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On-premise or “cloud” kitchens — The restaurateur’s dilemma

“I’m thinking of closing this place down. People don’t want to leave the house in this weather. They want their food delivered.” Barry (name changed) spoke sadly as he watched the empty chairs and tables in the restaurant on a cold rainy day. Barry has been running this very popular Mediterranean food joint in Fremont, for the last four decades. Unlike a lot of his brethren, Barry had held off signing up with any of the online food delivery services. “It is hard to pay the lease and pay the employees as it is. Signing up would leave me with very little money” — he added.
Stories from a restaurant’s kitchen are hardly ever told. And so few understand that the food delivery services are actually hurting the restaurants more than you can imagine. Restaurants pay a hefty price for being on the map for any online food delivery service provider, thereby shrinking their already slim margins.
Then why do they sign up with them?
“No Maitreyee, what to do? If I don’t sign up with them, they will sign up someone else, xyz. And people will not buy from me. I will lose a customer”. Sunny gushed in a typical South Indian accent, an accent that defined him. He runs an Indian food restaurant in (funnily enough) Sunnyvale.
William (name changed), the owner of a pizza place in Santa Clara, was more expressive than most others. “I hate UberEats” he said vehemently. But they bring me so much business. And they do a very good job on delivering in very little time”.
Restaurant owners run their businesses on very short margins, if any. In the Bay Area specifically, rent and minimum wage squeeze out every penny from them. And the sneaky increases in produce costs are not helping. And if you ask them, they prefer customers coming to the restaurant and eating rather than delivery orders.
Today, most restaurants are seeing about 20% of their orders coming from online food ordering services. With the kind of promotions and subscriptions the delivery providers are offering, this percentage is likely to increase. Various research reports also have touted online ordering and delivery as the number one change that the restaurant industry will experience in 2019. Sure they are seeing an increase in revenue from the orders but at the end of the year the margins would be in the red.
The question then is how will restaurants survive the massive invasion into their margins by food delivery apps.
“I told those guys that my prices for their app will be higher than my sit-in prices”. Jorge (name changed) who runs a dainty little Greek restaurant in Sunnyvale shared his conversation with one of the food ordering apps. Truth be told, raising prices of their dishes, forms the perfect recipe to drive away customers from their restaurant.

Then there is the big elephant in the room — rents. Most restaurateurs I have spoken with, run on a month to month lease. Restaurateurs would be lying if they say cutting down on the sit-in space has not crossed their mind. They are very well aware of this possibility, but they are hoping that it will not be them.
But realistically speaking, the day is not too far, when restaurants will completely close the sit-in area and provide only food delivery. Why spend on a kitchen when you can rent kitchen space? Commissary kitchens anyone? Mind you, this is not just my imagination taking you for a ride. Travis Kalanick, the co-founder and ex-CEO of Uber has already started Cloud Kitchens, which enables restaurants to share kitchens to serve deliver-only orders. “Cloud Kitchens” is up and running in Los Angeles and infact are ready to spread to China.
So just like most business owners are debating whether to take their data to the cloud or keep it “on-prem”, restaurateurs are contesting whether to keep to serve food “on-prem” or in the cloud. At the end of the day, they have to think about what will bring home the bacon!
#restaurant#fooddelivery#cloudkitchen#bayarea#restaurateur#sf#sanjose#santaclara#yum#foodwaste#followbigzpoon
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Converting Restaurant Food Waste into Profits for all!
In the last blog, we talked about the global food waste problem and its social, economic and environmental impacts. About 40% of worldwide food waste originates from the restaurants, thus making them the largest contributor.
Can we do something to help restaurants to reduce their food waste? Absolutely!
Modern technology has helped solve many such global problems in innovative ways that were unthinkable a decade ago. At BigZpoon, we have developed a technology solution that helps mitigate restaurant food waste problem in a way that is profitable to restaurants and diners alike. We believe that broader adoption of this solution by restaurant and diners would lead to a significant improvement to our environment by the way of reduction in carbon footprint caused by food waste.
Double Clicking on Restaurant Food Waste
At restaurants, food waste happens in many ways. The examples of waste that is not recoverable are cooking mistakes and leftovers from diners’ plates. However the larger percentage of restaurant food waste happens due to unsold or surplus food, which is totally recoverable!
Restaurants end up with unsold or surplus food inventory because of various reasons such as improper planning or factors such as weather conditions and other events that reduce the customer traffic into the restaurants. The challenging thing about it is that it happens in an unpredictable way. Every restaurant faces this situation several times in a week, and they are left with surplus food on hand that has limited shelf life. They are forced to throw away the unsold food because of regulatory reasons, even though it may be not be spoilt.
The interesting thing is that most restaurants are willing to sell their surplus at discounted prices but they cannot find the last minute customers. None of the existing online food ordering systems (GrubHub, DoorDash, UberEats etc.) give restaurants access to their customers. On the other hand, there are plenty of budget and price conscious food buyers everywhere who are looking for good deals but are not aware of such last minute hot deals.
As you can see there is a supply and there is a demand but there is no bridge that connects them before the time is out. At BigZpoon we saw this opportunity and we created a technology solution to fix this problem.
How BigZpoon solves Restaurant Food Waste problem
BigZpoon provides to the restaurants a new sales channel that bridges the gap between supply and demand of discounted surplus food. This is an on-demand sales channel that is completely under the control of restaurant operators. They can decide when, how long and for how much quantity to open up the channel.
This sales channel is nothing but an ability to send real time notifications via push, text and e-mail messages to inform diners about availability of hot special deals. The diners in turn can take advantage of such deals by ordering food using BigZpoon mobile apps.
Here is how the process works:
Using BigZpoon app, the restaurant operator publishes a special offer on one of their menu items. They specify when the offer starts and ends, how much discount and how many items are available at discounted prices. BigZpoon analytics helps with dynamic pricing algorithm to maximize probability of sale.
BigZpoon platform looks for diners that are currently within certain distance from the restaurant and notifies them about the special offer
Interested diners click on the notification and place order using BigZpoon mobile app. BigZpoon platform accepts the offer only if specified quantity has not been sold yet.
Restaurant is notified and the food is packed.
Customer is notified through mobile app
Customer picks up the food or the food is delivered
Think about it as a time limited, quantity limited digital coupons that the restaurants can distribute to their customers when and only when they see the need. This simple yet effective approach changes the game by finding last minute customers for restaurants and last minute deals for the diners. Restaurant benefit from increased revenue and reduced waste, diners benefit from savings on food purchases and the environment benefits from reduced greenhouse gases. It’s a WIN-WIN-WIN!
In summary, BigZpoon stands out amongst the crowded landscape of online food ordering apps because of it’s (patent pending) feature that enables restaurant operators to market to their customers on demand and it’s dynamic pricing analytics capability. Please download the BigZpoon app and join us in our fight against food waste.
#followbigzpoon#SJSU#SCU#saveplanetearth#surplusfood#foodrescue#foodwaste#fightfoodwaste#sustainability#saveourenvironment#saveearth#sjsueventcenter
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Understanding Food Waste
Humans are the most wasteful creatures on the face of Earth. I believe that wastefulness is a natural byproduct of plentifulness, abundance or oversupply. Scarce things are very rarely wasted. While abundance is a boon and sign of a healthy society, it does have a darker side…….waste!
Waste happens when anything that is produced does not get into the hands of its consumer before it reaches the point of perishability. To understand why waste happens and how it can be reduced, one must understand the hurdles in the journey of a product from its producer to its consumer.
Food Waste Problem
Food is no exception. In fact, food waste is a huge global problem but very few of us are aware of the magnitude of it. If you look at the global food waste statistics, you will find that per capita food waste is comparatively larger in wealthier and advanced countries. Here are the numbers:
Some interesting facts about food waste:
About one third of the food that is produced in the world is wasted
If food waste was a country, it would be the third largest country emitting the green house gases after China and US
About 40% of the food waste originates from the restaurants
Food waste has ~10% negative impact on restaurants’ profitability
Sources of Food Waste – The Leaky Food System
To understand how and why the food waste happens, we need to look at the journey of the food from its origin to destination. Think about it as a leaky pipe between a farm or a slaughterhouse and your dinner plate. The leaks are in packaging, transportation, storage, cooking, surplus management etc. And as a result these leaks, only two thirds of what entered the pipe, reaches your dinner plate. Anything that leaks out is a waste!
The term “food” includes vegetables, fruits, meat, other ingredients (spices, nuts, preserved items etc.) and prepared food. Figure below shows various leaks in the system as the food journeys from a farm or slaughterhouse to diner’s plate.
Some leaks are unavoidable. For example, if the quality of fruit crop is not good due to unfavorable weather conditions, there is not much you can do to avoid the waste. However, some leaks (shown in red above) are preventable because they happen due to improper handling, improper planning or negligence.
Implications of Food Waste
There are economic, environmental and social implications of food waste.
From the economic perspective, there is a direct impact on profitability of everyone involved in the food supply chain. For example, food waste has up to 10% negative impact on profitability a restaurant, a significant number given thin margins with which the restaurants operate.
And what happens to this wasted food? Most of it ends up in landfills, where it contributes to the greenhouse gas emissions. Nearly 8% of greenhouse gas emissions worldwide are caused by the wasted food, making it the largest contributor after automobiles.
There are social implications as well. While there is so much of “avoidable” food waste happening, there are plenty of hungry, low budget people everywhere in the world. This social imbalance is due to inefficiencies in the food supply chain.
What can we do about it?
Citizens of the world need to work together to address the food waste problem. Doing so will not only help improve our environment but it can also help bring some social balance by channeling avoidable food waste to the plates of underprivileged population segments. The solution boils down to identifying the inefficiencies in the supply chain and designing solutions to remedy them.
Fortunately, recent technological advances have made it possible to address many such problems in very innovative ways. For food waste problem, there are some technology-enabled solutions already in place. A company called Imperfect Produce picks up “ugly” produce from farms and delivers it to consumers at discounted prices. At BigZpoon we have developed an innovative way to help restaurants manage their food waste and create win-win-win for restaurants, diners and our environment!
More about that in the next edition….
#followbigzpoon#sjsu#scu#saveplanetearth#surplusfood#foodrescue#fightfoodwaste#sustainablescu#sjsueventcenter#foodwaste#food waste#save our environment#save our earth#saveearth
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Greener planet, one meal at a time
As the co-founders of BigZpoon, we wanted to use our strong technological background to address a huge global problem of Food Waste.
Food Waste, the Big Evil
The Food and Agriculture Organization (FAO) of the United Nations, which monitors what’s grown and eaten around the globe, estimates that one-third of food produced for human consumption worldwide is annually lost or wasted along the chain that stretches from farms to processing plants, marketplaces, retailers, food-service operations, restaurants, and our kitchens.
This amounts to roughly 1.3 billion tons of food, worth nearly $1 trillion at retail prices. That is enough sustenance to feed three billion people.
In the United States, the waste is even bigger: More than 30 percent of our food, valued at $160 billion annually, isn’t eaten.

Environmental impact of Food Waste
Aside from the social, economic, and moral implications of that waste—in a world where an estimated 805 million people go to bed hungry each night—the environmental cost of producing all that food, for nothing, is staggering
If food waste were a country, it would be the world’s third largest emitter of greenhouse gases, behind the U.S. and China.
Once this food gets to the landfill, it then generates methane, a greenhouse gas 23 times as potent as carbon dioxide in trapping heat within our atmosphere.
According to the U.S. Environmental Protection Agency, landfills account for 34 percent of all methane emissions in the U.S.
For every pound of food waste thrown in landfills, 3.8 pounds of greenhouse gases are emitted, and with 97% of food waste heading to landfills, this leads to severe consequences.
Landfills, where our food waste ends up, are taking up large amounts of land and polluting any soil or water in the area.
The waste we throw in landfills and the fertilizers we drown our crops in are polluting the underground water in these areas, as well as the water bodies that this water streams to.
The energy that goes into the production, harvest, transportation, and packaging of wasted food produces more than 3.3 billion metric tons of carbon dioxide.
Food Waste in Restaurants
Food waste is not just a problem in America, but across the globe. About 1.3 billion tons of food are wasted globally each year, and around 40% of that comes from restaurants.
A study by the Food Waste Reduction Alliance found that 84.3% of unused food in American restaurants ends up being disposed of.
BigZpoon’s fight against the Big Evil
BigZpoon came up with a win-win-win solution to reduce the food waste in restaurants. We have built a cloud and app based platform:
It allows restaurants to reach to their customers with instant discounted offers for their unsold fresh food that would otherwise would be thrown away.
It allows consumers to purchase discounted delicious food from their favorite restaurants using their mobile devices.
With this solution, everyone wins:
Restaurants win by turning their surplus and unsold food into more customers, higher revenues and better margins for their business.
Consumers win by getting their favorite food from nearby restaurants with substantial discounts.
Our Planet Earth wins with reduced food waste, green gas emission and pollution.

Join us in our battle against Food Waste
As a consumer, you can:
download our app and start rescuing good food.
spread the word to your friends and family for awareness in our mission
volunteer to join our referral or internship programs
ask your favorite restaurants to partner with BigZpoon and put their restaurant on the BigZpoon map.

As a restaurant owner, you can:
register your restaurant to be on our map.
publish your entire menu on BigZpoon Platform
create instant offers for your unsold food at the end of the day, during slow days or hours.
Let us know if you have any questions, comments or want to partner with BigZpoon to fight against this Big Evil: the Food Waste.
You can contact us at:
[email protected] (415)-251-3333
www.bigzpoon.com
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