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24 Aug 2023

Services

Restaurant business in 2023 is expected to expand by 7.1 percent YoY. Going forward, food waste management will help reduce costs and achieve net zero goal (Current Issue No.3429 Full Ed.)

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        The restaurant business is expected to grow during the remainder of the year, thanks to the recovery in tourism and long holiday festivals. KResearch projects that full-year 2023 turnover of the restaurant industry will reach THB 435 billion, growing by 7.1 percent YoY. However, the expansion of restaurant business value remains uneven while most operators still face challenges, such as intensified competition in all segments, elevated operating costs, and labor shortages. These factors affect profitability and longevity in business operations, making it take longer to reach the break-even point. As evidenced, only 35 percent of newly opened restaurants are able to survive for more than three years after commencing operations (data from LINE MAN Wongnai). Going forward, restaurants that are likely to face challenges include casual dining restaurants due to the numerous players in this segment, and quick-service restaurants that must adapt to changing consumer behavior.

        Amid heightened competition, restaurant operators must shoulder rising operating costs, especially raw material costs that may fluctuate due to the impact of the El Niño (raw material costs accounting for up to 35 percent of the total costs). Therefore, efficient cost management remains crucial. One strategy that restaurants could adopt is managing food waste, which accounts for 4-10 percent of the total ingredients. Achieving this would not only aid in cost reduction but also contribute to mitigating environmental impact. It has been observed that the food service industry globally generates around 244 million tons of food waste each year, contributing to 8-10 percent of global greenhouse gas emissions.

        Restaurant operators can help reduce food waste through more efficient raw material management and cooking processes, such as deploying technology in stock management such as Point of Sale (POS) systems; and offering discount promotions for food left unsold at day’s end by selling it in stores and through food delivery platforms. Other actions include organizing CSR activities to maximize the benefits from surplus food, such as using leftover food for animal feed or biogas production, making organic fertilizers for agricultural purposes; and creating menus with various portion sizes to offer customers a variety of choices when placing orders. Many restaurants might already take such actions, though focus should be on approach adjustment to achieve concrete results.

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