The financial impact of food waste in catering establishments

Abstract

PURPOSE: The topic of food waste is one which cannot be ignored. This research aims to investigate the potential financial impact that food waste may be having on catering establishments operating in the food service and hospitality industry, a previously identified large contributor of such waste. Additionally, this study will also explore the use and effectiveness of various management accounting tools and techniques, in relation to reducing the total amount of food waste generated by catering establishments. The main management accounting areas explored by this research include Inventory Management and Control, Budgeting, ABC, and CVP analysis. DESIGN: This study adopted a qualitative research approach, whereby fifteen semi-structured interviews were carried out with Maltese catering establishment owners, managers, or head chefs. FINDINGS: The main findings emerging from this study have determined that food waste in catering establishments can have serious financial implications if it is not kept under close control. Furthermore, the findings also suggest that the current levels of food waste in catering establishments are generally under control. This study also found that the majority of establishments carry out basic management accounting tools and techniques, sometimes even unknowingly. Additionally, the areas of management accounting explored in this study have shown to be helpful in the monitoring and minimizing of food waste and its associated costs. CONCLUSIONS: The findings of this study suggest that whilst current levels of food waste seem to be under control, more awareness on the topic needs to be raised. Additionally, food costs are drastically increasing, thus advocating for greater use of management accounting by catering establishments. Closer monitoring of food waste in catering establishments should also be carried out in order to increase efficiency and minimise related costs. VALUE: This research provides catering establishments with the importance of monitoring and reducing their food waste and its related costs. Additionally, the importance of management accounting tools and techniques in the running of their business is highlighted.