Sustainability credentials are rapidly moving from being a defining feature of a brand to a basic expectation of the consumer. As operators increasingly seek to incorporate responsible policies into their business models, Georgi Gyton looks at what impact this is having on the bottom line.
As consumers’ expectations around sustainability evolve, operators are under increasing pressure to do their bit for the environment. Many credit the tipping point to a particular episode of the BBC’s Blue Planet II last November, in which footage was shown of sea life tangled in plastic netting and floating carrier bags in far-flung parts of the ocean, causing consumers to demand action.
This shift was highlighted in the MCA Menu & Foods Report 2018, which identified responsible consumption as an overarching growth trend in the eating-out market.
Arguably, the most popular move by operators in the eating and drinking-out sector has been to remove plastic straws and replace them with biodegradable alternatives. Plastic cutlery is also feeling the heat, as are stirrers and single-use cups.
But while switching knives, forks and straws to biodegradable options, and offering discounts to customers who use reusable cups, is enviable from a CSR perspective, how hard does it hit the bottom line, how do businesses budget for sustainable initiatives, and do the benefits outweigh any extra costs?
Nicola Romeo, head of procurement at the Deltic Group, says that while environmentally-friendly options can be more costly, “this cost is reducing as more organisations come on board, driving demand”.
And higher cost per item doesn’t necessarily mean operators are hit with higher costs overall, she says. If bars and restaurants stop offering straws as standard then far fewer will be used. “The new PLA straws we buy are more expensive than mass-produced plastic straws but the reduced consumption minimises the overall impact to the cost base. We should get to a position where we are close to cost-neutral.”
Recycling waste is also generally cheaper than disposing of it in general waste, she says. “The cost of collection increases year on year whereas recycling remains relatively stable so it’s a no-brainer for us to encourage recycling where possible.”
The Alchemist stopped using plastic straws more than 12 months ago – probably the most tangible environmental initiative it has rolled out, says managing director Simon Potts. While they still serve straws in some drinks, like frozen margaritas, they aren’t given as standard. When they are used, they are biodegradable compostable options. “They are three times more expensive in terms of price per unit – a significant step up on costs.”
But while there is a cost implication from taking these types of decisions, “the trade-off for me is that I want to be running a business that has those values at heart”. Palatine, the private equity group backing The Alchemist, “has been banging the drum about environmental, socio economic and governance values since we signed up with them,” so in a way the business is also pushed along by the expectations and values of its investor.
That said, Potts strongly believes implementing more sustainable practices is important not just to The Alchemist’s customers, but staff too. “It is particularly important to the age and demographic of people coming to work as bar or kitchen staff – they are of a generation that want to help save the planet, and those sustainability credentials are really important,” says Potts. “I think working for a group that has aspirations and ambitions to achieve those targets on sustainability is a fundamental reason why people come to work for us.”
However, it is not all about securing buy-in. Andrew Stephen, chief executive of the Sustainable Restaurant Association (SRA), admits that eliminating single-use plastics can be “an entrenched and complex challenge for businesses, which requires a real system change and coordination from product to disposal”.
He says a knee-jerk reaction can prove costly for businesses so sourcing advice beforehand is important. However, by reversing the default policy of providing a straw with every drink, operators have simultaneously reduced costs and removed a major contributor to the waste stream. “It also means that for those occasions when a straw is essential they can afford to purchase a more sustainable option which for the moment costs more. As more businesses move towards these alternatives the price will drop,” he adds.
Of course, it is not only about straws but also improvements to back-end systems, such as energy efficiency, recycling and water usage. Bar operator Darwin & Wallace has its bread delivered in reusable trays, “so we don’t generate 15 cupboard boxes a day,” says founder and MD Mel Marriott. It asks other suppliers to unload products from packaging on arrival, so it can be taken back and reused. It has excess oil removed so it can be used to generate biofuel, and separates out all waste so it can be recycled. It even has its own honey-producing beehives on the roof of its Clapham site, and has turned unusable outside spaces into urban gardens.
The Alchemist introduced a food separation scheme a couple of months ago, and is currently looking more at ‘building function’, including things like heat recovery systems, says Potts. “For example, a heating system that sits over the fryer then heats the water – it’s about closing the loop in terms of energy use.” It has also introduced new taps behind the bar in order to cut down on water usage. “These things have quite a significant upfront capital cost, but you would be looking to offset that in terms of more efficient energy management.”
While there can be logistical challenges from introducing new ways of working, Potts believes the costs are outweighed by the benefits. For those looking to take steps in this area, Marriott says simple changes can be made in a number of ways. For a while now it has been using wonky veg, including wonky lemons behind the bar. Not only is it cheaper but it helps to reduce food waste, she says. “Engage with suppliers and the people you work with and look at how you can work to make positive changes around delivery and packaging. A simple change like not using cardboard boxes, but stackable reusable trays is really beneficial,” adds Marriott. And don’t feel like you have to go it alone. “Engage with the SRA, and look at best practice,” she says.
There is huge potential for operators to market their positive action on plastic, and other sustainability issues, adds Stephen, as “only 17% of diners are satisfied with the environmental impact of restaurants they eat in”. It is hard to believe the trend for sustainability will do anything but grow – operators need to adapt to the new normal.