Issues surrounding sustainability in the restaurant sector are growing in importance and addressing them swiftly should be part of any business’s long-term strategy, says Jane Stevensen, director of sustainability advisory at Grant Thornton UK LLP
Thanks to the recent exposé on horsemeat replacing beef and the mind-boggling complexity of pan-European supply chains, sustainability and food are making headlines together again. Couple that with pressure on businesses facing soaring energy and raw material costs, mounting regulation, increasing waste management budgets and the lack of growth in the economy resulting in a customer base with less money to spend on luxuries such as eating out, and restaurants have got quite enough on their plates already.
Sustainability and food are global issues; the worldwide food and beverages sector is under considerable pressure to improve the long-term sustainability of its operations. Population growth, economic prosperity in emerging economies, limited opportunities for expansion of agricultural land, declining productivity gains, and growing demand for bio-fuels pose serious challenges to ensuring food security.
But, despite all this, restaurants that have adopted sustainable practices are proving that the feel-good factor this generates also drives cost savings, resulting in a more profitable business, and is a growing priority for a significant number of their customers. The Sustainable Restaurant Association (SRA), a not-for-profit organisation set up to help restaurants become more sustainable through the three focus areas of sourcing, environment and society, is working to support the transition to a sustainable business model for the sector.
The restaurant industry in the UK has a huge impact on the food chain - restaurants account for almost half of what the British spend on food. The adoption of sustainable practices has the potential to dramatically influence the food production system with knock-on effects for the way we both farm and eat.
The business advantages
Key issues the hospitality sector in general faces include sustainable supply, provenance, seasonality, organically produced food, water, waste, portion size, corporate responsibility and community relations - a pretty big agenda for those businesses operating at the smaller end of the spectrum. But when even McDonald’s is seen to be taking sustainability seriously, there must be real business advantages from adopting sustainable practices.
One of its more recent initiatives on producing more sustainable food is the Marine Stewardship Council (MSC) certification of its US supply chain - a signal that the company sources fish from suppliers that follow strict MSC standards for ecosystem impact, management and health of fish stocks. In this case, the fast-food chain is using wild-caught Alaskan pollock for its products.
McDonald’s achieved MSC certification for fish served in its European restaurants in 2011. “When a company such as McDonald’s does this, suppliers around the world are watching, and they will take note,” says Kerry Coughlin, MSC regional director of the Americas. “We do expect this to have an impact.”
A recent survey on sustainable businesses carried out by major UK advisory firm Grant Thornton UK LLP demonstrates how companies in the food and beverages sector, including restaurants, are exposed to reputation and resource scarcity risks. To mitigate these risks and achieve positive brand impacts, they are investing in sustainable supply chain strategies, and focusing on building stronger relationships with key suppliers. And the research highlighted how consumers are taking a much more active interest in the sustainability of food products, with communicating sustainability performance to customers being identified as ‘very important’ to the sector.
A British restaurant success story that has taken sustainability seriously is the Leon Group with a dozen outlets in London. The group focuses on three specific issues: Water - measuring what is used and conserving it. Community engagement - increasing its commitment. Seasonality - improving the use of seasonal produce.
Water in particular is increasingly recognised as a key performance indicator for enhancing a business’s sustainability, while addressing both costs and reputation. Nestlé’s corporate sustainability strategy highlights water as one of its key strands, and at the 2013 City Food Lecture in London last month - one of the UK food sector’s big annual events - Paul Bulcke, Nestlé’s CEO, spoke on water as the linchpin of food security.
This was swiftly followed in the same week by the official launch of the Carbon Trust’s Water Standard; this offers companies the opportunity to not only put in place strategies to cut water use, reduce costs and embed water efficiency throughout their operations, but also enables businesses to gain recognition for water stewardship and enhance their reputation by using the new water standard logo.
What might surprise many restaurant owners is that while 50% of water use is in the kitchen, as much as 35% is in the cloakrooms; according to one government study, a water-efficient toilet can save a full 16% off the water bill. Pret a Manger is another business with sustainability at the very core of its operational ethos; it recently saved in excess of 140,000 litres of water annually by simply installing water hippos in staff and customer toilets.
These devices reduce the amount of water used when the toilet is flushed (and are usually supplied free of charge by the local water authority). The company is also ensuring that all new shops are fitted with the latest water-saving equipment, such as aerated taps, timers on urinals and water-efficient dish washers.
Issues concerning consumers
A recent survey carried out by the SRA on customer concerns revealed that the two top issues for restaurant clientele are health and wellbeing, and food waste. Health and the ticking time bomb of an increasingly obese population cannot be ignored by restaurants; ethical supply combined with better portion control is recognised as a key strategy to address this.
Every year in the UK, a staggering 18 million tonnes of food end up in landfill (annual value £23bn and rising), some 600,000 tonnes of it coming from restaurants. As well as the environmental impact, this is costing restaurants and the people who eat in them a fortune through higher prices and landfill costs in local taxes. The SRA estimates that 30% of food waste comes from diners’ plates; by tackling the problem there is the potential to cut food waste by 20% - that’s a 42,000 tonne reduction in food waste across London alone.
Waste reduction strategies in packaging and related resource use also directly impact the bottom line; food businesses can save between 35% and 40% of their costs for rubbish collection by compacting card and paper waste, sending back packaging to suppliers and bottling their own water to reduce glass waste. Separating out food waste helps to reduce rubbish removal costs, and carefully monitoring internal waste practices generates bargaining power to renegotiate a more cost-effective waste management contract with the local authority.
Pret a Manger’s strategy of combining waste reduction with corporate social responsibility, by operating a fleet of LPG vans that deliver over 12,000 fresh meals to numerous shelters for the homeless in London every week, is helping achieve its target of avoiding landfill at all costs and aids some of the most disadvantaged people in society.
A sustainable restaurant business can improve its cost controls and enhance profitability, addressing energy, carbon, waste, water, health and wellbeing, and community engagement. The result is a better managed, more profitable business, influencing food and farming for the long term, with happier staff and customers who keep coming back for more.
