From farmers to restaurants, the food industry sits in a position to address a number of the UN Sustainable Development Goals. Naturally, Zero Hunger hits closest to home. Much innovation in the industry, however, surrounds approaches to how to introduce Responsible Production and Consumption into the value chain. Indeed, about one third of the food on the planet goes to waste. If we are able to more efficiently produce and consume food we would fare much better in combating climate change. Many companies are already attempting to address these goals.
Companies like Food Cowboy and FoodCloud seek to optimize the use of food waste by connecting producers and charities in the US and Ireland, respectively. These companies hope that food that is identified as “unattractive” will have the chance to feed people in need. These solutions have seen some success; however, perhaps they focus too much on their non-profit approach to be seen as viable business models.
Another approach to food waste is to repurpose the inedible byproduct of food processing. For example, Bio Bean, located in the UK, is taking waste from coffee grounds and using them to create biofuel in the form of logs and pellets. Bio Bean is attempting to close the loop on a circular economy by appending itself to the end of the cycle. This innovative approach has seen some success but faces a strong challenge in scaling and providing a solution with industrial capabilities.
A New Approach to Saving Restaurant Food Wastage
To save waste and increase profits, restaurants can require their diners to order ahead of time. To drive further positive environmental effects and help their bottom line, restaurants can require pre-orders on a limited selection of prix-fixe menu items.
In business-model innovation terms, this model would seize the benefits of resequencing and focus.
Most obviously, requiring orders ahead of time will allow restaurants to solve problems around supply and demand. By receiving customer demand in advance, restaurants can place more accurate orders from suppliers and prepare just the right amount of food for diners. There will be no excess inventory held to account for the variability that occurs when diners appear and order a la carte. Indeed, this mismatch of supply and demand stemming from the uncertainty of what diners will order on any given day accounts for much of the waste in the food industry.
For no-show diners, restaurants can partner with nearby homeless shelters, food pantries or community groups to make sure that in the rare event there are excess meals, these reach hungry people nearby.
Risks, Rewards & Mitigation
Clearly part of the appeal of the dining experience comes from arriving at a restaurant and having the staff meet your whims. Dining out is a spontaneous and indulgent experience. Requiring diners to order ahead of time could imperil this critical aspect of the restaurant experience.
But that doesn’t mean spontaneous ordering offers the best experience to diners. Ordering in advance can build anticipation. Anticipation adds to the specialness of the dining-out experience. The meal itself becomes something you are looking forward for days.
Also, since restaurants are saving money on waste — and through the prix-fixe model, getting better leverage with suppliers through focus — they can also charge diners a lower price. These pre-order restaurants could even unlock a Blue Ocean opportunity for quality restaurants by reaching diners with less money who were previously priced out.
In order to mitigate these risks, next steps would firstly be to establish a marketing strategy model that would sell the value of building anticipation and eating sustainably.
Secondly restaurants should look into the economics of how much money can be saved by adopting this model so that business can understand how much value can be gained either through passing this through to the bottom line, or through price reductions and therefore value created for the consumer. Solutions can even be more creative than this; some businesses should consider if they are interested to find other ways to tempt diners to pre-order, for example, by offering additional promotions or exclusive add-ons for participation.
Of course there are no identifiable negative impacts on the environment of such a business model. By definition each diner that moves to this new model will in fact be benefiting the environment. The only social risks from the model is that it may detract from the experiential side of dining out: restaurants might become full of diners on their smartphones checking what they ordered, complaining about differences in the app versus reality etc. These risks are small however (and also are arguably a wider reflection on society as a whole!) and in fact the benefit of moving to pre-ordering is that one can promote that the elimination of the administration part of eating out (by getting it done before arrival) will in fact increase the social interaction of groups.
— Oli Field-Johnson, Sasa Hermoso, Trey Peacock, Leticia Rubira Posse de Rioboo, Zeke Turner
Interesting read. I wonder if there are other food byproducts (aside from coffee beans) that can be turned into alternative sources of energy. Re-sequencing by requiring customers to pre-order is a good method and for a lot of eco-minded consumers, or for the “planners” etc., I think this is achievable. There have been times where I go to dinner and we take forever to order food and my patience wears thin while my hunger escalates that I wish we could pre-order at a restaurant!! I would be an early adopter for this model 🙂