Technology
8 insights on cutting food waste, boosting margins with predictive supply chain analytics
By Nick Fryer, Vice President of Marketing, Sheer Logistics
February 4, 2025 by Nick Fryer — Vice President of Marketing, Sheer Logistics
Food waste is a global problem with far-reaching consequences for the environment, economy, and society. According to the United Nations Food and Agriculture Organization, about a third of all food produced for human consumption is lost or wasted each year. This amounts to roughly 1.3 billion tons of food, with the majority coming from industrialized countries where consumers and retailers are responsible for an estimated 222 million tons of waste annually.
Cutting down on food waste is not only an ethical and environmental imperative, but it also has a significant impact on profit margins for businesses in the food industry. Read on for more insights, including:
- Exploring food waste challenges in restaurants.
- Overproduction and forecasting errors.
- Poor storage practices.
- Inefficient inventory management.
- How predictive analytics is transforming the supply chain.
- Reducing inventory waste with smarter forecasting tools.
- Maximizing profits with data-driven supply chain management.
- Harness analytics to trim food waste.
Exploring food waste challenges in restaurants
Food waste remains a pressing issue within the restaurant sector, contributing significantly to the larger global crisis. Restaurants generate substantial food waste due to excessive portion sizes, overstocking, and inefficient inventory management systems. According to the Food and Agriculture Organization, food services contribute about 26% of all food wastage globally, illustrating the considerable role restaurants play in this problem.
The economic impact of food waste on restaurants also cannot be ignored. Wasted food represents lost revenue since the cost of sourcing, preparing, and disposing of uneaten food adds up quickly. Below are the causes of food wastes in restaurants:
Overproduction and forecasting errors
Preparing far more food than necessary often leads to excessive waste. This can result from inaccurate customer demand estimations during busy service hours. Studies from the World Resources Institute show that improved forecasting tools could reduce food waste by up to 28% in commercial kitchens. Optimizing production schedules and closely tracking past consumption patterns can mitigate these forecasting errors over time.
Poor storage practices
Improper storage significantly contributes to food spoilage. Fresh ingredients, particularly meat and vegetables, are highly sensitive to storage conditions such as humidity and temperature. The USDA provides resources on food storage best practices to help operators prolong shelf life and minimize spoilage. Consistently monitoring facility conditions ensures that perishable goods remain viable for as long as possible.
Inefficient inventory management
Restaurants must have accurate inventory management systems to keep track of their ingredients and supplies. A lack of visibility into what items are on hand, when they expire, and how fast they move can result in overstocking or understocking. This not only leads to food spoilage but also causes financial losses due to excess purchasing or missed sales opportunities.
How predictive analytics is transforming the supply chain
What can restaurant operators do to reduce food waste and protect profit margins? Implementing advanced logistics technologies, processes, and data analytics can have a transformative impact on the performance of your food supply chain. Predictive analytics uses data to generate insights that streamline supply chain operations. Analyzing historical trends and patterns helps businesses anticipate demand changes, reducing risks like overstocking or shortages. This improves resource allocation, ensuring products are available to meet customer needs without unnecessary waste.
Managing temperature-sensitive goods is a critical application of predictive tools. Cold chain logistics depends on maintaining precise conditions to prevent spoilage and comply with safety standards. Predictive analytics monitors and forecasts temperature variations across the supply process, enhancing the handling of perishable goods.
These tools also optimize transportation routes. Combining data on traffic, fuel consumption, and delivery schedules allows for efficient route planning. This approach minimizes delays, lowers operational costs, and ensures schedules are met consistently. Real-time capabilities enable adaptation to unforeseen challenges such as weather disruptions or mechanical issues.
Supplier coordination benefits from predictive insights as well. Forecasting inventory needs ensures procurement aligns with demand cycles, minimizing excess stock or critical shortages. This data-driven approach strengthens supply chain resilience, making operations adaptive and efficient.
Reducing inventory waste with smarter forecasting tools
Smarter forecasting tools equipped with advanced algorithms analyze historical sales, market trends, and seasonal fluctuations to provide precise demand predictions. Such insights help businesses align inventory levels with actual demand, preventing overstocking or shortages.
One major benefit of these tools is the ability to track real-time inventory changes. Continuous monitoring identifies slow-moving products early, allowing companies to adjust purchasing patterns or run promotions to clear excess stock.
Companies can quickly identify slow-moving products and implement corrective actions, such as promotions or order adjustments, to minimize surplus. Collaborative tools further support this by enabling suppliers and businesses to work together using shared demand forecasts, which prevent over-purchasing and ensure resources meet actual needs. The use of smarter forecasting tools greatly reduces excess inventory, enhances operational efficiency, and lowers costs.
Maximizing profits with data-driven supply chain management
Data-driven supply chain management empowers businesses to boost profitability by enabling smarter decision-making. Companies can analyze vast amounts of data, including demand patterns, logistics performance, and supplier efficiency, to uncover opportunities for cost savings and revenue optimization. Advanced analytics streamline operations, reduce delays, and ensure that resources are allocated effectively.
One significant advantage of data-driven strategies is improved demand forecasting. Accurate predictions reduce excess inventory, allowing businesses to avoid unnecessary storage costs. Plus, optimizing delivery routes and schedules through data analysis cuts transportation expenses, ensuring goods reach their destination efficiently. A study from Deloitte found that companies leveraging data analytics in supply chain management experienced an average 9% reduction in costs and a 15% increase in overall service levels.
Data-centric approaches strengthen collaboration between different supply chain stakeholders through shared insights and transparent communication. These methods identify bottlenecks, allowing teams to streamline processes and eliminate inefficiencies. Analyzing operational data provides businesses with a clearer picture of where adjustments are needed to meet shifting market demands. This leads to more flexible and adaptive supply chains capable of responding to challenges swiftly. Ultimately, leveraging these insights enables organizations to maintain consistent profitability and build a competitive edge in dynamic markets.
Harness analytics to trim food waste
Food waste continues to harm both the planet and profitability. Predictive supply chain analytics transforms how businesses handle inventory, improve demand forecasting, and streamline operations, cutting unnecessary waste and boosting margins. These tools optimize processes, ensuring resources are allocated efficiently while adapting to changing demands. Businesses have the power to implement predictive analytics today to reduce waste, protect profits, and create a more sustainable supply chain that benefits both the economy and the environment.
About Nick Fryer
Related Media
Subscribe
Get the latest news and resources from Fast Casual.
Recent Posts
