Unlocking Savings in Hospitality Through Accurate Forecasting with Newton

Food and Beverage (F&B) businesses are a high-stakes game of predictions and preparations. From predicting what will be popular on a given day, to determining how much of each item to prepare, getting it right can make the difference between profitability and waste. 

A common challenge these businesses face is the risk of wastage due to over-preparation, which can significantly eat into their profits. In fact, industry studies suggest that 5-10% of total F&B costs are wasted due to over-preparation, which can easily translate to tens of thousands of dollars annually for an average establishment.

Consider an average F&B establishment with an annual revenue of $1 million.

About 40% of this revenue, or $400,000, goes into F&B costs - ingredients, juices, coffee, and everything else that goes into creating their menu items. Now, imagine losing 5-10% of that to wastage. Some of our clients, like Zuma and Beefbar, even add a 5% buffer on their Cost of Goods Sold (COGs) to account for waste. For instance, if the ingredients for a juice or a lobster pasta cost them $100, they mark that cost as $105 to account for potential wastage. Unfortunately, this wastage often happens due to poor planning.

Let's illustrate this with a common scenario:

It's Tuesday night, and the team is preparing for Wednesday's shift. They ask themselves, "How many chickens will we sell tomorrow?" or "How many Napoli pastas should we prepare?" Using their intuition and experience, they decide to defrost 15 chickens and prepare the sauce for 20 Napoli pastas. But what happens if they only sell 5 chickens and 10 Napoli pastas?

The excess food becomes staff meals or worse, ends up in the trash, and the loss in value piles up. By year's end, this waste can amount to $30,000 - $50,000.

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This is where Newton, our proprietary AI algorithm, steps in.

• Newton crunches vast amounts of data, from historical sales and weather forecasts to social media attention, Google traffic, Google analytics, reservations, and even local airport data.
• It also leverages data from comparable establishments around the world to make its predictions.
• For context, the average chef predicts these outcomes with about 40-50% accuracy. Newton, on the other hand, delivers an astonishing 90% accuracy.
• For the average establishment we've been discussing, this increased accuracy translates to savings of around $15,000 annually. That's an instant 15x return on investment.

The result is a highly accurate forecast of what you are likely to sell for each individual item in the near future. For the average establishment we've been discussing, this increased accuracy translates to savings of around $15,000 annually. That's an instant 15x return on investment.

Preparation is key in the F&B industry, and the more accurately you can prepare, the more money you can save. By leveraging the power of AI and predictive analytics with Newton, businesses can significantly reduce waste, save money, and optimize their operations. If you've been grappling with waste and over-preparation, it might be time to see how Newton can help.