Stemming Food Losses in the Restaurant Industry through
March 14, 2017: By: Morgan Harris, Director Enterprise Solutions for Protection 1
Whether you operate full service restaurants or limited service establishments, or are a chain consisting of thousands of locations compared to a simple owner-operator, the competitive landscape is tough and every dollar counts toward your ultimate success or eventual failure. Considering profit margins can range between 3% and 6% of sales, every penny lost to theft, fraud and spoilage or contamination factors into the make-or-break scenario.
According to Baker Tilly’s Restaurant Benchmark report, a profitable restaurant typically spends 28% to 32% of sales on food cost. Coupled with labor costs, these prime costs consume 60% to 65% of total sales. Since food cost represents a significant portion of a restaurant’s expenses, even a small percentage point loss can take a toll. This adds up quickly if the restaurant specializes in high-end entrees, such as aged beef and expensive seafood. Moreover, when those losses come
from contaminated products resulting in outbreaks of illnesses tied to E. coli and norovirus, for example, the reputation damage to the brand can be devastating.
To help stem losses from spoilage or contamination, restaurants and food service providers should design and implement a comprehensive food safety program. While restaurants are not directly required to adhere to the FDA’s Hazard Analysis and Critical Controls Points (HACCP) standards, they are encouraged to adopt the principles behind this industry best practice for food manufacturers and distributors, including ensuring food is properly stored and temperature controlled.
Possibly one of the biggest risk operations and facilities managers face is equipment malfunctions leading to food loss. Since food costs represent a significant portion of a restaurant’s expenses, equipment malfunctions are high on the list of concerns with facilities managers, followed closely by the need to receive automated real-time or near real-time alerts to potential problems. Even in this age of IoT and connected devices, many restaurant operators still rely on manual logging by employees, including temperature recordings in food storage devices. While there are many potential downfalls to this type of reporting, some of the biggest lie in employee compliance to processes and procedures, no verified audit trails and the inability to receive notice of problems that occur during non-working hours.
Today advanced, state-of-the-art technologies are available offering 24/7/365 monitoring of critical conditions inside a restaurant operation. These could include temperature tolerances of food storage units such as walk-in or reach-in freezers, coolers and holding units. Beyond just providing a record of the temperature inside the units, a variety of sensor types allows operators to monitor not only temperatures inside the units but also actual food temperature, humidity, door status, compressor run-time, power interruption, differential pressure, CO2 and other critical points.
With these types of programs, all data can be stored in a secure cloud with server redundancy and automated system backups. New sensors come standard with data loggers, which will store data in case of a network or power outage. As soon as network/power is restored, the data loggers will transmit all of the data to the system.
When adding a third-party, professional monitoring company to the mix, you can receive automated alerts via email or text, and if warranted, a phone call from the central station operator who receives the alarms.
At Protection 1, we offer these services with a dedicated and personalized online portal for easy access to information related to all monitored sensors. This portal can also be used to schedule and document such things as annual inspections, calibrations of systems, historical trending and audit trails for any investigative inquiries that may arise from potential equipment failure.
Through the integration of remote video viewing capabilities, the central station operator can access the facilities and the sensor transmitting the alarm to verify exactly what is causing the alarm, whether it is a door left open, or an actual intruder on premise that may be attempting to steal inventory.
With more than 1 million restaurants operating in the U.S., it is a highly competitive market and every dollar earned is hard fought. Consumers today expect high-quality food, outstanding customer service and a clean, inviting environment. Those standards apply to full service as well as limited service operations.
Combatting losses and improving customer service while increasing profits is the responsibility of every employee working in a restaurant establishment. Technology has come a long way in helping toward achieving these goals whether it is advanced temperature monitoring solutions, wireless sensors or IP-based video that help us keep tabs on the little things that could have big impacts.
Protection 1 takes the latest technologies, integrates them into our monitoring platforms and uses the power of our people to help protect people, property and profits.