How to Reduce Restaurant Waste Management Costs
Scott Swearingen / Waste Management / April 30, 2024
Anyone who has ever worked in the hospitality industry knows that restaurant waste management is crucial yet challenging. Restaurants often face significant expenses with commercial food waste disposal and management, throwing away not just leftovers but also dealing with spoilage and preparation scraps.
Besides food waste, restaurants can incur unnecessary costs from their restaurant waste collection and restaurant recycling services provider. These expenses come from unfair contractual terms and billing errors, with waste management companies commonly overcharging their clients. To effectively reduce expenses and enhance their bottom line, restaurants should adopt a dual approach — minimizing waste at its source and conducting detailed waste and recycling audits.
Let’s explore actionable strategies and best practices that restaurants can implement to optimize their waste management and maximize savings.
As we start to explore the financial, environmental, and social implications of waste management in the restaurant industry, it’s clear that effective strategies are not just beneficial, they are necessary. Restaurants typically discard 4% to 10% of purchased food before it even reaches the consumer, largely due to over-ordering or spoilage.
ReFED, a collaboration of businesses, nonprofits, foundations, and government leaders committed to reducing food waste in the United States, suggests the industry could gain $1.6 billion in profits annually from better commercial food waste disposal tactics. This not only impacts profitability but also contributes to broader ecological and social issues. By improving restaurant waste management practices, we can start to address greenhouse gas emissions and food scarcity, emphasizing the need for sustainable and responsible restaurant waste disposal.
The first step restaurants should take to save money and contribute positively to their community is to reduce food waste. Here are several effective ways to achieve this:
Each of these strategies not only cuts costs by reducing waste but also positions the restaurant as a responsible community member.
While implementing waste reduction strategies is essential for environmental sustainability and reducing initial costs, restaurant owners have a more direct route to saving money—restaurant waste management audits. These audits enable restaurants to recover funds by renegotiating contracts, correcting billing errors, and securing refunds for overcharges.
Engaging a specialized third party like P3 Cost Analysts can make this process even more advantageous. P3 operates on a risk-free, performance-based model, meaning restaurants do not pay any upfront fees. Instead, P3 only shares in the savings they successfully recover. This ensures that restaurants can reduce waste disposal costs and optimize their financial operations without any initial investment while holding waste service providers accountable through expert-led negotiations.
As part of a comprehensive waste management audit, it’s essential to closely examine current contracts or consider alternatives when entering new agreements. During these audits, understanding and scrutinizing the contract terms becomes crucial.
Sales representatives may have incentives to charge higher prices, which leads to variable pricing. With P3’s insight into industry benchmarks, restaurants can negotiate for more favorable pricing that aligns with the best available rates.
Waste management contracts often contain complex jargon that can lead to misinterpretations and unintended commitments. Clear understanding and careful negotiation of these terms are vital.
Restaurants in open markets enjoy the ability to shop around and negotiate better rates due to competition, which often leads to cost savings. Conversely, those in franchised markets face set prices negotiated by the government, offering limited flexibility.
While it is normal for waste and recycling companies to occasionally raise their fees due to valid cost increases, many increases are unjustified and driven purely by profit motives. These companies often introduce new fees over time, which can significantly inflate costs if left unchecked.
Fuel fees in the waste industry are often inflated and may not accurately reflect actual usage. Despite significant fluctuations in the fuel market, reductions in fees are not always passed on to customers, leading to overcharges.
This fee, often applied subjectively, is charged for supposed recycling overflow. It’s criticized for its vagueness and the arbitrary manner in which it is implemented, which can lead to unjustified overcharges.
Charges for overflow can be imposed even under minor infractions. These fees are sometimes applied even when delays in service cause the overflow, making them contentious.
Container maintenance fees are charged monthly and act like insurance for the aesthetics and functionality of waste containers. Since customers do not typically own waste containers, such fees are unnecessary.
During busy periods, additional pickup charges can be excessively high as waste companies leverage the flexibility of contract terms to impose steep fees for extra services.
Fees for exchanging, removing, or delivering dumpsters can be redundant and piled on top of each other, leading to unnecessary costs when, in fact, they should be covered by a single service fee.
Charges for hauling waste to distant landfills can escalate if waste companies choose to use facilities that are further away to maximize their profits at the customer’s expense.
Erroneous classification of regular waste as hazardous or special can lead to significant additional charges, often unjustified.
Strict penalties for contamination, such as placing recyclables in plastic bags, can lead to heavy fines, which may not always be justified or clearly communicated.
While some fee increases by waste management companies are valid and reflect genuine cost escalations, it’s essential to monitor these adjustments as well to ensure they remain fair and are not disproportionately burdening customers.
Monitoring the varied and complex factors that can lead to overcharging in waste management is challenging, especially without deep industry knowledge. To effectively keep these costs in check and secure fair pricing, partnering with a third-party expert like P3 Cost Analysts is invaluable. P3 offers the specialized insight and experience needed to navigate these issues, making them an ideal resource for restaurants aiming to maintain cost-effective waste management practices.
At P3 Cost Analysts, we specialize in reducing waste management costs for restaurants through meticulous waste audits. Our team, with decades of industry experience, understands the nuances of pricing and contracts in the restaurant waste collection sector. We leverage this expertise to secure the minimum possible costs for our clients, ensuring they do not pay until savings are realized, at which point we share in the savings.
The waste audit journey begins when a restaurant decides to partner with us. At this initial stage, we outline what the audit will involve and prepare our clients for the steps we will take together.
We collect three months’ worth of waste management invoices and a letter of authorization from our client to conduct the audit. Our detailed review of these invoices often reveals overcharges and unwarranted fee increases. Occasionally, a site visit is conducted to obtain a comprehensive understanding of the client’s waste management practices.
Approximately four to six weeks after our initial meeting, we present our findings and recommendations to the client. This report includes potential savings areas and suggestions for optimizing waste management strategies.
Armed with detailed audit results, we negotiate with waste vendors to secure the best possible contract terms for our clients. Even if a client has recently signed a contract, we are typically able to negotiate amendments that better suit their needs.
Once the negotiations are finalized, we will implement the agreed-upon changes. We then begin sharing the realized cost savings with our clients.
We continue to monitor our clients’ waste management invoices monthly to ensure that the agreed-upon terms are maintained. This ongoing monitoring protects against common issues such as contractual non-compliance and creeping fees. Additionally, we keep an eye on market conditions to identify further opportunities for cost reduction.
Effective restaurant waste management goes beyond mere reduction efforts. It requires meticulous auditing to guarantee every opportunity for cost savings is seized. The complexity of waste management contracts and pricing models means that specialized expertise, like that offered by P3 Cost Analysts, is crucial for restaurants aiming to minimize unnecessary expenses and enhance their operational efficiency.
If you’re ready to start saving on your waste management costs, contact P3 Cost Analysts today to schedule your free expense audit.
