Ingredient Missing from Restaurant Sustainability

I found interesting in a new survey by the National Restaurant Association: that only 39% of restaurants overall recycle plastic, cans or glass.

This includes nearly half of all full service restaurants, but only a third of quick service restaurants (fast food.)  The percentage that recycle cardboard and paper goes up to 67% and 66% respectively.

Around 61% use products made from recycled materials but only 4-in-10 use products that could be composted.

In fact, only 17% compost food waste, although 75% regularly track the amount of food waste.

A 2012 report noted that food serve operations alone lost 86 billion pounds of food in 2008 or 19% of the U.S. retail supply.

Between 4 to 10 percent of food loss in restaurants is lost during kitchen preparation.  Diners waste, on average, 17% percent of meals or more only 45% is taken home as leftovers.

Only 22%, including 20% of full service restaurants, donate leftover food to food banks or other groups.

This contributes to the fact that 40% of the nation’s overall food supply is going to waste each year.

On average, each American wastes 209 to 254 pounds of edible food each year.  In the Eco Pulse survey last year, 39% of Americans felt the “most green guilt” over wasting food.

One area of “sustainability” conspicuously missing from the NRA survey is the number of restaurants paying at least a “living wage.”

For nearly two decades now, how businesses treat people has been one of the three pillars of the “Triple Bottom Line” of sustainability.

In a poll of small businesses this year, 61% of those in the restaurant or retail industries supported raising the minimum wage.  Of course the minimum wage is nowhere near the livable wage which is computed specifically by areas of the country.

The restaurant business is tough, especially for locally-owned chef-driven restaurants that give places such as Durham, North Carolina where I live a “foodie” reputation nationwide with visitors, a characteristic now cited as important on “intensity” indices by leisure travelers including 71% of Millennials.

But so is sensitivity to prices.

As noted by the Durham News Service, a new breed of local chef-restaurant owners in Durham are now leading the charge across the nation to voluntarily pay their co-workers a living wage.

It is based on the sound business principles such as paying people a living wage and a sense of fairness resonate just as much with residents and visitors here as using locally sourced foods.

Polls by both Gallup and Harris Interactive, show that among the several industries in the tourism sector, restaurants are viewed well above average with a net positive of 60 points and 53 points on public opinion polls respectively.

But that doesn’t mean this handful of distinct industries shouldn’t work on improving outdated business models to be fairer when it comes to treatment of employees.

By nearly 4 to 1, Americans are now more likely than in the past to investigate business behavior before buying including 6-in-10 who decide not to do business with an entity based on how it conducts itself and 7-in-10 who talk about it in conversations with others.

If you think that won’t matter, just ask the NFL.

The Circular Economy is No Place for Whiners

Regulations aren’t designed to set the best standards, only the minimum bar for those who seek benefit at the expense of the general public.

It is typically those who are part of the “whiner” economy who make a fuss about regulations.  Everyone else cleared that regulatory bar long ago and strives instead for best practices.

One of those best practices is the movement toward the “circular economy,” as described in an article this month by McKinsey alum Markus Zils.  Those who fuss about regulations typically take more of a linear approach.

The circular approach is just better business.  It seeks to preserve the “embedded labor, material and capital costs.”  This is true of organic as well as technical materials.

It isn’t just about recycling by breaking down and reusing the products but also involves refurbishment.

The short term benefit is better profit margins but the long term benefit is a “decoupling of the economic growth from material intake.”

Often called the “triple bottom line” or “full-cost accounting,” the improvements aren’t just in manufacturing.  You saw it at work this week when CVS decided that selling tobacco didn’t make sense for a company in the business of providing healthcare services.

At the same time, undeterred by gridlock among nation states, fifty-nine mega-cities around the globe that have banded together to address climate change issued their annual report.

Even McDonald’s is moving toward more sustainable, antibiotic-free beef for its burgers, hopefully by 2016, a movement led many years ago in that food genre by Chipolte.

This even gives hope that marketers for the largest enabler of roadside billboards may one day connect the dots about the harm they are doing by enabling the sacrifice of the equivalent of a good size national forest as well as blighting neighborhoods and property values.

The marketplace likes sustainability.  A CDP report two months ago to inform investors, noted that nearly 30 of America’s largest global corporations - including five major oil companies - aren’t waiting for the U.S. Congress either.

They are incorporating a price for carbon emissions into their long range plans.  The free market isn’t ideological and “whiner” economics, relegated to seeking favors from lawmakers, just isn’t good business.

Reflections on a $1.6 million Weekend Sacrifice

Trees and vegetation are retained or planted by savvy commercial developers as a means of increasing the value of their property.  In Durham, NC where I live, certain standards must also be met to minimize the harmful effects of impervious surface such as parking lots.

It is all about safeguarding air and water quality, part of what economists measure as ecosystem services.  It is also about preserving sense of place which is crucial to leveraging economic development including tourism which in turn increases the value of commercial property.

Last weekend, on my way into a restaurant for breakfast, I noticed a crew in front of an Outback Steakhouse chopping down and grinding up 10 or more large trees between the roadway and the restaurant’s parking lot.

The trees had probably been planted when the property was first developed. From the location, it appeared this row of trees was being sacrificed to make the sign on the building more visible from a nearby highway.

All tolled, those trees represented $1.6 million dollars in ecosystem services such as absorbing, cleansing and slowly releasing storm water polluted by impervious surface.

Economists have also documented the tens of thousands of dollars that such trees each add to property values.  I wondered to myself if either the restaurant or the property owner had weighed these costs and benefits as part of the decision to butcher the trees.

Once the trees had been converted to chips and loaded for transport and disposal, the crews added insult by failing to be cover the trucks loaded with debris as required by law.  I doubt that particular driving hazard and the resulting roadside cleanup had been factored into the decision either.

Hopefully the owners will plant new trees that will grow to at least 50’ in height and canopy spread so they are able to replace the ecosystem services lost by those that were chopped down.

However, I won’t be surprised if they are replaced instead by smaller varieties that are neither native to this area, nor of the same value to the community.  The smaller varieties are not nearly as effective, if at all, at offsetting the impact of impervious surface.

Two new studies were released last year on the value of on-premise signs.  One was conducted on behalf of The Signage Foundation by researchers at the University of Cincinnati with a focus on economic value.

Another deeper analysis by researchers at Villanova University focused on the effectiveness of on-premise signs as marketing devices.

According to the first study, enhancing the visibility of on-premise signs is second only to redesign in popularly with business owners as a means of generating more revenue from a location.  Taken together, the various changes in on-premise signs result in an average increase of 12% in sales and transactions and 10% in operating profit.

So on average, making the sign for Outback Steakhouse more visible could mean an annual increase of $360,000 in sales or a tad more than 20% of the value of the trees that were sacrificed.

To put this in perspective, full-cost accounting could mean that the Outback Steakhouse in Durham would reinvest a little more than $53,000 each year from those sales for 30 years back into tree-planting that would balance impervious surface in that area.

The second study also found that on-premise signs are much more effective and two and a half times less expensive than outdoor billboard advertising.  They also outperform the use of television, radio, print or the Internet as market tools.

More revenue is critical to Outback Steakhouses, which under the newly created umbrella Bloomin’ Brands Inc. issued an IPO last year.  Now rated the #1 steakhouse in the nation, the chain was founded in Tampa, Florida in 1988 by four friends in the hospitality business.

A few months later I was recruited to jumpstart the community-destination marketing organization in Durham.  Back then, Wall Street was focused on overall company growth.

Today, Wall Street is more concerned about individual location revenue growth, leading Outback to permit managers, who also share in profits, for the first time to open for lunch.

Not opening for lunch had been one of the pillars for the company’s culture because profits for that time period are negligible and they wanted staff to have a life outside the restaurant.

Unfortunately, Wall Street hasn’t yet calibrated to full-cost, triple-bottom-line accounting and the no-lunch pillar was sacrificed for the same reason those trees were last weekend in front of the Outback in Durham.

Full-cost accounting would take into account the costs generated by impervious surface, which are pushed by developers and businesses off onto government and taxpayers.  Government tries to hold the line by requiring trees and vegetation to compensate but the ordinances are weak and not very well enforced.

Most areas where Outback Steakhouses are built are devoid of community sense of place.  I often found myself stopping for the night near one during my handful of 6,000-mile road-trips taken over the the past three years.

These commercial ghettos are new, but they nearly all look identical in design, layout and architecture as well as tenants.

It is too late to worry about the loss of sense-of-place that these areas create for communities but it is not too late to worry about requiring more of them to offset the costs of impervious surface they push off on the general public.

A recently released study for the National Forest Service by scientists David Nowak and Eric Greenfield, based in Syracuse, NY, has quantified both the amount of tree cover and the amount of impervious surface in each state of the United States as well as in urban and community areas overall.

In the urban/community areas where these cookie-cutter commercial ghettos are built, there is now 18 million acres of impervious surface, about 15% of land area, compared to the national average of 2.4%

In North Carolina, these areas have an even higher percentage of impervious surface.  Statewide the ratio of surface covered by trees compared to impervious surface has dropped to an alarming 3.3 to 1.

Even more alarming is how ineffectual local and state governments are.  Ordinances to bring balance to the marketplace are woefully inadequate and even more poorly enforced.  Pro-market enthusiasts such as me sense the playing field isn’t balanced nor inclusive of costs.

As our air and water quality and sense of place degrades, the electorate seems weary, burned out and seemingly detached.  Elected officials if they are aware or care at all, seem even more so.

All of this is to say that we are in desperate need of full-cost accounting.  Brands such as Outback are proud of their commitment to quality of life in the communities in which they are located.

What better way to demonstrate this than to dedicate that commitment to the fostering and preserving of sense of place as well as working to set an example for how businesses can incorporate full cost accounting and the triple bottom line.

More Than Disappearing Mountains

Last August as Mugsy, my English bulldog, and I guided our Jeep on an ascent into the Rocky Mountains for an annual lake rendezvous with family.  I wasn’t the only traveler to remark that the mountains that usually form a backdrop to Denver were invisible and apparently had been for some time.

Those of us native to the Rocky Mountain west realize that Denver is more in the High Plains than the Rockies. The only difference between there and Kansas or Nebraska is that you can usually see them from there.

The view of the mountains from Denver last August was obscured by haze from one of the 3,527 weather records broken in the US alone last year, this one for heat.

The mountains were further obscured  with smoke from a nearby forest fire.  But the view isn’t the only thing disappearing from that part of the world.

Ground water is rapidly deleting.  That means it is being pumped out faster than it can recharge.  According to a study released last year, some parts of the High Plains will be unable to support crop irrigation within the next 30 years.

Many officials tragically make the mistake of believing that because their communities rely on surface water from streams, rivers and lakes, such as Durham, North Carolina where I live, that they are immune from issues surrounding ground water.

However, ground water and surface water are interdependent.  Streams and rivers are not only the beneficiaries of ground water but they also contribute to it.  It is a mistake to believe that a process such as fracking won’t be hazardous just because a community relies primarily on surface water.

Where I grew up in the nook of Idaho framed by the Tetons, Yellowstone Park and the Continental Divide, water that has percolated for thousands of years through volcanic rock spews back out of the ground at 120 million gallons per day from a place appropriately named Big Springs, fueling the 127-mile Henry’s Fork of the Snake River.

Half way across my native Fremont County, Idaho, the famed fly-fishing river spills over both the Upper Mesa and Lower Mesa Falls, out of the mountains and down across the Snake River plain to its rendezvous with the South Fork near Idaho Falls.

The Snake River arcs just under the southern edge of Idaho’s 80 recognized mountain ranges to its rendezvous with the Columbia River and then the Pacific Ocean.  But the 10,000-square-mile Idaho aquifer the huge river dissects -- the one “famous for potatoes” -- is imperiled.  

Holding as much water as Lake Erie, since the start of this century it has been in crisis with more water being pumped out than the system can replenish.  Idaho is nearly covered by mountains, huge rivers and glacial lakes, yet 96% of the population is dependent on ground water for domestic water needs.

Ground water isn’t just at issue in the western United States.  Across the nation, ground water accounts for 22% of fresh water withdrawals, 37% of agricultural use, 37% of public water supply withdrawals and 51% of all drinking water for the total population.

More and more ground water is being depleted for industrial purposes.  Fracking is not the only industrial risk from ground water mining.

Some states such as Oregon have began to create “water banks, much as we have a national petroleum reserve.  Other communities such as Pocatello, Idaho are preparing to inject treated wastewater back to help recharge aquifers.

Every community should be looking at dual-water distribution systems such as those pioneered by St. Petersburg, Florida in the late 1970s and early 1980s. Relying on simply discharging treated wastewater back into rivers and lakes fails to grasp the full hydrologic cycle.

It is estimated that failure to act on climate change is creating an annual drag of $1.2 trillion in forgone prosperity, 1.6% of all global GDP.  Yet, the issue of desertification is not limited to the American west nor is it all about the increasing heat.

A new breed of “green” cattle rancher is riding to the rescue, using technologies practiced by wild buffalo herds to preserve grassland and reclaim land and ground water as well as reduce greenhouse emissions by using techniques that were used by my great-grandparents from both sides of my lineage.

Other westerners such as those working in the Western Wastersheds Project are working to bring free-market, full-cost (triple-bottom-line) accounting to the use of public lands for grazing as a means to do the same.

It is much too early to wonder as author Mark Binelli did last month, after witnessing disappearance of the same mountain view, “Will the West Survive?”  But it may be time for another road trip!

Walking The Ethical Tightrope

Everyone inadvertently has brushes with ethical issues, but it isn’t uncommon to come across people, even friends, who seem to walk that line like a tightrope.  They stand out because they are never, ever going to admit they are wrong and rather than become self-reflective when challenged they get indignant and self-righteous.

Their vehement protests remind me of a quote by Ken Blanchard in the book entitled The Power of Ethical Management that he co-wrote with Norman Vincent Peale and published 24 years ago, a year before I was recruited to Durham:

“There is never a right way to do the wrong thing.”

Dr. Rushworth Kidder, who founded the Institute for Global Ethics in 1990 a few months after I arrived in Durham to jumpstart the community’s destination marketing organization passed away earlier this year.

He was an inspiration as my colleagues and I assembled what became a “best practice” code of ethics to guide the staff and board of that highly accredited community start-up and I often used a quote he penned and eventually used in his book entitled How Good People Make Tough Choices that defined ethics as “obedience to the unenforceable.”

It is too bad so much time is spent covering corporate slime balls, especially some of those in today’s financial sector, where a recent poll revealed that 1 in 4 believe they may need to engage in unethical or illegal conduct to be successful.

The real news is that there are so many other incredible examples of corporate responsibility.

A leader in corporate responsibility is Tim Mohin (pictured in this blog) who received his Master’s Degree of Environmental Management here in Durham in 1984, the same year that my friend Mike Schoenfeld also graduated from Duke and, coincidentally,  a very forward thinking Durham City Council banned roadside billboards.

Mohin heads CR for AMD as he had done in the past for Intel and Apple and just wrote a book entitled Changing Business from the Inside Out: A Tree-Hugger's Guide to Working in Corporations. 

Two months ago Mr. Mohin returned to Durham to speak to graduates of Duke’s School of the Environment, and I’m sure he was impressed by the university’s Sustainability Policy, adopted in 2005 which continues to be integrated with the community’s values by Schoenfeld who returned to Durham four years ago to serve as Duke’s a vice president over public affairs and government relations.

Ethics and sustainability go hand-in-hand as Mohin explains in his book because corporate responsibility is “an aggregation of environmental, social, ethics, communications and other disciplines” and measured by the “triple bottom line of economic, environmental and social performance.”

Many today still try to exempt corporations from ethics even as they insist they should have free speech and freedom from transparency.  But corporate thought leaders such as Timothy Mohin may agree more with business consultant Hardin Tibbs who wrote recently in FutureProof that:

“the global industrial economy will collapse within 20 years if we don’t reinvent it to work on different technological principles.”

Or as Dr. Kidder once wrote: “We will not survive the 21st century with the ethic of the 20th Century.”

Even small community organizations such as the Durham Convention & Visitors Bureau (DCVB) where I was CEO until retiring several years ago, followed by associations such as the Durham Chamber have committed to triple-bottom-line corporate responsibility signified by achieving Green Plus Certification.

But certifications such as these are far more than a mere accolade or something to check off a to-do list.  They provide an on-going diagnostic through which to filter and evaluate an organization’s past and future policies and activities.

I smiled a week ago when, during a live concert here in Durham, the band Crosby, Stills & Nash kept a classic for last.  Unfortunately, the late Jerry Garcia wasn’t there to repose the incredible steel guitar intro on the 1970 recording but who can forget a part of that first stanza:

“You who are on the road

Must have a code that you can live by

And so become yourself”

All of this may be lost on those who ethically tightrope.  They tend to live on a one-way street where any means justifies the end of checking something off the list.

But the best advice should you ever catch them when they are receptive, maybe even reflective is to offer in friendship one of the several tips in Blanchard’s book:

“A combination of pride and humility (thinking about yourself less and others more) helps you focus on the right priorities.”

They may not immediately come down off the tightrope but hopefully they will see that, when it comes to ethics, we can all trip up on occasion.