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Waste Not, Want Not

Overcoming the challenge of managing food waste.

Imagine the 108-story Sears Tower (now the Willis Tower) and then multiply that image by 44. That’s the size of the container you’d need to hold all the food that is lost annually in U.S. food stores, restaurants and homes combined.

It’s a shocking but accurate image, according to the U.S. Department of Agriculture, which launched the U.S. Food Recovery Challenge in June to encourage producers, processors, manufacturers, retailers and consumers to help reduce food loss nationwide.

For convenience store retailers, this is not a new problem. Waste is an inevitable part of running a foodservice business, but every operator wants to reduce it as much as possible.

Waste vs. Shrink
There are two ways to lose merchandise in a convenience store. One is waste and the other is shrink. Waste is the result of over purchasing, over production and making mistakes. Waste includes expired food, produce that goes bad before it can be used or foods with ripped packaging.

“It’s anything that is not sold by its sell date or hits the floor,” said Nancy Caldarola, education director of NACS CAFÉ, an Atlanta-based educational program for foodservice managers.

By comparison, shrink refers to products that are consumed or taken from the store but not paid for, including the employee who eats a sandwich or allows friends to take food from the store at no charge.

“Waste can be knowledge,” said Caldarola, noting that where your food goes can tell you what is happening in your business.

Know Your Customers
Putting nothing on the shelves is the only way to ensure you won’t be tossing food, according to Jerry Weiner, vice president of foodservice for York, Pennsylvania-based Rutter’s.

“What you want to do is manage waste, and you want to manage it to a level that you can make a profit,” he said. “It’s an expense line like electricity, labor or supplies.”

Take the roller grill, for example. “Once it’s spinning around, you have two options,” said Weiner. “You sell the food or you throw it away. The way you sell food is knowing and understanding your business. You must know what your customers are buying, how much they’re buying and when they buy it. You only have a window of about three hours to sell that grill product.”

One way to reduce the expense associated with waste is to focus first on the items that are costly and highly perishable.

“That’s where the money goes,” said Aaron Novesham, president of The Culinary Edge, a San Francisco-based foodservice consultancy. “Don’t worry about grains of rice. Worry about expensive meats. Put your energy where you get the biggest bang for the buck.”

Determine Your History
To successfully manage waste, you must know your sales history. Tools and technology can help you gather this information.

“If you know how much you’re going to sell, you can prepare for that,” Novesham said. “You look at your sales, predict what sales will be for the week or day and build your production around that. The best indicator of what you’re going to sell is history.”

Most foodservice retailers use POS systems to collect information that explains what and how much is sold each day of the year. Some systems allow you to input your recipes and ingredients and then keep track of the depleted inventory.

If you don’t have a multi-tasking POS, “just write down what you sell, make a prep list and track what you used,” Novesham advised. “The key is that you can’t just guess every day. You’ve got to base it on something that has happened. On day one it’s tough. But you learn from what is happening in your business.”

Once a store’s sales history is established, it will remain fairly static unless you are promoting a special foodservice item, having a major event near your store or experiencing unusual weather.

“Most of the historical trends stay the same,” said Chad Prast, director of foodservice for VPS Convenience Store Group based in Wilmington, North Carolina. “We always see a big bump in food sales during the beginning of the month so our production should be higher then. We also see a drastic drop in sales during holidays and weekends, so we cut back on production during those times to keep spoilage in line. Very rarely do sales deviate from the previous trends unless there is an abnormal activity like a fair or weather event.”

Prast believes in maintaining a small inventory of fresh food ingredients and re-ordering more frequently.

“Stores that carry a minimal amount of inventory and order more often will usually have lower spoilage and better margins,” he said. “The more frequent deliveries a store can get, the lower overall spoilage will be. It’s the same with production. Our goal is to make less more often, keep the products fresher and reduce spoilage.”

The Last Cookie
Few customers want to purchase that lone cookie lying amid crumbs in the bakery case or the single wilted breakfast sandwich in the hot box. A leftover has no appeal to the average shopper.

“Nobody wants to take the last thing off the shelf, so merchandising is important,” said Novesham. “Abundance sells in grab and go. Don’t let your shelves look barren. Add things that don’t have limited shelf life, such as drinks, or close off parts of your cases.”

While cases must look nice and full to attract buyers, “Being full and looking full aren’t the same thing,” said Jack Cushman, vice president of foodservice for Nice N Easy Grocery Shoppes, headquartered in Canastota, New York.

“In the morning, you might shingle your donuts where they lean against each other and you put a dozen in a row,” he said. “Later in the day, you lay them flat and put three or four in a row. You face it and forward it. Make it look nice, full and neat and you don’t have to put out as much.”

To move products out of the store, Caldarola suggests being creative, such as having a “happy hour” from 2 pm to 4 pm and selling donuts left from the morning rush at half price.

First-Class Foodservice 24/7
Nice N Easy is famous for pizza, which is hot and available 24 hours a day. “At 2 am, we want to have hot pizza available, but we may have a pizza that is a one-quarter sausage, one-quarter pepperoni, one-quarter cheese and one-quarter veggie,” Cushman said. “During the day, we’d have a whole hot pizza of each flavor.”

Rutter’s takes a similar position on keeping customers satisfied around the clock.

“Our entire menu is available 24 hours a day, seven days a week,” said Weiner. “Now does that mean that I have every single thing available for immediate consumption 24 hours a day? Of course not. If someone comes in at 10 pm and wants a breakfast sandwich, I don’t have eggs hot and sitting in a warmer drawer like I do in the morning. They may have to wait an extra minute.”

He continued, “Waste isn’t the enemy; it’s a manageable expense. When you start a new program, waste should be 9% or 10% and you adjust your retails accordingly. You need 30% to cover costs and 10% to cover waste.”

“One big key is not to over-manage spoilage,” said Prast. “If you do, it can cost you sales. Sales should be the first driver that everyone is shooting for.”

Pat Pape spent 20 years in the corporate communications and IT departments at 7-Eleven. Currently, she is a writer and communications consultant as managing partner of Brookview Advisors Inc.