Food waste is a big problem and one that carries hefty price tags. Studies show that a staggering 52% of all food waste occurs in restaurants and cafes, with U.S. restaurants spending approximately $162 billion every year in food waste costs alone. 

Food waste management is crucial in reducing operational expenses and improving margins, especially when it comes to coffee chains that operate on razor-thin margins and have to find creative ways of increasing the average check size.

In this article, we’ll take a look at how coffee shop owners can implement strategies to identify and minimize food waste and keep costs down.

Understanding Food Waste

Food waste, or more broadly, inventory waste, refers to any item that is wasted, discarded, or spoiled before it reaches guests' tables.

Let’s say that as the season turns, a new menu item gains popularity over others. But amid your numerous daily activities, you miss the shift in sales trends and reorder ingredients for menu items that now have lower sales. This oversight leads to storage shelves becoming filled with items nearing expiration faster than they're being sold, resulting in spoilage and lost profits.

The Impact of Food Waste on Coffee Shop Chains

It’s safe to say that the cafe industry is booming. Daily coffee consumption makes up more than 70% of Americans’ lives and 51% of people purchase from a coffee shop at least once a week. 

But the cafe industry isn’t safe from everyday operational inefficiencies, inventory waste being one of them. Whether it’s a fallen strawberry for the waffles or an expired pre-packaged sandwich, these are all occurrences of waste that should be recorded on a food waste log.‍

When it goes unnoticed, food waste eats away at a cafe’s bottom line and when food costs, coffee shop equipment costs, and labor costs are already at a high, minimizing food waste is critical. But where do you begin? Luckily, restaurateurs can control how much they waste before food goes on consumers’ plates by identifying where their waste is happening and implementing cost-saving strategies.

Common sources of food waste in cafes include:

• Over-ordering
• Spoilage
• Over-portioning
• Menu complexity
• Lack of staff training
• Inadequate forecasting

Essential Strategies for Waste Reduction in Coffee Shops

Coffee Shop Inventory Management

Minimizing food waste in cafés begins with proactively monitoring customer sales and inventory levels and consistently aligning supply levels with customer demand. Without detailed tracking—from to-go cup lids and stirrers to sandwich fillings and pastry toppings—it's difficult to understand the extent of waste generated and profits lost.

A robust coffee shop inventory management system provides operators with a precise overview of their inventory flow, sales frequency, and menu profitability. By tracking every drop, slice, and order, operators can gain real-time insights into stock levels and waste events, crucial for making informed purchasing decisions, calculating accurate menu costs, and mitigating waste.

Implementing effective inventory management practices ensures that customer favorites are always available, avoiding the pitfalls of overstocking and the risk of inventory expiration.

Supplier Collaboration

The relationships and agreements you establish with your suppliers have a direct impact on your inventory levels and your coffee shop's profitability. Making thoughtful decisions about which suppliers to partner with and the quantities to order from them can lead to competitively priced, high-quality menu offerings, consistent orders, and less food waste.

Whether you’re purchasing coffee beans, pre-packaged baked goods, milk, paper cups, some of the above, or all the above, chances are you’ll be ordering from various vendors. Collaborating with multiple suppliers, each with their own ordering processes, minimum requirements, and delivery schedules, can seem daunting. However, there are effective strategies to build strong relationships to reduce waste.

‍Direct Communication: Consistent, open lines of communication with your suppliers enable you to tailor your orders to meet your shop’s demand, negotiate order sizes, and schedule deliveries more efficiently, reducing the likelihood of overstocking and spoilage. 

‍Strategic Bulk Purchasing: While bulk purchases of food items might appear cost-effective at first, they lead to waste and diminished profits over time. Many coffee shops opt to order their non-perishable items in bulk instead, securing a steady supply of products with longer shelf lives.

‍Local Sourcing: Opting for local, seasonal products results in smaller, more frequent orders and less waste. Additionally, locally sourced goods often last longer due to reduced transit times, keeping your inventory fresh for longer.

‍Automation: Eliminate manual order entries with a restaurant purchasing and ordering management system. Track prices across all your vendors, set par levels and price limits, and submit purchase orders with a click of a button. 

Restaurant Recipe Card Template

How much caramel drizzle in the latte is too much (in our opinion the limit does not exist)? How much syrup goes into a large? The answers to these questions are crucial components of the training process and ensuring consistent pours and preparations over time is crucial to avoid overuse and waste.

Standardizing the creation of dishes and drinks across an entire operation can seem like a daunting task, but recipe card templates can help you get the job done. Recipe card templates serve as guides for baristas to ensure consistency in the preparation of all menu items. 

Typical restaurant recipe templates include:

• Recipe name
• Prep time
• Ingredients
• Procedure steps
• Serving sizes

Coffee shops can prevent over-portioning and reduce waste by detailing precise measurements, portion sizes, and yields on each recipe card. State ingredient quantities, brewing times, and other essential details to help staff avoid errors that lead to customer dissatisfaction and further potential waste. Download our free digital recipe card template to start planning out your menu items and ensure every plate and cup is served consistently and profitably. 

Recipe Templates vs. Coffee Shop Digital Cookbook

A diverse menu with a wide range of options allows you to attract a larger customer base, but offering too many options can lead to inefficiency and increased waste. An optimized menu incorporates ingredients that can be used in multiple menu items, offers items based on customer demand changes, and adjusts to seasonal ingredients.  

While recipe cards are useful for documenting recipes, menu optimization requires continuous updates to adapt to constant changes in seasonality and pricing. Printable recipe cards are tedious and time-consuming to maintain, while Excel sheets miss crucial real-time sales data. This makes it challenging to keep up with quick menu adjustments required for long-term adaptability and profitability.

With a digital cookbook, coffee shop operators can build out recipes, create perfectly portioned menu items, minimize waste, and train staff with ease. Updated in real-time, MarketMan’s cloud-based recipe database integrates live purchase data into menu items to provide accurate recipe costs, while factoring in food waste and shrinkage for data accuracy. Flag potential allergens, document preparation procedures and instructions, and access recipes on the cloud across all locations. 

Innovative Waste Reduction Practices for Coffee Chains

Enterprise-Grade Inventory Management

Managing inventory in a single location is challenging enough, but when you expand to multiple locations, the complexity multiplies. 

Each location in a chain experiences its unique flow of sales, performance levels, and wastage rates. Without a comprehensive overview of each site, identifying opportunities for improvement and making targeted, data-driven decisions becomes a formidable task. 

Imagine having a bird’s-eye-view of your entire operation - where you can authorize suppliers at the corporate level, distribute pre-approved items seamlessly, and fine-tune your menu's ingredients based on real-time data. This kind of strategic oversight transforms inventory management from a daunting challenge into an exciting opportunity to optimize your operations and enhance profitability across all your locations.

Centralized Commissary Kitchen Management

Commissary kitchens are dedicated kitchen spaces that restaurant operators use to process, prep, and store large quantities of food. These kitchens provide a variety of services from necessary equipment, food storage, waste disposal, and delivery services, depending on the needs of the food business.

Commissary kitchens are a great way for coffee shop chains to prep food on a large scale and provide uniformity across all locations. By utilizing a centralized shared space, cafes and coffee shops can efficiently manage the supply of prepped food and ensure quality control. This consistency enables owners and operators to manage their inventory more efficiently, reducing spoilage from unused items.

Coffee Chain Restaurant Automation

Pouring your heart into your coffee shop often means facing the challenges and headaches of narrow profit margins, rising labor costs, and complex operations head-on. 

It might seem daunting to introduce automation into such a labor of love, yet embracing technology solutions—from POS systems to scheduling software—transforms these challenges into opportunities for growth. These tools streamline your coffee shops’ processes and provide critical data, enabling you to make informed decisions, target shrinkage, and reduce inefficiencies.

Embracing automation doesn't mean losing the personal touch that makes your coffee chain unique; it's about enhancing your ability to deliver that experience more efficiently and profitably.

From Cafes to Quick-Service Restaurants, MarketMan’s cloud-based restaurant management software enables chains and multi-unit locations to take the guesswork out of their operations, gain control over inventory, reduce food waste, and deliver results. Connect all your units with a central production kitchen to track production events and data at scale. Centralize management for faster communication, greater control, and accurate reporting. Ready to see it in action? Book a demo today to speak with one of our experts.