How Proper Inventory Management Can Save Your Restaurant Thousands

What if I told you that you could be throwing away thousands of dollars every month? And no, it's not because of a slow night or a bad review—it's something much more avoidable: food waste. With proper inventory management, you can waste less food and save your restaurant thousands.

The shocking truth about food waste

Did you know that food waste accounts for 4 to 10% of your restaurant's food purchases? That means your food costs could be running up to 10 points higher than they should, simply due to waste. For some of you, that may not sound like much, but over time, we're talking about thousands of dollars—money that could be used to grow your business instead of being thrown in the trash.

And it’s not just the cost of the food itself. There’s also the labor to prepare it, the energy to store it, and the lost sales opportunities that come from running inefficiently. So how do we tackle this problem? It starts with understanding your inventory. 

Inventory management: The key to cutting waste

Inventory management isn’t just about counting what's in the freezer. It's about tracking what comes in, what goes out, and what’s sitting around too long. Accurate inventory tracking helps you predict what you’ll actually need, minimizing over-ordering and spoilage.

Let’s talk restaurant food solutions.

1. Set par levels
   Establishing par levels ensures you only order what you need. You can use past data to predict future demand, so you’re not overstocking or running out of key items.
2. Use FIFO (first in, first out) 
   This classic rule means using older stock first. It’s as simple as making sure the new milk goes behind the old milk. You’d be surprised how often this isn’t followed in restaurants!
3. Control portions
   Train your staff on consistent portioning. This not only reduces waste but also keeps your food costs in check. Plus, when customers receive the same portion every time, they’re more satisfied, and that consistency can drive sales.
4. Perform regular inventory checks
   Weekly inventory checks allow you to adjust orders based on actual usage, preventing overstocking. A solid system in place ensures you’re counting inventory regularly, which makes a huge difference.

Investing in the right technology, such as food and beverage software with inventory management features, connected to your POS system, can streamline this entire process. It can even help automate par levels for ordering, saving you both time and money. 

How much are you losing to food waste?

With proper inventory management, you could reduce food waste to almost nothing. There will always be some level of waste, but it shouldn’t be more than 2-4%. If you’ve got a rockstar chef or kitchen manager, that number could be as low as 2%. On the other hand, restaurants without strong inventory control can see food costs run as high as 10% above where they should be. If you're looking to bring that number down, proper inventory management is the solution.

Be sure to visit my YouTube channel for more helpful restaurant management video tips.