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Airline F&B: The Waste Opportunity

April 04, 2022
Author Michael RaaschMichael Raasch
CEO, Omnevo

To be honest, I thought at first that it was an April Fool joke - but researchers at UC Berkeley have genuinely managed to convert airline food waste into aircraft fuel! Thankfully, this process doesn’t mean that flight crew must gather the leftovers to power the aircraft – or that the guy in Row 7 can’t have a dessert because the plane’s low on fuel - but it illustrates how there are always ways to find new solutions to old problems.

Food waste has long been a huge problem for airlines – and it’s getting bigger.

Already challenged by major initiatives on aircraft emissions, the rising global focus on sustainability requires airlines to demonstrate their ability to address the food waste issue too – but, of course, every new initiative imposes costs.

Already hit by the prolonged COVID crisis, many airlines are currently in a very tight position in terms of income, resources, reserves, and staff, making it very difficult for them to fire-up any new performance-driving initiatives, especially as many airline managers feel that they have pared their operations to the financial bone as they hang on for the post-COVID recovery.


COVID is unique and it’s still having a huge impact, but it’s also simply yet another crisis. From volcanoes to SARS to regional conflicts, aviation has faced many in the past - and will face many more in the future.


In fact, just as we see light at the end of the COVID tunnel it’s already being overshadowed by the latest crisis, following the invasion of Ukraine. Carriers face major cost implication, include oil and energy price surges, the forecast of higher food prices, grain shortages, rising transport costs, disrupted supply chains, regulatory changes on supply chains, tighter monetary policies driving interest rates up, etc. It’s yet another crisis, another pressure on performance - and another imperative to respond.


Many airline teams have already become more nimble, more responsive and creative in response to the COVID crisis – usually with smaller teams and slashed budgets – and often performing amazingly well in maintaining, or even improving, their operations. Today’s threatening climate forces even greater pressure on airlines to cut costs and operate more efficiently - and food waste is an area where I believe they can make strong and sustained wins.


Some airlines use behavioral patterns and scrape data to help analyze consumption and satisfaction patterns onboard, including AI tracking of behavior over time, routes etc.. This approach can help to predict F&B demand but is a relatively clumsy strategy with limited effectiveness. A smarter and more effective approach is to develop comprehensive Pre-order programs at scale to show their true effectiveness.

There’s a misplaced emphasis within the airline sector that F&B Pre-order will drive revenue. While it’s certainly possible that the improvement the service contributes to the customer experience could raise sales, the key gain for the airline is actually in cost-saving and a raised sustainability performance. Currently, Pre-order pick up rates do vary wildly by region, type of carrier, routes, and service expectations of customers. With some of the big carriers, they are only around 2% but it can become a very strong tool to save money for the airline - and give the passenger better value and a stronger experience.

The passenger perspective is crucial

Consumers’ online interaction, both social and economic, has surged over the past two years.  Across every product area – from Amazon essentials to configuring a new BMW online - they are increasingly tailoring their buying experiences digitally. It doesn’t matter what they’re buying; they expect greater choice combined with a high level of customer service.

 

Just look at the scale and speed of home delivery brands, such as JustEat and the major grocers – their growth has been explosive in the COVID crisis. This isn’t temporary, these operators are responding to sustained shifts in consumer behavior. The best digital buying experiences have become their benchmark for what consumers expect from every brand - and that includes airlines. I don’t think enough airlines are registering this major behavioral shift seriously enough or considering its implications both in the post-COVID recovery and in the years ahead.

 

Those online experiences (many of which are often mixed with interaction with physical stores) are re-shaping the passenger’s expectations of their airline experience. Passengers want the versatility, seamlessness, and reliability of using digitalization to support and enhance their travel experience. They want everything in one place, in their control, at their fingertips 24/7 – on their mobiles.

 

Behavioral shifts within the travel sector are pertinent too. The past few years have also seen a dramatic shift towards pre-planned Travel Retail purchases – reaching around 78% - and the pre-planning of their inflight F&B is a natural extension of this trend. Simultaneously, the same period has seen a dramatic global surge of interest in sustainability, with food and flying both as central elements. This is further reflected in remarkable shifts in diet preferences over the past decade – including major rises in interest in meat-free, vegan, vegetarian, and flexi diets. Alongside this, consumers are increasingly passionate about sustainability measures, including a strong emphasis on reducing food waste and the carbon impact of air travel.

 

That passion can be harnessed to support an airline’s Pre-order F&B program. Despite their professed concerns, research suggests that the reality is that many consumers don’t like to face a financial cost for their environmental impact. A Pre-order (and Pre-select for complimentary F&B) program can incorporate a wider menu to inspire the passenger, including selections to address the expansion in the range of dietary preferences, especially vegan options. Alongside this, supporting information on ingredients, sources, carbon cost, traceability etc. further engages and informs the customer. 

Through past implementations of Omnevo’s platform, we know that airlines can quickly raise their Pre-order levels with appealing product offerings, creating reductions in waste, and this environmental messaging is a key motivator to encourage passengers to sign up. Our catering and supply chain experts can create modeling for the airline to show indications on the achievable savings. The climate cost of flying is obviously a significant issue for many travelers, but the fact that they feel that they’re making a small contribution to sustainability (crucially, at no added financial cost to themselves), can be a surprisingly strong influence on their behavior. It’s basically a ‘free’ way for them to feel good about themselves and to have less ‘guilt’ about flying!


For the airline, the stronger the Pre-order strategy the less F&B is wasted and less weight is carried per flight – creating greater potential savings in costs and higher sustainability gains. With so many airlines developing a wide range of complex and expensive environmental initiatives – from carbon neutral commitments to sustainable aviation fuels – the targeting of F&B waste is a relatively easy win.

Here at Omnevo, we are trying harder to practice what we preach, and not only with our client airlines. At our Wiesbaden HQ, we’ve developed an on-site pre-order program for our own staff canteen and for the F&B service we provide for the industry conferences and events that we host. As with the inflight platform I mentioned, this enables the user to pre-select a meal (from an all-vegan menu), including information on ingredients, water usage, traceability, carbon cost etc. This is simple and convenient to use, it encourages sustainable behavior, and it radically reduces food waste; it’s also less complex to operate, improves customer choice, removes errors (such as ‘sold out’), and is less costly to operate than the previous traditional on-site system.


The UC Berkeley scientists are incredibly clever in transforming airline food waste into fuel, but the fact is that the airlines have F&B strategies available that can make waste a thing of the past.