The Hidden Cost of
Incorrect Equipment

Often, catering consultants and kitchen houses are challenged to reduce cost on their capital expenditure on catering equipment and infrastructure. Although initial cost is always a key factor, there are other elements to consider. This includes the lifespan of equipment, ongoing costs, environmental impact and hidden operational costs. These areas of consideration should always be scheduled then presented back to the client and operator group. More often than not, the ongoing cost implications far outweigh the original agreed budget.

Examples Of Hidden Impact:

A recent project was reviewed by Invito, and the decision was taken to ‘value engineer’ the cold rooms panels in the cellar, as they run at a higher temperature than a standard fridge. In the initial review, the below circumstances were not considered or presented back to the client team.

Increased electrical cost: the raised price of running a non-insulated cold room. This has both an environmental and financial impact, as it increases energy consumption and bills. This is especially relevant today, where the government are encouraging us to insulate our houses to reduce energy consumption.
Longevity of products: due to lack of insulation, the refrigeration plant was going to have to work harder and, naturally, would need replacing sooner. It is important to consider how cost-effective these factors can be long-term.
Increased use: dealing with mechanical machinery can increase the chances of down time.
Sustainability: the environmental impact of this project was not fully considered or presented back to the client team in this instance.

Equipment Specification and Costs

Glassware

All bars need bottle coolers and, where glassware is used, a glass washer. This specification is key to various ongoing impacts detailed below.

Bottle Coolers

There is a race to the cheapest bottle cooler, but also, more expensive coolers, as they tend to have a longer guarantee. This prompts the question: if one mid-range brand has a cheaper energy bottle cooler, and an earth-friendly cooler costs £100 more, which is the better offer? This depends on the expected life of the cooler. For example, there is a sports venue that opened in 2006 that still has most of the same coolers it opened with, meaning we have an ROI of over 15 years.

We recently conducted a trial with bottle coolers at the AO arena, where the standard and eco-range coolers were put on the same bar, which was stocked with the same products at each end. The coolers were connected to energy consumption meters. The result? We found that over a period of four months, there was a £5 saving per month, resulting in an annual saving of £60, of an ROI of less than two years. This means that a 13-year life of the cooler would result in a saving of £780, depending on the cost of energy. By this time, the cooler has paid for itself.

Glass Washers

Manufacturers have worked on improving their products in order to benefit the user by listening to feedback and taking observations from the operators. Most warewashing manufacturers have developed a specific machine with reverse osmosis to aid in the water purification process to keep glassware clean. A standard softener is often cheaper, however, can result in the following implications:

Increased labour costs from hand-polishing glasses
Increased breakages, as glasses are more likely to break when being hand-polished in restaurants
Reduced life of quality. Glasses will tend to look less presentable and will need replacing more often

Given that the glassware of a restaurant and/or bar is often part of its DNA, we should suggest to clients that they implement the best infrastructure possible to get the most out of their equipment. When a glass washer is proposed without reverse osmosis, we should make sure to explain the impact that this will have on labour, breakage, and replacements.

Intelligent Cooking Equipment

Certain manufacturers in life become synonymous with the equipment they produce, for example: a vacuum is often referred to as a hoover, and people often call their phone an iPhone. Often, a chef will ask for a piece of equipment by brand, for example, to them, a mixer is a Hobart.

While there are often three manufactures available at roughly the same standard in each cooking category, most of the time quality comes down to usage and exposure and, as per the iPhone example, we tend to stick with what we’re used to.
Catering equipment specialists realise that changing equipment brands is like changing your phone brand – it takes time to learn how to use a new brand, and time is money. If a certain venue is acclimatised to using one brand and they change to a new brand, they in turn need to train large numbers of staff on how to use it. This can have a massive hidden impact which needs presenting to the client. We should outline the below potential impacts:

Increased energy consumption
Requirements for additional water treatment
Additional chemical costs
Additional cleaning costs
Time spent training new staff
How time loss and product loss will impact guests
Products can be more difficult to programme
Different operating systems can lead to an increased need for
cooking program developments

The above should always be presented. This is not just to improve capex savings, as its well known that the brand leaders aren’t always trying to be cheap, but due to staff. We need to consider this: how many people can switch operating platforms on their phone from apple to android (and back) seamlessly? Yet, we are expecting a kitchen team to switch the equipment they use with ease.

Conclusion

We have highlighted four key areas to discuss, but the list is endless. We often omit waste management and UV from canopies almost straight way without considering the ongoing costs. Going forward, when it comes to value engineering changes, we should present them in the below table.
Capex Savings
Life expectancy impact
OPEX costs
Labour and product Cost
Environment impact

The Hidden Cost of Incorrect Equipment