Sustainability pays off
Big Mamma reveals the secret recipe for turning sustainability into profit. Founder Victor Lugger shares how conscious choices have proven to positively impact the bottom line of his company.
“We believe that what is not measured cannot be managed,” says Victor Lugger, founder of the Italian restaurant group Big Mamma. In 2018, the full-service formula, now part of McWin Capital Partners, became Europe’s first hospitality group to receive B-Corp certification. A B-Corp company aims to connect private business benefits with the common good: defined corporate goals include not only profit but also a positive impact on society, employees, the community, and the environment. In simple terms: ecological and socially sustainable business practices.
Certification as an ego boost
The decision to pursue B-Corp certification was, to some extent, an ego boost. “I am a founder. I want to have an impact, and I want to be proud,” Lugger said at this year’s European Foodservice Summit in Zurich. He can substantiate that the effort is worthwhile with numbers:
The restaurant brand, currently with 23 locations in Europe, was able to increase its EBITDA margin through the implementation of numerous measures. Lugger explains, “We started with digital menus because we wanted to print less paper. When we got QR codes for the menus on the table, we thought, why not also handle payments digitally. And with these two initiatives, we made a net gain of 2 percentage points. The EBITDA margin increased from 22 to 24.” According to Lugger, who is also the founder of the digital payment app Sunday, the initiative brought in an additional 8 percent in revenue, as digital payments, for example, expedite table turnover by 15 minutes when guests don’t have to wait for a server. This, in turn, leads to higher table turnover and more guests.
Plenty of operational dials to turn
The reduction of food waste also had a positive impact on the group’s bottom line. According to Lugger, food waste reduction resulted in a net gain of 1.25 percentage points. Since the certification, Big Mamma has become a mission-driven company, and Lugger has observed a 10 percent lower employee turnover. This saves 360,000 euros annually. “I personally consider this a very good use of my time as CEO,” says Lugger.
Energy-saving measures, with an investment of 230,000 euros for 23 restaurants in five countries, brought in an additional 0.6 percentage points of EBITDA margin, which amortized in three months. According to Lugger, the food and beverage supplies for his restaurants come either from Italy or the region, within a radius of less than 200 miles. 85 percent of the products are sourced from local suppliers. This results in an additional 0.45 percentage points of EBITDA margin.
Well-spent CEO time
The biggest challenge for Lugger in implementing the certification was, “It takes CEO time. But if you’re not personally involved, it won’t work.” He also adds, “It is valuable CEO time. Our 2,400 employees know what they are doing as a B-Corp company. And they can be proud!” As a tip, he mentions that many sustainable practices can be implemented in the operation before investing money. “There are numerous low-hanging fruits,” says Lugger.
