From fast food to fine dining, restaurants today operate in one of the most highly competitive environments. With higher than average resource use and lower than average profit margins, restaurants can turn to sustainable operations as a solution—and a differentiator—leading to increased efficiency and reduced operating costs.
What challenges are restaurants facing today?
From hole-in-the-wall delis to quick-serve chains to 5-star steakhouses, restaurant operators face many of the same challenges: long operating hours, high employee turnover, intense competition, and higher food, wage, and utility costs. Not only are profit margins tight, but restaurants use up to four times more energy than other commercial buildings—and unfortunately much of that is wasted. Nearly 80 percent of the $10 billion annual energy bill for the commercial food sector is attributed to inefficient food cooking, holding, and storage. Water and waste are also significant concerns: restaurants use 5,800 gallons of water every single day and create 5,400 pounds of waste each week, mostly food, making restaurants a target of local water and waste regulations.
What restaurant trends support the sustainability transformation?
- Services like Uber Eats and GrubHub are transforming the typical customer experience. To cater to the delivery crowd, the future may see restaurants expanding their kitchen areas and reducing the size of dining rooms and staff, which will only increase the resource consumption per location.
- Increasing waste regulations are driving restaurants to meet strict composting and recycling requirements in several localities worldwide. Where available, progressive restaurants are taking advantage of composting programs and recycling rebates, gaining cost savings and brand recognition.
- Rising food and wage costs are leading to increased focus on cutting operational costs. While there’s a desire to implement low-cost programs through training, the revolving door of employees (can be more than 120% turnover each year) makes employee engagement a challenge. As such, companies are looking to equipment upgrade projects to implement automation to overcome the “human factor."
- Water use in restaurants accounts for about 15 percent of the total water use in the U.S. alone and the costs of water and wastewater services have risen at a rate higher than the consumer price index. Implementing water-efficient practices, like more efficient faucets, irrigation systems, and dishwashers, could decrease water costs by 15 percent.
What should restaurants be thinking about?
Some of the following actions can help restaurants address current trends and external pressures while maximizing savings and resource efficiency.
- Establish a sustainability strategy and ensure consistent adoption. Effective initiatives are established from the top down. If corporate staff is not available to analyze consumption data, find a third party for AP, finance and project support services.
- Build a case for sustainability and resource management. Benchmarking consumption and costs gives visibility to how sites use resources. It can also help prioritize spend for energy and water projects, measure impact, and ensures the greatest ROI. Researching available utility rebates and incentives for efficiency projects can also offset costs.
- Remove reliance on human responsibility. While behavioral changes can help your business conserve resources, high turnover makes consistency difficult. Capital projects, such as more efficient equipment, can deliver use and cost savings consistently over time on the demand side, while on the supply side, negotiated rates along with a mix of green and brown power and RECs can optimize energy spend.
- Keep up with regulations. Be aware of and understand the financial and operational impacts of federal, state and local regulations on water and waste, which can be challenging across a broad portfolio.
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