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    Get Green

    Doing the right thing for the planet does the right thing for retailers' bottom lines

    By Linda Lisanti

    The reasons for a business to be environmentally friendly are boundless. Who doesn't want to stop global warming, prevent resource depletion, save endangered species from extinction and preserve the Earth for future generations? But, perhaps the most-compelling motivation for convenience and petroleum retailers to be more environmentally conscious is that "going green" often results in getting green -- cash, that is.

    C-store operators that take steps to reduce their environmental footprint are finding that doing the right thing for the planet does the right thing for their bottom lines.

    With all the attention being paid these days to ecological issues such as climate change, resource shortages, environmental toxins, and energy supply and demand, consumers are becoming well-schooled on the state of the ecosystem. And accordingly, they're starting to open their wallets to businesses that do their part for sustainability.

    "This is a new competitive issue," said Joel Makower, founder of Greenbiz.com, an information clearinghouse of sustainable business practices. "Green is not just a marketing tool or a feel-good term; it's not just about doing a nice thing. It's about being more efficient and less wasteful, as well as being seen by customers and employees -- and potential customers and employees -- as a good company to be involved with."

    When stacked up against other industries and even other retail channels, though, experts like Makower say the convenience and petroleum retailing sector is behind the curve in adopting greener business practices.

    One reason, he said, is because unlike the nation's largest retailer, Wal-Mart, which is driving a greener retail environment, smaller operators like c-stores don't have as much environmental impact and market clout, thus their savings from going green are relatively less. Many c-stores also lack the staff or time to devote to these initiatives.

    Besides that, the convenience industry so far has dodged the concentrated consumer activism that's prompted larger retailers to take greener steps, according to Scot Case, vice president of TerraChoice Environmental Marketing Inc., an environmental marketing agency based in Reading, Pa. "There were literally environmental advocacy groups that chained themselves to the outside of Staples stores," he recalled of a time when the large office supply retailer became a target of ecological activists.

    While c-store retailers have been "blessed" to avoid such public outcry, Case said the downside is they're missing out on considerable financial and business opportunities. Green retailing presents operators with huge potential to reduce operational costs and grow revenue -- all while being perceived by consumers as a good corporate citizen.

    Energy Stars

    In terms of reducing costs, energy efficiency seems to be the area where convenience retailers can see the most immediate and measurable return on investment.

    For instance, Golden Gate Petroleum, a 31-store chain based in Martinez, Calif., recently installed 160 solar panels on the rooftop and canopy of its Shell station in Atascadero, Calif. The system, designed by REC Solar Inc., produces more than 50,000 kilowatt hours of electricity annually, effectively eliminating the station's electric bill each month, explained Jonathan Ketchum, the company's director of retail. There also are ancillary cost benefits, such as installation credits and tax incentives.

    "Our decision to install solar at this site was driven by economics," Ketchum said, adding, however, that the system also offsets greenhouse gas emissions and lets customers know Golden Gate is concerned about energy consumption and alternative sources. The retailer is the West Coast's largest biofuels producer and distributor, he continued.

    Although the initial capital outlay for the solar electric system was a large expenditure, energy consumption and long-term costs are down, according to Ketchum. As a result, the chain is considering adding solar panels to all new builds going forward.

    On the opposite coast, Canastota, N.Y.-based Nice N Easy Grocery Shoppes is slashing its utility costs by opening new "green stores" that include a host of eco-friendly and energy-saving features. "For us, this was something that emerged as we were sitting in operational meetings and saying we have to get our arms around these rising utility costs. As we've grown in foodservice, the need for electricity has grown, and the utility bills have grown along with it," executive vice president Peter Tamburro noted.

    Among the green elements incorporated at Nice N Easy's new stores are the Hussman Protocol unit. Often used in the supermarket industry, this unit has multiple compressors that are utilized on a need-only basis, reducing energy use. The technology runs everything in the store except for the heating, ventilation and air conditioning (HVAC) system. Previously, each piece of equipment was powered by its own compressor.

    An E2 Facility Management System from Emerson Climate Technologies sensors more than 80 items in the store, including the HVAC system, for humidity, temperature and lighting levels. The system activates an alarm when equipment, such as a freezer, drops below a set temperature; it also can sense daylight and will turn the florescent lights on and off accordingly.

    LED lights (light emitting diodes) installed in the coolers use tremendously less electricity and don't throw off heat like fluorescent lights do. It's estimated that LED bulbs last 10 times as long as compact fluorescents, and 133 times longer than incandescent bulbs. Coolers in every Nice N Easy store will be retrofitted with LED lights.

    With the first of these "green stores" opened just this summer, Tamburro said it's too early to have hard numbers on the energy cost savings. The chain is pursuing a contract with a local power management company to track and monitor its energy consumption for this purpose.

    Going green is even more financially fruitful due to government incentives. For instance, funds are available through local power management companies and New York state to offset the cost of energy-efficient equipment, Tamburro noted, adding that Nice N Easy not only plans to open more green stores, but will also implement additional energy-saving practices.

    "At the [2007] NACS Show, there were a couple of suppliers promoting LED canopy lights and yard lights. We want to use LED lighting as much as we can as we move forward," Tamburro said. "You will definitely see a greener Nice N Easy."

    Greening Your Reputation

    Less immediate and measurable, but possibly even more significant, are the branding and reputation benefits convenience retailers can gain from becoming an environmental steward. As Makower points out, employees want to work for companies that do the right thing, just as consumers want to patronize businesses that are ecologically conscious.

    "If there's a brand associated with being a good corporate citizen, people talk about that. People like to share information about the companies they like and don't like," Makower said. "We, as consumers, have a choice where we want to do business."

    One convenience and petroleum brand that's been successful in creating such a reputation is BP plc, which was recently recognized by Fortune magazine as the world's most accountable company based on its quality of commitment to environmental and social goals.

    BP has been a committed player in the green movement for some time, and in fact, green is one of the company's core values, said Irina Filippova, director of Los Angeles operations for the BP brand marketing and innovation team. Its past environmental initiatives have included launching into the alternative energy business, developing power through wind, solar, hydrogen and natural gas, and putting solar panels on the exteriors of its retail locations.

    In March, though, the company took greenness to a whole new level with the unveiling of Helios House in Los Angeles, the first LEED-certified gas station in the U.S. LEED -- the Leadership in Energy and Environmental Design rating system developed by the U.S. Green Building Council -- is the standard for environmentally sustainable construction.

    The station is made with Earth-friendly farmed wood and reduced pollution paint. The geometric stainless steel canopy holds 90 solar panels and a rainfall collection system where the water collected is reused to care for the site's landscaping. A green roof made of local plants and grasses reduces the need for mechanical heating or cooling. LED lighting illuminates the gas island and the store interior, while screens in the fuel dispensers play environmentally themed videos for customers as they're pumping their gas.

    "Helios House is a way for us to apply our green core value to the retail site where our connection with the consumer is immediate," Filippova said. "Helios House is about sustainability, but it's also about education. It's a way for us to create an entire experience where the consumer is transformed. There is a lot of anxiety about climate change, and people do not have an easy way they can change the current situation. We're giving consumers advice on improving their choices."

    Even without putting forth any extra advertising dollars, the station has been generating a lot of buzz, particularly through media coverage, which has helped to grow customer counts. Helios House is attracting a wide cross-section of consumers, from those who are environmentally sensitive to those completely unaware, and Filippova said they've found almost half the customers are willing to drive out of their way to shop there.

    "The whole package of features combined within the station encourages people to come back and spread the word," she said. "It's fun, customer friendly and cleaner."

    While there are no current plans to build additional Helios House sites, BP is taking the lessons learned here and passing them along to its jobbers nationwide. This fall, a booklet filled with small, easy ways to make stations greener went out to all jobbers.

    As with any project, going green has to make business sense, Filippova said, and BP believes it does. "We spend a lot of time evaluating the actual business performance benefits [of green], and we believe the benefits are tangible," she said.

    Like BP, Irving Oil is also giving its customers a way to reduce their environmental footprint and contribute to tackling the issue of climate change. In November, the Canadian-based convenience store chain, which operates more than 500 Mainway and Bluecanoe stores in eastern Canada and New England, launched a "low-carb" driving awareness pilot program at six of its locations, as well as within the company.

    For five weeks, information cards containing tips on reducing carbon emissions while driving were handed out to the chain's customers and employees. Attached to each card was an entry ballot, which customers could fill out to win low-carb prizes, such as bus passes, bicycles or running shoes. To be eligible to win, customers were asked to provide feedback on the ballot for a number of topics from rating Irving Oil's environmental performance to indicating what tip they would be most likely to adopt.

    Based on the responses received, there appears to be a strong appetite among consumers for information and action on driving more efficiently, according to company spokeswoman Samantha Robinson. "It's clear that many people want to make changes in their lives for the benefit of the environment, and they are looking for ways to do that. The state of the environment is the No. 1 concern for most Canadians, and we want to be part of the solution," she noted.

    The low-carb program is not the first green initiative Irving Oil has undertaken. At its refinery, the company operates a shuttle bus service, and employees use bicycles to get around the 780-acre grounds. Additionally, Irving is installing an ultra-efficient $90 million cogeneration plant, which uses one fuel to produce two forms of energy -- power and steam. And it is working in partnership with Praxair Inc. to capture and recycle hundreds of thousands of metric tons of carbon dioxide each year, which is then turned into food-grade carbon dioxide for soda drinks, according to Robinson.

    "We believe that environmental performance and economic development can coexist," she explained. "Changes like these benefit our company by encouraging innovation, while responding to the public desire for action on climate change. We are proud of the green initiatives we have set in motion, and we hope our customers are, too."

    It's Easy Bein' Green

    For some retailers, these efforts may seem too much to take on, but the reality is that any convenience store business, no matter how big or small, can become more sustainable. It all starts by opening up the checkbook, and seeing where the money is going.

    "Every business does two things -- buys and uses resources and creates waste that has to be disposed. Waste represents inefficiency," said Makower of GreenBiz. "Retailers need to find out where they're spending to find where they're being wasteful. At the end of the day, being a greener business is about being a better business."

    The fastest and easiest way to identify opportunities to save is to conduct an energy audit. Local utility companies often will do an energy audit as a free service, said TerraChoice's Case. Otherwise, he noted that the process can be as simple as purchasing an energy meter for $20 to $30 to see what areas of the store are consuming the most energy.

    Some other easy ways Case said retailers can start going green to get green are:

    -- Replace traditional florescent lighting with LED lights in all refrigerated and freezer cases.

    -- Install water-efficient car washes and use environmentally safer detergents.

    -- Offer a fuel discount exclusive to hybrid electric vehicles.

    -- Leave only one cash register on during the late-night hours.

    -- Stock a higher percentage of organic products.

    "Every convenience store can do something very affordably. Some will be much more aggressive and they will be incredibly well-positioned as the environmental consumer movement builds momentum," he said. "People who think this is a fad are mistaken. That's like saying auto safety is a fad. Green is just an advanced form of environmental safety."

    For comments, contact Linda Lisanti, Senior Writer, at [email protected].

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