financial payback," says Finn. "Food is an incredibly precious resource. By tracking and measuring waste in operations, responsible organizations gain insights enabling them to make changes that save money, benefit the environment, and inspire employees."
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), which LeanPath also contributed to, 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.