You are here
Climate change and reducing greenhouse gases is a major issue both politically and in the business world. No longer can businesses be passive and merely meet government requirements. In the age of social and corporate responsibility, customers expect the brands they believe in to have a social conscience that can make this world a more sustainable and better place to live.
Many multi-national and market-leading corporations — Alcoa, Apple, Goldman Sachs, Berkshire Hathaway Energy, Cargill, Coca-Cola, General Motors, Google, Microsoft and Walmart, to name a few — have pledged to lower their carbon footprints by signing on to the White House climate change initiative, the “American Business Act on Climate Pledge.” While much of their carbon reductions will come through expanded use of solar power, these companies are also pledging to reduce their overall energy consumption.
For example, retail giant Walmart pledged a 20-percent reduction in the total kWh-per-square-foot energy required to power their buildings by 2020, compared to 2010.
MORE STRINGENT GOVERNMENT STANDARDS
In working to reduce greenhouse gases and slow climate change, the U.S. Department of Energy (DOE) periodically revises energy efficiency standards that set the maximum allowable energy consumption for specific industry segments.
The most recent set of commercial refrigeration efficiency standards was released in April 2014 and is scheduled to take effect March 27, 2017, giving businesses just under two years to prepare for implementation.
These new standards are predicted to significantly reduce energy consumption and CO2 emissions, the primary gas blamed for climate change. The DOE estimates that the new energy standards for commercial refrigerators and freezers sold over the next 30 years will reduce U.S. electricity consumption by about 340 billion kilowatt-hours and save businesses $12 billion in energy costs. In addition, they will allow the U.S. to reduce CO2 emissions by 142 million metric tons, which is equivalent to the annual emissions of 30 million cars.
Significantly tightening efficiency requirements, the new DOE commercial refrigeration standards will have a profound impact on convenience store retailers. As published, the new stricter energy efficiency standards will require, for the first time, a maximum energy consumption for cooler and freezer doors specifically (based on door size) over the current standards that have been in effect since 2012.
HOW CAN YOU MEET THE NEW STANDARDS?
Fortunately for c-store retailers, new technology is being introduced to meet the new and more stringent standards for cooler doors. In addition to saving energy costs, the new doors provide enhanced merchandising visibility for better product positioning that can drive sales of higher margin products.
One of the key new technologies that will allow c-stores to meet the new standards is the use of vacuum insulated glass (VIG) that provides 70 percent more energy efficiency over current standard door products. The new doors’ extreme efficiency not only meets the 2017 DOE standards, but their energy savings provide a quick two-year return on investment through an immediate reduction in utility costs.
In addition, these new doors are classified as “Zero Energy Doors,” meaning they require no energy to provide excellent insulation and anti-condensation capabilities, further reducing energy consumption. New, specialized coatings on interior door glass prevent fogging without the use of power even in humid environments. An additional advantage is lower maintenance and operational costs due to fewer anti-condensate wear parts.
The next generation energy-efficient doors also provide a much wider merchandise viewing area for greater product visibility than traditional doors. Higher product visibility results in more sales and greater customer satisfaction by having the ability to easily view available merchandise selections.
BENEFITS TO CONVENIENCE STORES
While the new commercial refrigeration standards require challenging reductions in energy usage, c-store owners stand to benefit in a number of ways:
A U.S. government Energy Star study found that supermarkets are the most electricity-intensive type of commercial building, and their energy costs are the second highest expenditure behind labor. Of those energy costs, the greatest portion is for refrigeration at 56 percent. With supermarket annual energy costs usually equivalent to their net profit of between 1-2 percent of sales, a 10-percent reduction in energy costs can increase net profit by as much as 16 percent.
A major chain cutting energy costs by 10 percent through efficiency improvements could yield tens of millions of dollars in additional profit, thus making the effort to reduce energy a significant economic benefit to responsible and sustainable organizations. Even though these numbers are based on an Energy Star study from the supermarket industry, similar savings can certainly be received by c-store retailers.
Keeping cool air contained in refrigerator cases with efficiently insulated and/or energy-free doors provide a more comfortable environment for shoppers, eliminating cold microclimates in the aisles. Customers who have a more comfortable shopping experience will lengthen their shopping dwell times within the store, increasing overall in-store sales.
Reduced Impact of Energy Price Fluctuations
When less of the operating budget is spent on energy because of reduced consumption, fluctuations in electricity prices such as in the event of major weather anomalies or new regulations will have much less financial impact.
Highly efficient coolers that hold perishable goods at proper temperatures more uniformly will reduce the possibility of premature product spoilage and decrease inventory waste.
Positive Public Image
Retailers can show they are reducing their energy usage and carbon footprint to help the environment and maintain a more sustainable business model.
Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.