For restaurant owners and executives, the COVID-19 pandemic has heaved operations into an existential crisis.
Since the coronavirus started leading to lockdowns and shelter-in-place orders across the United States, restaurant revenues have plummeted, and brands are struggling to figure out to survive the collapse in demand.
In the post-coronavirus world, margins matter. And here, there’s good news: clever owners can use existing food safety tools to extract more profit from their stores. That’s because improved food safety practices can measurably boost overall business performance and can generate massive cost savings that aren’t even directly related to food safety.
How brands can use food safety systems to increase sales revenue.
US Foods (formerly U.S. Foodservice) conducted a study with the University of Michigan’s Ross School of Business. They wanted to improve their food safety processes sufficiently to comply with certification standards set by International Featured Standards (IFS). But they also wanted to know if deploying improved food safety systems, policies, and processes would also support positive business outcomes.
The answer proved to be an unqualified, unambiguous yes.
Specifically, the study found that after US Foods implemented a rigorous program designed to bring all its operations in line with IFS safety standards, sales revenue increased by 2%.
That improvement is likely thanks to an increase in consumer confidence in their brand.
Notably, consumer confidence is exactly what restaurants need to inspire today, with guests wary about doing business – even takeout or delivery options – for fear of exposure to COVID-19. In other words, proactively protecting consumers leads guests to feel safer doing business with the organization, inspiring more sales and greater loyalty.
As a significant bonus, it also leads to fewer complaints.
The US Foods/University of Michigan study also revealed that the improvement in food safety cut costs. Specifically, the investment in improved quality and safety systems led to 23% fewer customer complaints – and that, in turn, reduced the amount of labor needed to handle those complaints commensurately.
In fact, the study’s authors estimate that a large-scale company with 25,000 employees would see an estimated $3.5 million in savings each year due solely to the reduction in complaints. That’s $140 per year, per employee in cost reduction.
How food safety systems are critical to helping brands survive
COVID-19 is not the only risk to human health at restaurants and other foodservice organizations; pathogens like salmonella, listeria, E. coli, and more are still lurking in the background. Only now, with the coronavirus in play, there’s no margin for error. An outbreak that might previously have merely shaken a brand could this year prove fatal.
Indeed, the damages from an illness outbreak at a restaurant, either foodborne or viral, were quantifiably disastrous even prior to the current environment. A 2018 study published in the journal Public Health Reports simulated foodborne illness outbreaks of varying sizes to determine what costs they would incur. Researchers from the John Hopkins Bloomberg School of Public Health found that costs ranged from $3,968 up to $2.6 million. A 250-person outbreak and 100 meals lost per illness, for example, costs can easily hit millions of dollars (as much as $2.2 million for a casual-dining restaurant, and $2.1 million for a fast-casual restaurant) and amount to an estimated 101% of annual profits and revenue.
And those are the findings from before COVID-19. With restaurant operations stretched so thin and facing such threats today, there’s no slack. Now, more than ever, failing to properly prioritize safety can be potentially business-ending.
"Many restaurants may not realize how much even just a single foodborne illness outbreak can cost them and affect their bottom line," says Bruce Y. Lee, MD, MBA, executive director of the GOPC. "Paying for and implementing proper infection control measures should be viewed as an investment to avoid these costs which can top a million dollars. Knowing these costs can help restaurants know how much to invest in such safety measures."
“It’s difficult to find anyone who says food safety is not important, but people don’t always realize that when you do good for food safety, you do good for the business,” US Foods Senior Vice President of Food Safety and Quality Jorge Hernandez told Quality Assurance & Food Safety. “A strong food safety program and discipline provide benefits that go well beyond food safety.”
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