Innovation is playing a key role in reducing food waste in various industries, but especially in hospitality. In this article, we are going to look into how food waste affects the overall performance of hospitality companies, and how adopting innovative sustainable practices can not only reduce budget inefficiencies but also increase business opportunities in the mid to long term.
Food production is at an all-time high, with over 11.82 Bn tonnes of food produced every year. However, food insecurity and food waste have caused over 690 M people worldwide to suffer from undernourishment. While several national policies and international initiatives have taken place to tackle this situation, it has become more evident in the past decade that involving the private sector is key to achieving meaningful and scaled results.
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There are many industries, including Agtech, Logistics, or Retail, involved in the various stages of food production, treatment, transportation, selling, preparation, and serving. Hence, it would require titanic efforts to try to analyze and propose actionable solutions at every milestone food goes through. For this reason, this article will look into just one specific piece of this puzzle: the role of the hospitality industry in reducing food waste.
Tackling food waste in the hospitality industry: Why now?
The hospitality industry, along with travel, were (and continue to be) two of the clearest victims of the COVID-19 crisis. Occupancy rates hit rock bottom throughout the first half of 2020. While some sort of recovery was achieved as vaccination campaigns started, 2021 has yet to present the acute improvement that everyone was expecting. For the industry, as of right now, there is still a global lack of movement from both domestic and international visitors.
Faced with this situation, the travel and hospitality industry has been forced to make difficult decisions to ensure long-term survival. Most of these measures can be classified within two main priorities:
- Reducing costs
- Finding and fostering, to the extent possible, new or existing revenue streams, to keep their budgets afloat
We believe that by tackling food waste, the hospitality industry will be able to achieve great results on both fronts. Here is why:
Between 8% to 20% of total food cost comes from mismanagement (i.e. overproduction, cooking mistakes, leftovers, etc.). By introducing solutions that reduce the possibility of mismanagement, the Food & Drink (F&D) department, which usually represents a quarter of a hotels’ total revenue, could improve its share even more.
Wet waste taxes
Many countries, such as South Korea, Australia, or the U.S. have imposed wet waste taxes on the private sector to tackle overall waste generation. This means that, in addition to the direct economic loss that represents non-consumed or left-over food, there is an additional cost in the form of taxes for waste disposal, impositions to recycle, and others. In other words, we’re about to see a progressive increase in financial pressure for the hospitality industry, among others, to find a solution as soon as possible.
Improving brand perception
Tackling food waste can also mean increasing one’s hotel occupancy and long-term guest loyalty towards a hospitality brand. This third point might not seem as evident as the previous two, but it is nonetheless key for the short and mid-term recovery of the industry. Deloitte reported in a recent study that 43% of respondents would rather choose a brand with sustainable practices and values. In the hospitality industry, this is an even stronger preference, with a report from Booking revealing that over 81% of travelers are to stay in a sustainable accommodation in the upcoming year. It is evident that, by committing to responsible and sustainable practices, hospitality companies could improve their brand reputation and become more attractive than their competitors.
Now that it is clear why the hospitality industry needs to do something about food waste, the next step is to find ways to reduce it. At Plug and Play, we believe that innovation is at the core of any industry advance, hence, we have listed some of the most disruptive solutions in the market that have been helping hospitality brands become more sustainable in recent years.
Startups Helping the Hospitality Industry Manage their Food Waste
Optimizing kitchen operations to reduce waste:
Winnow, headquartered in the United Kingdom, works with hospitality teams all around the world to help them measure which items end up becoming food waste, and in which volumes. Their image recognition technology and smart weighing technology validate each food hitting the bin, and provide insights that help hospitality companies save up to 8% on food costs.
Winnow has raised over $21.8M, the latest round being a $12M Series B in late 2019.
The Perfect Company
The Perfect Company is a Canadian SaaS company that aims at easing kitchen staff into optimized food prepping and cooking practices. The platform tracks all the steps for expert food prepping and cooking (reducing, among other things, training investment), and increases productivity by establishing workflows that the staff can follow through.
The Perfect Company’s latest round was a $6M Series A at the end of 2020.
Apicbase is a Belgian startup that collects all sorts of kitchen data, ranging from recipes and ingredients to costs and inventory. By analyzing the data, Apicbase can calculate needed orders, propose cheaper or most usual suppliers, and even identify menu choices that are not usually ordered to optimize menu designing.
Apicbase raised a €4M Series A (about $4.7M) in early 2021, bringing the total amount of financing raised by the startup to €6.2M (roughly $7.3M).
From food waste onto a new life
SeaB Power is a British startup that has patented a turnkey anaerobic digestion system that provides in-building capabilities to turn organic waste into biofuel, to support the energy supply in any building. The small-scale waste-to-energy appliance is camouflaged into a shipping container.
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Seab Power has raised a total￡2.1M ($2.91 M) and Enagás is one of their investors.
Although SeaB Power is not a hospitality-specific solution, they have shown interest in helping the industry become more energy-efficient and reduce food waste along the way. Among their use cases, it can be highlighted that of Chilworth Best Western Hotel (UK).
Kaffe Bueno is a Danish seed company that has hit the ground running, introducing used coffee grains and powder into cosmetic and hygiene products, as well as upcycling them to become functional foods. This solution not only allows hospitality companies to repurpose their wet waste but also provides opportunities for personalized amenities that differentiate their offering, as we can see from Sinature’s partnership.
So far they have raised a seed round of $1.1M.
No waste-hotel and the food-to-go trend infiltrates Hospitality
Wundermart is a Netherlands-based startup that facilitates the installation of a retail corner within office buildings and hotels. This solution has allowed well-known brands such as NH, Hilton, Raddisson, or Novotel to offer ready-made meals and snacks to both their guests and passersby, creating a new source of income for their F&B department.
Regarding Wundermart fundraising effort, the startup closed a €10.5M (around $15.92 M) Series A just this week.
Butler Hospitality enables “ghost kitchens” nearby to prep and delivers their food as room service as if they were in-hotel kitchen facilities. Being nearby facilities, the food is ensured to arrive at no time, with the same standards of excellence as it was prepared in-house.
The company raised mid-2020 a €13.7M Series A ($15M).
Too Good To Go
Hotels have embraced this option, with over 1,892 hotels across Europe being part of the initiative, including big brands such as Accor. Too Good To Go has developed an app where users can buy, at a very low price, food that hasn’t been sold that day and that would go to the bin if not consumed.
Too Good To Go has raised over $40M, their latest round raising $31.1M early this year.
Food Waste in the Hospitality Industry: A Conclusion
In this article, we highlight the great burden food waste represents in our society, and the inefficiencies it causes in our society. From the numerous industries that partake in the production, treatment, distribution, selling, preparation, and consumption of food, we have identified the Hospitality industry as a relevant player to be analyzed. By singling out Hospitality from other industries, the article suggests that the role of Hospitality in this cycle of waste is notable (up to a quarter percent).
While the current pandemic has put the industry under a strain, and to suggest investment in initiatives and solutions that focus on reducing food waste might seem insensitive, we believe that hospitality is an industry that can greatly benefit from incorporating such initiatives and solutions.
By reducing food waste, the hospitality industry not only can achieve more sanitized budgets (i.e. reduce unnecessary spending on food, lower utilities bills through the reduction of kitchen appliances’ use time, etc.) but also increase their guest’s loyalty towards their brand (i.e. which translates into higher satisfaction, more expenditure on-site, and increase occupancy rates across time).
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