Toast! A Promise of Change: Supporting the Food Industry While Helping Combat Food Waste
By: Tripti Gadgade, Andrew Harvill, Samuel Karanja, and Christina Toscano
Did you know, in the United States, food waste is estimated to be between 30 to 40 percent of the food supply annually (USDA, 2018). If you think this is a small percentage, think again!
This percentage equates to roughly 80 million tons of waste or a $444 billion monetary loss that could have gone to towards creating 149 billion meals in a country where food scarcity is a growing issue (FeedingAmerica, 2024).
To combat this, organizations such as the U.S. Department of Agriculture, Environmental Protection Agency (EPA), and Feeding America are focused on the causes of food waste and how to prevent them. One leading issue in the United States is Source Reduction.
To better define Source Reduction, we first must look at the description of food waste.
Food waste occurs when good quality food is discarded instead of consumed. This takes the form of throwing away food at home, stores, or restaurants; farmers are unable or forgo harvesting crops due to low prices, overproduction, or lack of workers; issues arise in the transport or manufacturing process; and lastly rejection of food due to undesirable looks or color (FeedingAmerica, 2024).
Sadly, this list highlights that when food is wasted, so is all the embodied energy that went into producing, processing, distributing, and preparing that food.
The food industry absorbs these losses too and is noted as one of the five biggest challenges entrepreneurs and business owners in the food industry face (RTL Food Consulting, 2023) (Szala, 2018) (Buehler, 2023).
Business model
To combat these struggles throughout the food industry, Toast, has developed unique digital solutions. Toast is an “all-in-one digital technology platform” designed to support the whole restaurant community (ToastInc., 2024). With the ability for their software as a service (SaaS) to directly link to financial technology there is a streamlined path from sale to delivery. Whether dining-in or takeout, this technology is allowing more than 106,000 restaurants and food service business alike to run their operations with less variability and higher quality.
With this elevation in services there has been an increase in back-of-house efficiencies including a reduction in food waste. Additionally, and with a nod to the United Nations’ 17 Goals (U.N., 2016) Toast has been actively working to embed sustainability into their whole practice and in both up and downstream services.
Toast is conscious of its environmental footprint and the footprint of the businesses it serves. As seen in the company’s latest ESG report (ToastInc., 2022), Toast’s core business model, operates in the philanthropy and corporate social responsibility stage as shown by the graph below. The report displays that the company is taking steps to reduce and recycle as well as help restaurants be more sustainable.
Steps taken to limit adverse effects and leverage opportunities
Toast has taken several actions to limit the adverse effects of climate change and has leverage opportunities within the restaurant industry. These actions underscore Toast’s dedication to environmental stewardship and responsible business practices.
Philanthropy
- Toast.org established in 2021 as a partner non-profit partly dedicated to address “climate, food waste, packaging, sustainable agriculture, and diet.”
- Member of Pledge 1%, a commitment to donate 1% of stock equity to Toast.org.
- Makes donations/grants funding available for issues related to food systems and climate change.
Carbon Reporting
- Reports its emissions through an Environmental, Social and Governance (ESG) responsibility report where it showcases its greenhouse gas emissions.
- Scope 3 emissions, the largest contributor, is due to the downstream use of their hardware by customers (who power the devices with energy grid scope 2 emissions).
Emissions Reduction Targets
- Successfully transitioned to 100% net-zero electricity emissions for its workplaces in 2022, demonstrating a commitment to reducing its carbon footprint.
- Completed a comprehensive Scope 1-3 greenhouse gas emissions inventory, providing valuable insights into its environmental impact across the entire value chain.
- Achieved LEED Gold Certified buildings for workplaces in Boston and Chicago.
- Took proactive steps towards sustainability by initiating waste reduction efforts focused on hardware and guest packaging, contributing to its broader goal of minimizing waste and promoting a circular economy.
Measuring, reporting, and rating carbon performance
As a publicly traded cloud-based digital technology platform company for restaurant industry Toast has declared its commitment to minimizing emissions to contribute towards mitigating climate change. From 2021, the year that Toast went public the company has been publishing its carbon footprint as part of its Environment, Social & Governance (ESG) report. The purpose of the ESG report is to provide transparency and provide accountability for Toast’s actions and decisions.
Methodology
Toast calculates its Scope 1, 2, and 3 emissions in accordance with the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard, which is recognized as the industry standard for greenhouse gas accounting. Additionally, Toast utilizes the GHG Protocol’s Scope 2 Guidance to establish market-based accounting for its Scope 2 sources. To ensure accuracy, Toast engages a third-party consultant to conduct its greenhouse gas inventory following these protocols. However, independent third-party verification is not currently undertaken by Toast.
Carbon footprint analysis
In 2022, Toast released its inaugural GHG inventory report in accordance with the Greenhouse Gas Protocol. Initially, the report detailed Scope 1 and 2 emissions, alongside emissions from five Scope 3 categories for FY2021 (ToastInc., 2021). Building on this foundation, Toast expanded its GHG inventory for FY2022 to encompass emissions from Scope 1, Scope 2, and all pertinent Scope 3 categories, providing a comprehensive view of its operational footprint. This thorough approach underscores Toast’s commitment to transparently monitor and disclose emissions across its entire value chain.
Significant emissions sources for Toast include the utilization of its product by customers and the procurement of goods and services essential for its operations. Throughout 2022, Toast maintained its hybrid work model, emphasizing remote or self-service onboarding processes. Additionally, Toast transitioned its annual company kickoff event to a virtual format, resulting in reduced travel-related emissions for its hybrid and remote workforce (ToastInc., 2021) (ToastInc, 2022).
Overall, while companies in the technology industry have generally succeeded in shrinking their carbon footprint, cloud providers such as Amazon, Google and Microsoft have seen an increase in their emissions due to the accelerated growth trajectory of cloud-based and Software-as-a-Service application providers especially in the post pandemic era. Toast relies on Amazon Web Services for its infrastructure and hosting needs. Further, Amazon has demonstrated progress towards its commitment to reach net-zero by 2040 (Fitri, 2023) (Navarro, 2023).
Additional actions Toast should consider
Toast has undertaken significant actions to combat climate change within its own reach as well as in the restaurant ecosystem. We recommend continued efforts to build on waste reduction and management practices. Additional actions the organization should consider implementing are:
Internal actions
- Increase their investment in research and development and heavily focus on sustainability solutions for the restaurant industry through their platform and products. They also currently have a great number of reference resources such as beginner menus and restaurant set up. Toast could leverage their technology and data capabilities to provide similar insights on sustainability to restaurants.
- Investment in renewable energy sources such as solar panels which could be used to obtain energy credits to offset the carbon emissions from electricity consumption.
- Educate employees and reward environmentally conscious behaviors. For example, programs such as employee led green-teams, employee volunteer programs, and employee feedback sharing would help create awareness and instill a culture of responsible use and consumption.
External actions
- Create a restaurant operator incentive program to promote and increase good environment behavior. Toast’s technology can achieve the USDA’s main points of “improving product development, storage, shopping, ordering, marketing, labeling, and cooking methods” to decrease food waste.
- Consider a campaign to encourage reporting and development of plans to eliminate emissions from restaurant operators. Toast could lead by example by educating its operators on its own sustainability efforts.
- Launch a platform service connecting restaurant operators to suppliers. The platform could provide operators tools to source supplies that have strong environmental practices. Operators could rate suppliers by level of service, locality, and allow supplier to do the same.
Conclusion
Climate change will continue threat food security. If adverse weather-related events continue, we could witness the collapse of food delivery systems due to drought and limited supply. Food prices would increase in many parts of worlds due to scarcity. If overconsumption and production continue, our livestock and agricultural resources would be severely depleted. We would be unable to serve the growing population especially in sprawling cities. Moreover, food waste would increase and the lack of support to food supply networks will limit emission efforts.
Toast has embarked on a journey to revolutionize the restaurant industry who operate in the food production and consumption value chain. The technology solutions provide to customers bring visibility and data to enable restaurant operators to have highly efficient operations at the front and back of the house. Furthermore, Toast has shown commitment towards the reduction of carbon emissions by establishing ESG reports and utilize philanthropic efforts to combat the impacts of climate change. Toast could pursue additional actions that would promote environmentally conscious behaviors internally and from its customers while moving towards being a purpose drive company.
References
Buehler, N. (2023, November 3). The Economics of Owning a Restaurant. Retrieved from Investopedia: https://www.investopedia.com/articles/personal-finance/120815/economics-owning-restaurant.asp
FeedingAmerica. (2024). Corporate Food Donations. Retrieved from Feeding America: https://www.feedingamerica.org/our-work/reduce-food-waste
Fitri, A. (2023, March 31). The tech industry’s progress on carbon emissions has been mixed. Retrieved from Tech Monitor 30: https://techmonitor.ai/focus/tech-industry-carbon-emissions-progress
Kateman, B. (2020, 3 2). The Time Is Ripe For Ugly Fruits And Vegetables. Retrieved from Forbes: https://www.forbes.com/sites/briankateman/2020/03/02/the-time-is-ripe-for-ugly-fruits-and-vegetables/?sh=5de5bb1a4a85
Navarro, R. (2023, February 13). The Carbon Emissions of Big Tech. Retrieved from electronicshub: https://www.electronicshub.org/the-carbon-emissions-of-big-tech/
RTL Food Consulting, L. (2023, September 29). The Challenges of Starting a Food Business. Retrieved from Linkedin: https://www.linkedin.com/pulse/challenges-starting-food-business-rtl-food-consulting-llc?trk=public_post_main-feed-card_feed-article-content
Szala, J. (2018, 5 10). Challenges of running a food business today. Retrieved from The Nation’s Resturant News: https://www.nrn.com/sponsored-content/challenges-running-food-business-today
Toast. (2024). Retrieved from https://pos.toasttab.com/
ToastInc. (2022, December 31). Environmental, Social & Governance (ESG) Report. Retrieved from Toast, Inc.: https://s28.q4cdn.com/141746709/files/doc_downloads/2023/08/TOAST-INC-ESG-Report-FY-2022-051523-v073123.pdf
ToastInc. (2021, December 31). FY2021 Environmental Social and Governance Overview. Retrieved from Toast, Inc.: https://s28.q4cdn.com/141746709/files/doc_downloads/Toast-Inc-ESG-Overview-Report-FY-2021.pdf
U.N. (2016). Department of Economic and Social Affairs. Retrieved from United Nations: https://sdgs.un.org/goals
USDA. (2018). U.S. DEPARTMENT OF AGRICULTURE. Retrieved from Food Waste FAQs: https://www.usda.gov/foodwaste/faqs#
