Food spoilage increases expenses and reduces both the amount of net income a food truck earns in a given month as well as its cash flow. Food spoilage occurs any time ingredients or food must be thrown away because it is passed the expiration date, has been improperly stored or prepared or has been determined to be unusable for any other reason.
To minimize spoilage and maximize your profits, you should have a plan for tracking and managing your food. These procedures will also be critical to ensuring compliance with IRS reporting. If the IRS believes a food truck is improperly reporting food spoilage or using food spoilage write-offs to avoid taxation, it may trigger additional scrutiny or even an IRS audit. A Chronicle Newspaper article reported that “food spoilage rates above 8 percent may appear suspicious to auditors.
Here are six tips for reducing food truck spoilage:
1. Ensure Proper Storage
On a food truck, storage space is at a premium. The more carefully you account for the type of refrigeration and dry storage space that will be needed to properly store ingredients and food, the more you can prevent food spoilage due to improper storage conditions.
2. Using Food Stuffs by Date
Organize food so that it can be used before its expiration date. Place the items that will expire first toward the front of the shelves so you reach for those first.
3. Regulate Temperatures
As a new food truck owner it’s important to educate yourself on the ideal storage temperatures for foods you will use and serve to customers.
4. Inspect All Orders
Another simple but sometimes overlooked way to reduce food spoilage is to inspect all food and ingredients carefully, whether you are buying them yourself at a retail outlet, farmers market or restaurant supply or they are being delivered by a vendor. Don’t be afraid to reject an item or request a replacement if food or containers appear compromised.
5. Plan Precisely
It can be tempting to order more food or raw ingredients than you need – after all, you don’t want to run short. However, the more precisely you are able to project future sales based on sales trends and plan food purchases accordingly, the less likely it is that food will go to waste. As a food truck owner, be zealous in understanding your truck’s sales trends so that you can become an expert purchaser – over time this skill will save your business big time.
6. Opt for Longer-Lasting Alternatives
As a food truck owner, you may be able to reduce food spoilage and increase profits simply by opting for menu items whose raw ingredients last longer than others. It might be advisable to take some menu items off the menu during hotter (or colder) months if those conditions are not optimal for food storage. Likewise, your food truck could choose to limit availability or quantities for menu items whose ingredients expire more quickly, and use limited supply of these menu choices to your marketing advantage.
What about you? If you are a new or aspiring food truck owner, what type of food truck would you most like to own, and why? Share your ideas below or tweet it to us @KabbageInc.