In a previous blog post, we made a strong point about how tackling Scope 3 is the biggest challenge the food industry faces when it comes to emissions reductions.
In the food service sector, food inputs which fall under Scope 3 emissions, account for over 80% of their total carbon footprint. While food inputs are found upstream, there are real and effective sustainability strategies that can be implemented downstream such as evaluating the environmental impact of recipes. From choosing between ingredients or between suppliers and understanding their differences, real reduction opportunities exist from carrying it out.
In this article, we will illustrate what recipe evaluation for food service players means and list down concrete financial benefits to it.
Environmental impact evaluation of recipes serves the purpose of not only identifying how sustainable your recipe is but also provides you with information on where you have the biggest reduction opportunities. By evaluating your recipe, you can break down the environmental impact of every ingredient and identify which ones weigh the most in terms of carbon emissions.
It sounds like sorcery but this is entirely made possible by Life Cycle Assessment, a scientifically approved methodology of evaluating the environmental impact of products or services. It is a methodology that is approved by the European PEF (Product Environmental Footprint) and is standardized by ISO 14040 and 14044.
Through LCA, the evaluation of recipes or food products is possible by measuring its impact at all stages of its life cycle, from agricultural production all the way to consumption and waste disposal. With that said, its benefits are not confined to just measurement: LCA can also bring to surface operational levers for reduction, particularly when it comes to procurement and R&D.
In terms of procurement, recipe evaluation through LCA can be particularly valuable in overcoming the limitations of different labels on food inputs that are generally considered by purchasing teams.
Although informative, labels are not always synonymous with low-carbon products or, on the contrary, do not highlight certain environmentally-friendly agricultural practices. A good example would be the “Organic” label, which doesn’t really guarantee environmental sustainability as it does not take into account criteria such as tillage, monoculture or product origin.
Using LCA to promote more sustainable procurement can provide you with a holistic and transparent view of the environmental costs associated with the food inputs or services you purchase. As an example, an LCA of a particularly emissive raw material from two different producers can be particularly interesting, as it can help identify the supplier with the more superior environmental credentials, and also support suppliers who are lagging behind on climate issues.
LCA can also be a practical tool for your R&D when it comes to adjusting recipes or developing new ones. By having access to information on which ingredients are more sustainable, you can swap out highly emissive ones for better alternatives to come up with recipes that have a lower overall impact. Let's take a very simple example: a crème brûlée. Made with powdered skimmed milk whose emission factor is 14.82 CO2eq/kg, it is much more emissive than one that is made with pasteurized skimmed milk whose emission factor is only 1.18 CO2eq/kg.
It is also widely recognized that recipes rich in animal products, particularly beef and dairy, tend to carry much higher carbon emissions compared to plant-based recipes. Yet, the scope of recipe evaluation through LCA extends beyond just comparing the emissions of two different products. Because of its standardized methodology, you can also delve into like-for-like comparisons, analyzing the disparity in environmental impact between similar products from different suppliers, for example.
It’s important to note that aside from evaluating the ingredients themselves, recipe evaluation via LCA also looks into the processes of preparing every recipe which involves transportation, energy use, packaging and waste disposal, providing you with a holistic view and several more opportunities for reduction.
Much of the discussion usually revolves around the savings in operational costs by optimizing energy use and mitigating food waste whenever the subject of financial opportunities in sustainability is on the table, however we can argue that there’s so much more to it, especially after hearing firsthand from 3 representatives in Food Service speak on this in our last webinar. From it, we understood that sustainability is less and less considered to be just a nice-to-have and has now become a key business criteria for players in restaurants and collective catering. Read on for the financial opportunities:
Low-carbon dishes, predominantly plant-based, offer a lucrative advantage for food service players due to their higher profit margins. As these dishes rely on plant-based ingredients, which are generally lower in costs compared to animal-based products, they inherently offer better margins. According to Alexis Papon, the CSR Director of Elior, they have observed that meat products are not only carbon-intensive but also more expensive to put on menus. There is also a study that debunked the misconception that sustainable diets are more expensive and unaffordable. By promoting these low-carbon dishes, you not only increase the opportunity for better margins in your sales mix but also reduce the weight of carbon emissions from your food inputs.
One’s climate performance is now becoming more and more mainstream when it comes to financing. Especially in the EU where CSRD is mandated, financial firms are employing diverse strategies to reduce their exposure to climate and carbon-related risks. While some investors focus on "greenifying" their current investments, others aim to mitigate climate risks or direct funds specifically towards environmentally-friendly ventures. A better environmental performance also increases interest from more investors as ESG (Environmental, Social and Governance) is now a factor in investment decisions.
According to Florent Lunel, the F&B Director of Big Mamma Group, their restaurant group’s climate performance plays a significant part in their financing with their carbon footprint included in their debt covenant. By being proactive and reducing their own environmental impact, they are able to negotiate lower interest rates.
Embracing sustainable practices sets food service businesses apart from competitors in a crowded marketplace. Highlighting eco-friendly initiatives, such as offering low-carbon menu options or procuring ingredients from sustainable sources can be a compelling selling point that attracts customers and fosters brand loyalty. A joint research by McKinsey and NielsenIQ found that creating more sustainable products has not just become a moral imperative but also a solid business decision with consumers showing willingness to back it up with their wallets.
A testament to this is Sweetgreen, one of the rapidly-growing fast-casual chains in the US that has now expanded to 140 restaurants. By offering a menu rich in plant-based options, Sweetgreen claims that their menu carries a carbon footprint 30% lower than the average American diet. This sustainability-driven approach resonates with their target consumers seeking nutritious, environmentally-conscious choices that contribute to reducing their own carbon emissions and they have since been able to successfully widen their profit margins where their fast food counterparts struggle.
When it comes to reducing your Scope 3 emissions, environmental accounting of your recipes opens up economical options for sustainable sourcing of your raw agricultural ingredients and produce. Sustainable sourcing is a short to medium-term investment, as empowering farmers to transition to more sustainable agricultural practices requires financial support. However, it improves the overall environmental impact across your recipes and secures your food inputs for the long term, thereby reducing your supply chain risk.
Juliette Delannoy, the CSR manager of Foodles, shared a concrete example of this. Through their carbon credits, Foodles financed sustainability projects at a local dairy farm, helping farmers test new agricultural practices such as crop rotations and addressing animal welfare issues. This initiative not only fostered a stronger relationship with their supplier but also ensured a stable supply of sustainable ingredients.
Similarly, Florent from the Big Mamma Group shared a concrete example of the economic benefits of maintaining close relationships with their producers. Despite facing immense inflationary pressure, where the food service industry saw purchasing costs rise between 15% and 25%, Big Mamma Group managed to keep the increases below 10% thanks to their long-term partnerships with suppliers. These robust relationships not only supported environmental responsibility but also provided economic stability during challenging times.
In summary, embracing sustainability practices like recipe evaluation isn't just about doing what’s right for the environment; it's an increasingly smart business strategy. By leveraging LCA to assess and enhance environmental impact, food service players can explore benefits such as cost savings, better terms for financing, enhanced brand reputation, and reduced supply chain risks. Integrating automation into sustainability efforts isn't just about following a trend—it's about staying competitive and future-proofing in a market where sustainability is gaining importance.
Learn more about how Food Service players are implementing this in their sustainability strategy by watching our webinar.
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