How to maximize profitability in the hospitality and food industry

When hospitality businesses have to face everyday challenges like rising costs, staff shortages and economic obstacles (like a recession) and have to deliver most importantly on goals like making a meaningful turnover or tackling supply chain issues, it might sound far-fetched to pay attention to green goals; however, sustainability can offer a real solution and create viable business opportunities that can be the helping hand that the managers in the hospitality and food industry were actually looking for. 

Since these tactics are yet to be discovered in the majority of the space, we are sharing our insights on how sustainability can provide meaningful value to businesses.

‍Reducing business costs (eco-) consciously

Choosing lower carbon impact and meat-free dishes can have numerous advantages like (having the potential) to be a lot cheaper to produce than average meals, meanwhile also serving a rapidly growing market and giving numerous benefits when it comes to marketing and branding.

Evidently, swapping ingredients in recipes with a heavier carbon footprint to ones with a lower emission makes a dish more environmentally friendly, but at the same time that also can make a dish cheaper to prepare or produce. By that, businesses can reduce their costs by also making certain dishes more eco-conscious.  

“Vegetarian recipes on average are 63% cheaper than meat or fish dishes.”

One of Klimato’s customers, Sodexo AstraZeneca, found that their vegetarian recipes are on average 63% cheaper than recipes that contain meat or fish. 

Meanwhile the cost to produce can be significantly cheaper, the selling price of the dish will still be around the dishes’ with bigger carbon footprint, so the profit on the carbon friendly dishes can be potentially larger. 

Serving more sustainable food can therefore contribute positively to profitability.

Good for all stakeholders: to the customers, to the business owners and most importantly to the climate! 

A “meaty” example on how to cut costs by choosing sustainable food options

Plant-based meat is also a sustainable method of reducing emissions whilst keeping costs down. In the Netherlands, plant-based meat is already cheaper than conventional meat (when sourcing them from certain producers). According to ProVeg, plant-based burgers are now 78 cents per kilo below the price of meat, and vegan chicken and mincemeat have also seen price drops in comparison to conventional meat (which became 21% more expensive on average). 

“Due to the large use of raw materials, meat is much more sensitive to disruptions in the world market than meat alternatives,” 

- Pablo Moleman, Co-Founder ProVeg Netherlands 

As Foodnavigator points out as well, plant-based alternatives are already nearing or past price parity with animal products and in the future they are expected to become even cheaper. Due to the fact that they are usually cheaper to produce since being less resource intensive. Good examples of this phenomenon are margarine and plant based milk which already took over the prior animal-based alternative.

How to increase sales in the hospitality industry by choosing sustainable food options

Numerous Klimato customers have seen a positive impact after starting to use Klimato’s tool.

“Fan reaction has been amazing. Food sales against recent similar shows are 45% up! Just proving that being sustainable and going plant-forward can also be a smart commercial choice.” 

- Jonathan Davies, Managing Director at Levy

As Levy UK+Ireland experienced it at a Billie Eilish show at the O2, sustainability is a good strategy for both business and climate impacts. 

A reliable, growing market in which customers are willing to pay more for having better, sustainable options

Studies show that the market of consumers following a plant-based diet is a rapidly growing one. While also being more loyal, they are the biggest spenders as well which are exactly the best features of a target audience. 

Eating more plant-based meals has grown in popularity over the years. YouGov’s biannual tracker shows that 14% of the UK population adopt a flexitarian diet, 5% are vegetarian, 3% are pescatarian and 2% are vegan. This adds up to an accumulated 24% of the participants in the poll. Which is almost a quarter of all expected guests; however, lots of businesses forget to cater to them. 

Even though vegans in particular will typically pay £37.55 for a meal out, they are forking out nearly £15 more on average than meat-eaters when they dine out.

Attracting the loyal and flexible customers

To engage this segment, businesses should look to add more vegan options to their menu. An established, successful way of doing so is providing vegans (or customers with dietary requirements) the same experience as non-vegans have in a restaurant, in terms of variety and general experience. 

Vegan Friendly, a charity, qualifies an establishment as vegan-friendly if its menu has at least 25% options in each category. This percentage is proven to be efficiently giving the non-meat-eating clientele enough options to satisfy them. Another option to engage eco-conscious customers is to implement carbon labels on menus. 

Increasing numbers by using food carbon labels

When a hospitality business has all the aforementioned options and caters for all needs, it still has one big opportunity to seize which is carbon labeling. 

Carbon labels have numerous ways to have a positive impact and increase numbers:

1. Generates customer loyalty and creates value to the brand
2. Changes customer behavior (influences choices towards sustainability)
3. By making consumer choices more predictable, it makes procurement and management easier
4. Adds employer branding value, helps to retain and appeal to staff 
5. Can be a good tool for sustainability marketing

Each of these points can increase sales numbers while also having numerous other positive effects. 

All in all, businesses should start investing in sustainable methods and realize the advantages it can provide them. While this can all sound like a complex new strategy, Klimato is ready to help and show how easy this new, lucrative sustainable way of working truly is! Start your journey today!