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BFD Expert Voices - Retail Deals

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As the restaurant industry embraces AI, stakeholders are hoping the technology can solve the costly problem of food waste.

Why it matters: Commercial kitchens typically waste 4% to 10% of the food they buy before it reaches a customer's plate.

Consumer-facing restaurants and retail represent the second-largest source of wasted food — or about 29% of the total, according to the Natural Resources Defense Council.

What they're saying: "Many restaurants don't even capture how much they're wasting," says Ingo Stork, CEO of kitchen management software company PreciTaste.

"There's a lot more complexity and kind of navigating how much do I actually need to produce and prepare, which is not necessarily part of the intuition of an existing restaurant team," Stork says.

What's happening: The challenge really "starts with the back of the house" — the kitchen, says Jim Balis, managing director of the strategic operations group at restaurant-focused investment firm CapitalSpring.

There's also a labor component, says Melitas Ventures partner Michael Steib.

"Many of their [kitchens'] processes rely on untrained labor," largely because of high staff turnover, Steib says.

"That model creates inefficiencies in the sense that not everyone in the restaurant always knows exactly how much food to produce," especially when there are "peaks and troughs in demand," he says.

What we're watching: This is where technology can step in.

PreciTaste, for instance, has software that adjusts kitchen workflows to make cooking and ingredient preparation recommendations that ensure order accuracy and freshness.

Predictive analytics from AI will hugely impact restaurant waste, Balis says.

"You know almost exactly the amount of food that you would need, and it limits the amount of waste that you would otherwise incur if you didn't have that tool available to you," Balis says.

Restaurants can also create new dishes with the leftover ingredients using AI.

"Automation is really where it's at because there's even an element of food waste that you're not aware of," Balis says

Yes, but: "Restaurants need to be open to the opportunities that technology can present. I also think they need to do their due diligence," Steib says.

"Nothing is worse than implementing a piece of technology and then it ends up not working right, or it just doesn't generate the return that is hoped for," Steib says.

Meanwhile, companies like McDonald's and Chipotle are investing in robotics to solve supply chain inefficiencies.

But that is often difficult to scale due to the space, training and trialing you need to do with staff.

Of note: Advances in kitchen equipment, cooking equipment and oven equipment have made cooking more efficient.

You will have less undercooked or overcooked meat with the right tools, Balis says.

The bottom line: For food waste technology solutions to scale, proving out the economics is key.

If vendors can do that, "a lot of times operators are willing to make the investment," Balis says.

Restaurants look to new tech to solve food waste

Commercial kitchens typically waste up to 10% of the food they buy before it gets to customers.

Illustration of a person pushing food from of a plate.

Retail deals

As the restaurant industry <a class="gtmContentClick" data-vars-link-text="embraces AI" data-vars-click-url="https://www.axios.com/2023/10/18/restaurants-ai-robots-staff-fast-food" data-vars-content-id="4f7bfd6c-58a5-4704-a051-288879909279" data-vars-headline="Restaurants look to new tech to solve food waste" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/10/18/restaurants-ai-robots-staff-fast-food" target="_self">embraces AI</a>, stakeholders are hoping the technology can solve the costly problem of food waste.Why it matters: Commercial kitchens typically <a class="gtmContentClick" data-vars-link-text="waste 4% to 10% " data-vars-click-url="https://restaurant.org/education-and-resources/resource-library/control-your-food-waste-to-reduce-rising-costs/" data-vars-content-id="4f7bfd6c-58a5-4704-a051-288879909279" data-vars-headline="Restaurants look to new tech to solve food waste" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://restaurant.org/education-and-resources/resource-library/control-your-food-waste-to-reduce-rising-costs/" target="_blank">waste 4% to 10% </a>of the food they buy before it reaches a customer&#x27;s plate.

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Restaurants look to new tech to solve food waste

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