So, in this second part of waste reduction, I want to address a few other items that will help you to either reduce your waste, OR help you re-purpose the waste for other products.
Peter Drucker, the original management guru once said - "That which is measured, gets managed". We are in an industry with a highly perishable product. Espresso (once pulled) stays good for about 30 seconds. Coffee (once brewed) only stays fresh for a couple hours. Likewise, bagels, muffins, scones, sandwiches etc made one day, are not good the next day. If you want to keep you business viable over the long-term, your product must be fresh and delicious - every day.
This is tough to do - because you must either order or produce your product before you need it. We make a set number of muffins, scones, bagels etc each day. In addition, we do not do sandwiches / salads on demand - we pre-make a bunch of each and leave them in the grab & go case for our customers to grab when they come in. So, you must be able to accurately anticipate demand well in advance of the purchase event - if you underproduce your product, you miss out on potential sales. If you OVER produce, then you end up wasting a bunch of product. Where is a crystal ball when you need it?
So - how do you accurately anticipate demand? the answer: a waste tracking system.
At the end of each day, the Shift Leader writes down the remaining products left in the case: (the following is actually lifted from the closing Shift Leader checklist:
When the shift leader has filled this out, they put it in a special cubby in the office. Once a week, one of my employees takes all these spreadsheets from the week, and combines them in a single spreadsheet that tracks the number of remaining products.
From this, you can see certain patterns, which allows you to adjust the production numbers appropriately. in this example, you can see that the days leading up to Tuesday 6/26 we had a consistent ~ 2 extra banana muffins left over, so we reduced the production by one. The subsequent days showed no banana muffins left at the end of each day.
This was probably not the best production decision, because the subsequent four days we were at zero - ideally you'd have two days at zero and two days at one - so this way you know that you were not missing out on purchases
It is a difficult balance you must maintain when figuring out the 'sweet spot' of production (or ordering - if you dont produce the stuff yourself) , because you DONT want to be left with ZERO product at the end of the day. If you do that, then you are probably missing out on potential purchases (not to mention pissing off customers at the end of the day who wanted a muffin). Ideally, you have a maybe one muffin left of 2-4 variety types.
You must be regularly adjusting production - I usually have one of my employees do it every 1-2 weeks. Demand increases for some products during some seasons and drop off in other seasons. The only way to consistently hit that sweet spot on production if you are regularly checking on waste and adjusting accordingly.
when the world sends you lemons... make lemonade!!
Even with the best waste tracking systems, there will still be left over product. If you do a good job with the waste tracking systems, it wont be alot, but there will still be SOME.
About five years ago, I was working late, and I noticed the case was still pretty full of product. It had been a crappy, rainy day, so sales had dipped about 20% (as it usually does on such days), so I was left with swaths of unpurchased product.... sandwiches, muffins, fruit cups, bagels etc etc. I looked around the shop and saw we only had a handful of customers left, with only an hour to go before closing.
*sigh*
Looks like I was going to lose a couple hundred dollars in wasted product. crap. Even if I took some home for the family, we'd still have to discard the rest. It would not keep for tomorrow. What a waste. Earlier that year, I had tried to give the stuff away to a homeless shelter, but they told me they would not pick it up, so I had to drop it off with them. I just finished a 14 hour day, and the LAST thing I wanted to do was to deliver a bunch of food somewhere (wasting both my time AND gas).
While standing glaring at my full case... it suddenly occurred to me... why not repurpose as much of these products as you can - transform them into other products that you can sell as a different product? With a bit of brain storming, I came up with some ideas that I subsequently implemented:
- Bagels: I have my staff slice them up, add some olive oil, salt and pepper, put them in the oven and bake them into *home made bagel chips*.... with hummus!
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Voila! One old bagel that we were going to throw away, plus 50 cents of hummus, and we have a new product! Bagel chips and hummus. Not only do we avoid wasting bagels, but we now have a new product that is HIGHLY profitable!
- Blended Fruit Drink! We usually have a couple fruit cups left over from the previous day:
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Now, we take these day-old fruit cups, add a half-cup of yogurt and blend them up for a healthy breakfast shake! We sell them for $4.00 apiece! People now come in early to snatch them up - and we've increased our fruit cup production so we have more left over the next day. Awesome! We also do something similar with our yogurt/granola/fruit parfait cups.
Left over baguettes from sandwiches? cut them up, bake them hard and use them as croutons for the next day's salads!
Yesterday's Yummies!!
There are some products that you sell fresh one day, that you cannot sell as 'fresh' the next day, but are still perfectly fine to eat. These include old muffins, scones and other baked goods. For these leftovers, we wrap them in plastic and sell them as 'yesterdays yummies' for about half price from the fresh stuff:
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You should always have a day-old baked goods bin. Always. This is not because you can at least recoup your costs if you sell the day-old stuff (which you can), but because of the information this telegraphs to your customers.
By prominently selling yesterdays baked goods at half-price, you are telling your customers loud and clear that everything in the case is fresh from today... and you will not sell your baked goods as 'fresh' unless they are actually fresh.
This is important - I knew a coffeehouse that tried to sell their day old muffins (and even 2-3 day old muffins) and fresh. The owner figured the customers would not be able to tell the difference. They could tell the difference. Needless to day - that coffee house is no longer in business.
OK, this next part is kinda gross.....
Dumpster diving. One of the best sources of information about what you are wasting money on is in your dumpster. By pulling out garbage and looking through it, you will find a bunch of stuff that people are throwing away. This can give you insight into your business that you didnt have before, AND it will give you additional ideas about where you can cut out waste.
A couple years ago, I did a dumpster dive, and I found some surprising things. First of all, there were a large number of half-bars in the garbage. I was shocked! How was this possible??? Our bars are fresh, people are always complimenting our bars! I've never once heard a compliant about something being wrong with our bars! At the time, we were selling our bars (lemon bars, pumpkin bars, heaven bars etc etc) in sizes of 3" x 3". Now, I'm not a small guy - I'm 6'2" and I tip the scales at 240lbs. A 3x3 bar is about the perfect size snack bar for ME... but in hind-sight, I realize that I'm a bit of an outlier. People loved the bars, but simply could not finish them. So, they would eat half of one, and either save the rest for later, OR they would throw the rest away. Solution? cut the bars into quarters. We were selling a big bar for $3.50 per unit, and we cut them down to 1.5" x 1.5" (put them in a little muffin paper) and sold them for $1.25 apiece. Thus, the insight gained from one dumpster dive resulted in increasing my profits per bar from 70 cents (when we sold it for $3.50) to $2.20 per 3"x3" bar!! The best part? we actually sold MORE volume at the smaller size. The lower price was much more accessible and it allowed people to get a cup of coffee and a 'little something sweet'.
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In this same dumpster dive, I discovered that one of my employees was double-cupping every drink (instead of using a java jacket). A cup costs about 10-15 cents more than a java jacket. They were making ~ 150 drinks per shift, so that was translating to an additional $18 in expenses per shift they were working! 4 shifts per week, and you are throwing away $300 per month in unnecessary charges!! An easy savings with just a couple words to my staff.
Key learning from this? Use CLEAR garbage bags instead of the black plastic ones. This way you can see what people are throwing away without actually having to open the bags up and dig through them.
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future possible areas of waste savings?
I have a couple more ideas for ways to save money and use 'waste' products that I have not yet implemented.
About a year ago, we went from a regular garbage dumpster and a recycling dumpster, to a split waste stream, so now we have *compost only* bins and *everything else* bins (because all other waste materials we use are recyclable). The recycling bin pick up is MUCH cheaper than regular garbage pick up - about half the price. The one downside to this change up is that compost is more expensive. Not only do you have to use compostable garbage bags (about twice as expensive), but the actual disposal is more expensive (about $20 per 50gal garbage bin per pickup). So, we are getting two of these bins picked up twice a week, which translates to about $80 per week in compost expenses.
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I recently stumbled across this really cool commercial-grade composter:
Basically, you put all your compost into one of these machines, and it coverts it all to compost within 24 hours. Pretty awesome! I dont know how much these machines cost... and I dont have any idea where we might put the machine, but anything I can do to avoid the $80/week compost removal expense ($4000/year) will probably be worth while. I figure it would cost a couple grand to buy and set up, then around $30/month in electricity... it should pay for itself in no time flat. AND it will produce wonderful garden-ready compost.... ummmm..... maybe I can start selling 'local compost' as a side business!!
Dosage Grinder
I had a problem with my espresso grinder - specifically it never dosed
the right amount when you pulled that little lever on the right side. sooo... people usually over filled the
portafilter and then casually swiped the extra into the knockbox. I noticed this one day, and I realized that I
was throwing away about a pound of espresso per day on the casual little
swipe. Umm... $8.00 per pound x 7 days
per week = $56... x 50 weeks... holy crud.
I was tossing away $2800 per year in espresso!!! So, I bought a new grinder. It was beautiful. Mazzer Grinder Super Jolly Electronic Automatic...
Dont get me wrong - it was expensive.
About $1100. Much more than a
regular grinder. The beauty of this
grinder is that it ground ONLY the amount you needed for a double shot (or
triple shot) - no more, no less. This
means that it will pay for itself in about 20 weeks, and after that, it will
return $2800 to my pocket every year.
ABSOLUTELY WORTH IT!!
CUT the phone line
AT&T really enjoys taking advantage of business
customers. They charge me $90/month for a business line
that I BARELY use. I used to have a
bunch of equipment that needed a phone line to work (ATM, Credit Card Machine,
Gift Card Machine etc). Over time, I
gradually weeded them out - so they all went through the internet. Finally, I was ready to cut the line, but
before I did that, I got a google voice account (very easy to set up), then I
transferred the shop number over to Google Voice. Took a couple days for the transfer. You can do the transfer directly from the
Google Voice page.
I then got a Obitalk box (www.obitalk.com) - it costs about $60 in
Amazon (search for an OBi200 VoIP Phone Adapter (this one supports Google
Voice). Then, you set up your Obitalk
account (through the website),and hook up the new box. Voila - you now have a free phone line -
costs you NOTHING to use. I suggest you
grab a DSL
filter to run the line through - it makes for a cleaner signal (and works
for analog phones) - woo woo! Just saved
another $1080 per year!
Hand Driers
You might be tempted to use paper towels in the bathrooms - for
people to dry their hands. DONT DO IT!! Just get a good quality hand drier.
We go through a case of paper towels (for drying hands in the
bathroom) about once every two weeks - that is $15 per week. Not a huge amount - translates to about $750
per year.... then you get hit. About
once every two years, some joker puts a bunch of paper towels into the toilet,
and JAMS it up. Not just the toilet, but
the drain pipe as well. $1800 later, the
toilets started working again... Just
not worth the time,energy and money.
Originally, I was planning to get a couple of those Dyson Blade
driers, but they proved to be *extremely* expensive - around $1200 apiece!!!
And that doesnt even include installation!!
I found a couple Toto hand driers (HDR100-GY) - they got good
ratings on Amazon.com. Cost about $320
apiece, but they claim to dry peoples hands in 12 seconds - that seems about
right. So, these will pay for themselves
in the first year, and thereafter no expensive plumbing problems (at least from
paper towels) and an additional $750 in my pocket every year.
Well, I think that's enough for one day. I hope you guys have found some of this helpful! Please drop me a note if you have some questions, or have a specific topic you'd like to see something written on. I'd be happy to give it a shot.
-Duncan
The Coffeehouse Guy
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