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How Modern Restaurant Technology Reduces Food Waste and Boosts Profits

How Modern Restaurant Technology Reduces Food Waste and Boosts Profits

Picture of Clarissa Buch Zilberman

Clarissa Buch Zilberman

Explore tips to reduce food waste and boost the bottom line, and learn how the right restaurant management platform can help. 

Restaurants across America generate more than 11 million tons of food waste annually, costing over $25 billion. At the same time, up to 10% of food purchased by restaurants is wasted before reaching guests. Of the food that makes it onto someone’s plate, nearly 20% goes uneaten, while 55% of edible leftovers are abandoned at the table. 

Though this presents a significant challenge, it also offers a massive opportunity for restaurant owners and operators to make a positive change.  

Working to eliminate food waste is not just an eco-friendly initiative. It’s also a smart business strategy. By adopting sustainable practices and leveraging modern technology, operators can easily reduce food waste, lower costs, and enhance profitability — at the same time.

The proof is in the numbers: Restaurant365’s food saving features helped restaurants cut their food waste by an estimated $318 million in 2023, equating to approximately 1.2% of total food sales. 

From inventory management to actual vs. theoretical reporting, explore tips to reduce food waste and boost the bottom line, and learn how the right restaurant management platform can help. 

The role of technology in reducing food waste 

Modern technology plays a pivotal role in addressing food waste in the restaurant industry, helping owners streamline operations, optimize ingredient usage, and reduce waste. Here’s how: 

Analyze how much food waste your restaurant generates

To successfully reduce and eliminate food waste, it’s first important to know where your restaurant stands. At a minimum, waste should be documented in the manager log, providing a basic record of inventory and recipe items that are discarded.

However, to gain a more accurate and actionable insight into waste patterns, utilize specialized software that includes a waste transaction screen. This feature allows users to enter detailed information about wasted items, whether they are ingredients or prepared dishes, offering a comprehensive view of where waste occurs.   

Advanced waste tracking software not only provides visibility into waste but also supports broader efforts to enhance operational efficiency and sustainability. By regularly reviewing waste data and variance reports, restaurant managers can make informed decisions that optimize inventory usage and minimize costs.  

Demonstrating a commitment to waste reduction can improve your restaurant’s reputation among eco-conscious customers as well, driving loyalty and enhancing your business’ appeal.  


What is the Average Profit Margin for a Restaurant?

Examine your actual vs. theoretical food cost variance

One of the best strategies for addressing food waste in your restaurant is to closely examine your actual vs. theoretical (AvT) food cost variance. This metric compares the amount you should have spent on food, based on your sales, to the amount you actually spent. The difference between these two figures represents food waste, which could be due to various factors such as kitchen portioning errors, prep mistakes, server errors, or other operational inefficiencies.   

By analyzing AvT food cost variance, you gain a clear picture of where your biggest food waste issues lie. Start by identifying the items with the largest variance. These are the areas where your theoretical costs (what should have been spent) and actual costs (what was spent) diverge the most. Investigate the usage of these high-variance items to uncover the root causes of waste. This might involve reviewing portion sizes, evaluating preparation methods, or assessing how servers handle and deliver food.   

Once you’ve identified the main contributors to your food waste, you can implement targeted measures to address these issues. As you begin to reduce waste for the items with the largest variance, you will likely see a significant improvement in your overall food cost efficiency.  

After making progress with the most problematic items, continue working down the list to tackle smaller variances. This systematic approach ensures that you gradually minimize waste across all aspects of your inventory, leading to better cost control and a more sustainable operation.  

Optimize your inventory management

Effective inventory management is essential for minimizing food waste. Beyond simply counting items on the shelves, it involves understanding how inventory levels impact your profit margins and potential food waste. 

To achieve an accurate inventory picture, it’s crucial to compare theoretical inventory — based on POS data — with the actual inventory on your shelves. This includes sales and transactions through an integrated POS system, but it also accounts for other potential areas of loss, including vendor delivery errors, spoilage, or improper preparation. 

Advanced inventory management solutions enable you to calculate the variance between these figures in real time. This variance highlights discrepancies, showing what inventory is being sold versus what is unaccounted for, potentially indicating waste or loss. By identifying these gaps, you can take proactive steps to reduce waste, optimize ordering, and improve overall operational efficiency, ultimately boosting your bottom line. 

Forecast with precision

Ordering too much inventory can lead to significant food waste and negatively impact the quality of dishes served. When ingredients are stored for too long, they can spoil or lose their peak freshness. To combat this, it’s crucial to provide managers with the right tools to accurately project sales levels and determine the exact inventory required to meet demand without excess. 

Advanced forecasting tools use historical sales data from comparable time periods to predict future demand with accuracy. By analyzing past performance, these tools can identify trends and patterns that help managers make informed, data-driven purchasing decisions.

This proactive approach ensures that your inventory levels are optimized, reducing the risk of overordering and minimizing food waste. Not only does this preserve the quality and freshness of your dishes, but it also cuts down on unnecessary costs associated with spoiled or unused ingredients.   

By aligning inventory orders with actual customer demand, you can streamline your supply chain, reduce storage costs, and improve the overall dining experience. Managers can focus on maintaining a well-stocked kitchen that is prepared to deliver high-quality meals consistently, rather than dealing with the repercussions of overstocking or running out of key ingredients. In turn, this leads to happier guests, reduced waste, and increased profitability, creating a more sustainable and successful restaurant operation. 

Engineer your menu for success

Another effective strategy to reduce food waste is to use menu engineering tools to optimize your menu. By creating a slimmer, more focused menu, you can streamline your inventory and reduce the number of perishable items that might otherwise go to waste.

Offering fewer menu items allows for more efficient use of ingredients, as you can incorporate the same items across multiple dishes. This approach not only helps in running through inventory faster but also ensures a good inventory turnover rate, keeping ingredients fresh and reducing the likelihood of spoilage.    

You can also consider providing different portion sizes, such as smaller or half-size portions, to cater to varying appetites and reduce the amount of food left uneaten. Additionally, making certain side dishes optional, like bread or chips, can prevent these items from automatically being served and potentially going to waste if not desired by guests. 

After modifying your existing menu items, look at your kitchen scraps. Are there any new, creative dishes you can add to the menu that can help reduce your food waste?  

Using every part of an ingredient, otherwise known as taking a “nose to tail” or “root to stalk” approach, takes a bit of creativity, but the effort can be worth it. If you have surplus ingredients or fruits and vegetables that are imperfect or unusual, see if you can modify existing menu items or come up with new recipes.  

Adding a daily special or appetizer can also help your staff make the most out of all food ingredients. Brainstorming as a team can be a great way to get your team involved and feel ownership in the process.  

Reducing waste and boosting profits 

Reducing food waste and increasing profitability are inextricably linked. Restaurant365’s advanced food saving features have transformed the way restaurants manage their operations. On average, operators saw a reduction in food waste by 1.2% of total food sales, which amounted to approximately $318 million saved in 2023 alone.   

By integrating systems for inventory management, sales forecasting, and waste tracking, restaurant owners and managers can finely tune their food usage, cut unnecessary expenses, and enhance their bottom line. 

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