ATLANTA — Forty percent of the United States’ food supply goes uneaten every year, the single greatest source of solid waste in the country, according to the National Resources Defense Council. That’s about $165 billion of uneaten and unsold food each year.
Despite its negative perception, however, food waste is crucial in running a successful retail foodservice program. If an operator uses their entire food supply every day without waste, that means they are budgeting their program incorrectly, said Kay Segal, senior partner in food and beverage consultancy Business Accelerator Team, Scottsdale, Ariz., during the session Curbing Food Waste: Effectively Managing Your Inventory, at the 2019 NACS Show in Atlanta, held Oct. 1-4.
“Waste is needed for success in foodservice and should vary by store,” she said. “A store that has $1,000 in sales will have different waste margins compared to a store that has $100,000 in sales. Tracking units and equating to what percent of sales waste will be will help you get ahead.”
Here are five ways to manage food waste—as well as foodservice accounting, inventory and profits—in convenience stores …
Boost the bottom line
C-store retailers should shoot for a foodservice bottom line of 15% to 25%, Segal said. This can be achieved through a variety of ways, including having effective foodservice marketing and digital promotions as well as dividing cost percentages in different foodservice departments.
“Blended food costs should be around 35% to 50%,” she said. “Labor for made-to-order items should be less than 25%; labor for grab-and-go should be less than 10%; and spoilage and waste should be less than 15%.”
Know the cost of everything
Tracking the cost of every component of each dish is crucial to a profitable foodservice program, said Neil Doherty, senior director of culinary development for Sysco Corp., Houston. He suggested retailers make a theoretical gross-profit list before they bring in new items. For instance, if an operator is implementing a new fried chicken program, they should break down the total cost for the chicken, breading, biscuits, butter, sauces, trays, napkins, frying oil and more, he said.
“If you want to be in the foodservice business, you cannot check your inventory enough,” Doherty said. “You must know the unit cost of every component. You must know what your spending and know your percentages. Every piece matters.”
Address the profit problem
Underreported sales are the top reason why many retailers don’t hit their forecasted foodservice profit margins, Doherty said. Others include employees giving away product for free; unrecorded waste; employees not ringing up items on the proper key; and employees not ringing up sales at all.
Talk to employees
Retailers may benefit from talking to their employees when foodservice profit margins aren’t being met, Doherty said. Some questions he suggests operators ask their team members:
- What do you think is causing loss?
- Have you seen or heard other employees ringing up products incorrectly?
- Do you know how to ring up food sales correctly?
Set realistic expectations
Patience is key when building a foodservice program, said Chris Postlewaite, senior director of food and beverages for CEFCO, Temple, Texas. He advised retailers to stick with their program for a minimum of two to three months even if it’s struggling at first. Beyond that, it’s also important for retailers to set themselves up for success by not comparing themselves to others, he said.
“Set realistic expectations for your program,” Postlewaite said. “You can’t be Buc-ee’s on day one.”