December 12, 2024

Demand Forecasting for the Restaurant Industry

Osaka Gas Utilizes Weather Data to Predict Restaurant Demand and Reduce Waste

Osaka Gas is set to launch a groundbreaking system that harnesses weather data to forecast restaurant demand, revolutionizing the way eateries manage their operations. In collaboration with restaurant chains, the company is developing a demand forecasting system that predicts customer volumes based on weather patterns. This system will help restaurants optimize ingredient procurement, reduce food waste, and address labor shortages by adjusting staffing levels according to predicted demand.

Forecasting System to Reduce Food Waste and Improve Operational Efficiency

Scheduled to go live by the end of fiscal 2024, the system will initially partner with restaurant chains in the Kansai region. These chains will contribute key data, such as past customer numbers collected from their point-of-sale (POS) systems. This information will be analyzed using artificial intelligence (AI) to generate accurate demand forecasts by considering factors such as weather conditions, the days of the week, and the time of day.

The system will provide detailed weather forecasts, predicting customer volumes for the upcoming days. Based on these insights, restaurants can adjust their ingredient orders, food preparation quantities, and employee shifts to match anticipated demand, reducing the risk of overstocking or understocking. The result is a more efficient operation, less food waste, and optimal labor management.

Demonstration Test to Verify Effectiveness

Research has shown that the number of customers at restaurants is strongly influenced by weather conditions such as temperature and rainfall. To test the effectiveness of the new forecasting system, Osaka Gas will soon begin a demonstration phase. During this period, the company will verify the system’s accuracy in predicting customer volume, as well as its potential to reduce food waste and improve staff allocation.

According to the Ministry of Agriculture, Forestry, and Fisheries, food waste from businesses across Japan amounted to 2.36 million tons in fiscal 2022. The restaurant industry alone contributed 600,000 tons of this waste—about one-quarter of the total. This figure is second only to the food manufacturing sector, which generated 1.17 million tons of waste. The retail industry, including supermarkets, accounted for 490,000 tons.

The Ministry of the Environment has highlighted that “over-preparation leads to food waste” in restaurants. Many establishments overcook or prepare excessive amounts of food to avoid running out of popular menu items, a problem that the new forecasting system aims to solve.

Leveraging Weather Forecasting Expertise

Osaka Gas has been involved in weather forecasting since 2018, when it received a permit from the Japan Meteorological Agency to provide forecasts. Initially limited to forecasts for up to three days in certain areas of western Japan, the permit was expanded in 2023 to include forecasts up to one month ahead nationwide.

In addition to predicting demand, Osaka Gas will also provide aftercare services, such as comparing forecasted data with actual outcomes and offering regular system updates and improvements. The company aims to ensure that restaurant chains can rely on the system with confidence, potentially assigning dedicated staff to assist with system implementation and troubleshooting.

Addressing Labor Shortages and Expanding Services

With over 10 million customer accounts, primarily in the Kinki region, Osaka Gas serves a wide variety of industries, including hotels, commercial facilities, and factories. The company plans to expand its offerings beyond restaurants by providing similar forecasting services to other sectors, helping businesses optimize their operations, mitigate labor shortages, and better manage demand.

By integrating weather data with customer demand forecasts, Osaka Gas believes it can help businesses streamline operations, reduce waste, and improve overall efficiency, positioning itself as a leader in innovative solutions that combine energy expertise with data analytics.