Five cost management New Year Resolutions kitchens must stick to in 2023
As we move into another unpredictable New Year for the hospitality industry, effective cost management has never been more important. Anything that impacts the bottom line must come under fierce scrutiny, food wastage being the big one.
As we tread carefully into another unpredictable New Year for the hospitality industry, rising costs across the board pose an undeniable threat to businesses battling to keep their heads above water. As such, effective cost management has never been more important and anything that impacts the bottom line must come under fierce scrutiny, food wastage being the big one.
With the Government set to publish more details of its Environmental Improvement plan in January 2023 (source), 2023 needs to be the year of waste transformation. However, recent headlines suggest that many organisations are putting sustainability and wastage on the back burner due to the impact of rising costs.
According to Business & Industry, over the past 18 months many organisations say their main focus has been on protecting staff, stakeholders and customers as they try to remain financially stable during the uncertainty. This has led to the green agenda taking a back seat for many businesses, with 55% of businesses reportedly being forced to pause or cancel investment into sustainability as a result of the pandemic. Likewise, this supports Zupa’s own findings in a recent independent survey of UK restaurants (September 2022), which found that although 100% of respondents considered waste and sustainability to be an issue, 24% admitted wastage was being overlooked in their business.
But are business leaders missing a trick?
Wastage and improved cost management are intrinsically linked. Wasted food is money down the drain, plain and simple. If there is one New Year’s resolution kitchens must stick to this year, it is getting more granular with cost control. That means identifying every possible way that your business leaks cash – and putting processes and systems in place to stop this from happening.
Here are five New Year resolutions to help you to better understand your cost management in more detail this year:
1. Take Stock If you are to reduce wastage and avoid overspend look no further than your stock and inventory management. There is no room for error, the accuracy of stock and assets has to be spot on. Overspending on stock is a common mistake and the ideal way to tie up otherwise free cash. The impact of over-ordering can be considerable in terms of value, depending on the complexity of multiple stock locations and teams. Using a kitchen management system like Caternet, with real time visibility of available stock, will eliminate error when new stock orders are placed.
2. Know the true cost of every plate of food For full control of your spending you need to be able to account for everything that goes in and out of your business – down to the very last ingredient. Everything counts, everything has an impact on the bottom line. Automating your processes will not just give you visibility of stock availability, but will also give you real time insight into the true cost of every plate of food, from a sprinkle of parsley to a squeeze of lemon juice.
3. Review menus and test the financial viability of your dishes Reviewing your menu prices in line with cost increases might also be the perfect time to review the dishes or ingredients themselves. What are your best sellers? These should yield your highest profits - ditch the less popular dishes. Could portion sizes be reduced? Could you use cheaper cuts of meat or incorporate more plant-based recipes? What ingredients could you swap that are less affected by price hikes and would reduce stock and wastage? Using Zupa’s recipe management software, you can create recipes using live priced product information fed by your suppliers and the dishes you create can also be used to forecast, to assess if they are financially viable before you commit.
4. Get even more supplier savvy Building strong supplier relationships matters. Having access to a wide supplier network is vital as is capitalising on technology to ensure you are getting the best prices. It may be that some higher volume items are available at a discount or long-term price lock, or you may want to consider purchasing from smaller and more local businesses if there is financial benefit. Caternet also allows you to centralise agreements, increase transparency with suppliers and continuously review against agreed terms so you can make more informed decisions and eliminate surprises with cost and waste.
5. Embrace technology I predict that 2023 will be the tipping point that will spark adoption of new innovations, technologies and infrastructure across the hospitality industry globally. Few businesses will survive and thrive without investing in the right technology to improve their cost management and reduce waste.
According to Futurist.com it is estimated in 2023 that global waste production will have increased significantly due to increased consumption and population growth. This means that businesses face increased pressure, with limited resource. The focus must be on managing costs, reducing waste and setting clear strategies. Ultimately technology is the facilitator for changes that will shape the future of the industry.
Foodservice teams and restaurant managers have faced unprecedented challenges for the last couple of years while sustaining their businesses with either complete or partial shutdowns. This has made them focus on trying to find innovative ways to meet their customer needs; hence we have all witnessed the emergence of digital solutions that have been saviours to some of the most struggling restaurants and gotten them back on track. [Source: Forbes]
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