How restaurant chains are improving guest loyalty and boosting profitability through a digitally connected cold chain

Food & beverage   01 Aug 2018

A restaurant chain’s brand equity hinges on the freshness, safety, and quality of all served foods. One outbreak of a foodborne illness or public health risk can devastate a brand for years and lead to diminishing sales. Food loss of products in transit can result in a restaurant being out of a favorite menu item, which can impact consumer trust and loyalty.

Those working in the quick service and full-service restaurant industry know just how impactful food costs and brand reputation are for their success. Controlling food costs and waste presents one of the most important aspects to running a profitable restaurant. This is due to slim margins—according to research conducted by the National Restaurant Association, the average profit per dollar in food service is around $0.05—as well as the percentage of costs represented by foods.

With a growing demand for fresh, quality foods, in addition to an increasingly complex domestic and international supply chain and growing regulatory requirements, gaining efficient and effective cold chain management for fresh, frozen, and processed foods while in transit or in storage presents a unique challenge for businesses.

What’s eating restaurant profits?

Food and beverage costs alone can take up to 25-40 percent of a restaurant’s total costs. Food waste can have devastating effect on the bottom line, which makes it so important to measure and prevent. In the U.S. alone, restaurants end up throwing away millions of pounds of food every day, in addition to the food that is wasted while in transit.

On average, approximately 21 percent of all food waste arises from spoilage, with fresh fruits and vegetables comprising a substantial amount, in addition to meats, poultry, fish and other seafood products, and other temperature sensitive proteins. All of these products can largely be affected by external conditions post-harvest or production and require constant refrigeration to maintain freshness and quality.

While traditionally, it was common practice to order and ship more products than ordered and write off a percentage due to spoilage during transit, this is increasingly becoming less affordable and less acceptable in terms of the investments needed to harvest or produce it. There is a growing focus and demand on the industry for greater care and distribution practices to address global food shortages and sustainability concerns, which is encouraging food companies to embrace new technology and services to position themselves for both profitability and conscious consumerism, as consumers are more interested in where their food products are sourced and whether a company they support is thinking about environmental responsibility.

Food degradation and spoilage is still occurring at earlier stages of the supply chain, and, because damage often isn’t noticeable until it is too late, producers and growers often are unaware of issues before it reaches a restaurant or food location. Food products being transported through the chain of custody or being loaded and unloaded through docking stations are at a greater risk of being subjected to higher temperatures that can significantly impact product freshness, safety, and quality.

The recipe for innovation: An automated, intelligent cold chain

It’s estimated that, by reducing food waste from 20 to 50 percent, the industry could save between $120 and $300 billion. The need for maintaining consistent and accurate food freshness, safety, and quality through a trusted, secure, and innovative way to document temperature and product location in real-time and in a traceable format compatible with reporting requirements is mission critical, and new technology and services are helping to solve these challenges.

Legacy cold chain monitoring tools are analog and hardware-focused and require manual, ad hoc and manual processes, which can be costly and time-consuming. Temperature is manually recorded in the truck or container, and loggers are collected at the end arrival of their destination, where data is downloaded and read, then uploaded to a software platform (if at all).

However, there often isn’t sufficient enough time to fully assess the temperature history before shipments are accepted or rejected, meaning that the reports can be slow to generate and evaluate product quality. Moreover, visual inspections do not always reveal food product damage, and remaining shelf life can remain elusive.

Traditional loggers do not always stay with the product for its entire journey through the cold chain, making it difficult to pinpoint exactly where an incident occurred in order to mitigate risk through corrective action. Inaccurate temperature and product movement tracking essentially makes determining food quality and shelf life a guessing game.

With smart sensors and the introduction of wireless and reusable IoT technology, like Controlant’s, which travel with the shipments and can be placed on the palette level to measure temperature data granularly to provide accurate temperature and product location traceability data, businesses are able to collect quality metrics in real-time. This enables businesses to proactively intervene and save products if a deviation starts to occur, and direct a shipment to the right location in the shortest amount of time in order to maximize freshness and increase shelf life.

Real-time notifications and alerts facilitate immediate shipment intervention, while prescriptive analytics help identify risk areas and drive accurate forecasting. Complete cold chain traceability data is stored securely in the cloud and can be shared with stakeholders, including suppliers, distribution centers, and 3PL partners throughout the supply chain. Open APIs are available for systems integrations with enterprise resource planning software, quality management software, and other applications.

Controlant’s technology travels with temperature-sensitive food products, enabling businesses to maintain the chain of responsibility, as they can be configured to monitor changes in custody, in addition to time, location, and temperature. They detect whether a product has been tampered with and reflect product environments more accurately. The ability to document where food products have been, who they have had contact with, and the processes they have been exposed to establishes better transparency and accountability, while curbing foodborne illness outbreaks and isolating profitability leaks in the cold chain.

By seamlessly connecting the restaurant supply chain, operators are able to:

  • Gain a cost-effective, single source of truth and traceability from farm to fork
  • Shift to proactive, exception-based cold chain monitoring and decision making
  • Substantially save money from reduced product waste and operational costs
  • Improve visibility and collaboration across all stakeholders
  • Reduce manual entry and human error
  • Ensure sufficient, quality food supply at restaurant locations
  • Improve time-to-delivery and lengthen shelf life
  • Improve sales margins, growth, and sustainability efforts
  • Build and protect brand equity

A different pricing and services model

A digitally connected cold chain that provides real-time, actionable data and insights across the supply chain is necessary but it isn’t sufficient to fully mitigate risk, maintain control, and save costs. A proactive food safety and quality program doesn’t simply collect smart data; it also effectively leverages it at the moment that it’s actionable and impactful.

Many companies seek the benefits of real-time data, but they lack the resources needed to proactively monitor product conditions while they move throughout the cold chain. Our 24/7 monitoring and response team does just that, 365 days per year. If temperature and other conditions start to deviate from pre-established boundaries, our team immediately responds to notifications and alerts in order to facilitate corrective action and save products before any degradation occurs. 

While most cold chain vendors sell sensors and hardware, our team provides cold chain management solutions as a service. Our pricing is subscription-based, and doesn’t require costly CAPEX investments in hardware. Businesses can get started with a pilot or project and scale incrementally as needed.   

The proof is in the pudding—and the profits

In our new era of growing, sourcing, and transporting food where demands are ever-increasing, food handling has resulted in a new paradigm that values quality, transparency, security, reliability, accuracy, and sustainability.  Transparency, documenting the temperature conditions to which a product has been subject, and tracing the location of where a product has been, are all key to establishing accountability. They’re essential to curtailing foodborne illness outbreaks as well as minimizing losses in the cold chain.

Although some view the need for transparency as cumbersome and invasive, forward-looking businesses are viewing it as an opportunity for brands, growers and producers, and logistics partners — regardless of their size — to distinguish their products and services through improved quality and efficiency. Both establish a basis for ensuring greater customer satisfaction. Providing higher and consistent quality improves relationships, drives customer loyalty, protects brand integrity through improved quality and a reduced risk of foodborne illness, and boosts the bottomline.

If restaurant companies are looking to retain more customers and revitalize their business, there’s no better place to start than by revitalizing their cold chain.

 

 





 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            




 

Contact US

Learn more about our cost-effective, real-time, end-to-end cold chain visibility solutions or get started with a pilot today.

Contact us

Share Close close
close
close