National Restaurant Association research shows that for the average restaurant, utility costs represent 3-4% of sales. Kathleen Seelye, partner/president foodservice division, Ricca Newmark Design, puts it in a different context – about $160-200 per seat, per month. “There’s a direct relationship between energy costs and profits, so when you implement strategies that reduce energy expenses, there will be some dramatic impacts,” she says. EnergyStar, a joint program of the U.S. Environmental Protection Agency and the Department of Energy, estimates that restaurants that cut 20% from their energy costs can increase profits by as much as one-third. So, where to begin?
buy energy better
Gary Markowitz, founder/president, Kilojolts Consulting Group, says it’s important to look at energy costs on both the purchasing and the usage sides of the equation. “One step to take is to buy energy better,” he says. “It’s important for restaurateurs to understand that energy is a commodity and they may have options. Are you in a de-regulated state that allows you to buy electricity competitively from third-party suppliers?” (Some of whom sell alternative energy such as biodiesel and wind energy. For a list of states, visit briefingnewsletter.com and click on “more resources.”) “Go to your utility company’s Web site – they are required to list alternative suppliers. Your public utilities commission also has experts who can answer your questions,” says Gary.
If you buy energy from the utility company, Gary says that it’s imperative to understand how they charge and to confirm you’re being billed accurately. “The onus is on customers to make sure they are being charged the right rate or tariff,” he cautions. “You should also confirm that the meter is working properly and that it is being read by the utility company, not just estimated. Electricity and natural gas meters should always be read. If not, call the utility company immediately and go read the meter yourself.” (Gary notes that if usage was estimated, the utility company is required to indicate this on the bill.) For operators being billed for utilities by their landlords, “make sure that you aren’t being charged for someone else’s usage and ask the landlord for the meter readings – landlords can also be charged incorrectly by utility companies. Your lease should clearly state that the rate you pay your landlord does not exceed the rate which you would pay the utility company.”
use energy more efficiently
“We see a future where energy is more expensive – we’ve got to become more efficient about how we use it,” cautions Gary. “And energy conservation/management can save energy without impacting the customer experience; it can even improve it.” He advises restaurants to “first look around for the low-hanging fruit, such as lighting in the front and back of the house.” New technologies such as LED and compact fluorescent bulbs can almost immediately reduce energy use. “More efficient lighting in the front of the house can be both aesthetically pleasing and have optimal efficiency,” says Gary. “And we’re not talking about changing your lighting design, just switching from halogen or incandescent lighting sources and using different quality bulbs.” Increasing energy efficiency includes regulating ventilation, refrigeration, and temperature – making sure you accurately measure and control their use. “It can be as simple as having the right digital thermostat in the right place – usually near the return air, not opposite the front entry door or over a coffee pot,” says Gary. According to Flex Your Power, California’s energy efficiency campaign, every degree of cooling increases energy use by 4-5%; an Energy Star programmable thermostat that automatically controls temperature settings can save in some cases as much as 70% on heat and cooling costs. Deeper efficiencies may require upgrading to pieces of equipment that don’t use as much energy and water. “This probably means tapping in to capital costs, but there are all kinds of grants, utility rebates, awards, and financing options. Chances are you can use somebody else’s money to soften the initial financial commitment,” says Gary. (To learn more, visit dsireusa.org)
waste less energy
According to Kilojolt’s research, restaurants need to earn $20-25 in revenue to recover every $1 of energy cost they waste – and at least 10% of a restaurant’s energy cost center is attributable to waste. “It’s entirely possible to do what you do and use less energy,” says Gary. Experts agree that an energy audit – an assessment of your energy use – is a great place to start and essential to identify areas where you can save money and to benchmark your progress. It can range from a quick walk-through of your operation to look for major problem areas, to a thorough analysis. Utility companies frequently provide audit options, both online and on-site, and often at no charge; they can also refer you to professionals. In its guide to energy audits, padosa.com, an online resource to help companies with sustainability efforts, recommends that businesses visit business.gov/expand/greenbusiness/energy-efficiency/state-local for links to state programs and assistance for small business owners to conduct energy audits.
A simple walk-through can provide opportunities to quickly correct obvious problems, prioritize energy efficiency projects, and determine the need for a more detailed audit. Checklists can help you know what to look for. (Visit nppd.com/My_Business/Commercial_Services/Additional_Files/restaurant.asp). With or without a checklist, Gary advises restaurateurs to “look at your operation with a fresh pair of eyes and start asking questions.” (See page 3 for some things to look for as you walk through your restaurant.)
“There are crazy things that employees do and correcting them is transparent to the customer,” says Gary. “Learn how long it takes to get equipment up to temperature and when to turn things on. Don’t heat the oven prematurely, don’t turn the hood on at 6am, and turn off idle equipment. Control temperature with sensors instead of manually, and restrict changes – the digital night-set thermometer should have a password,” he cautions. Preventative maintenance is also in the category of clear cost savings that don’t impact the customer experience. “Setting up a preventative maintenance program sounds mundane, but it has a huge impact,” says Kathleen. “You’ll save anywhere from 12-17% if you just take care of your equipment. And remember that, if you buy EnergyStar equipment and you don’t replace parts with authorized ones, you’ll lose that certification.”
It’s one thing to identify obvious areas for improvement and another to execute consistently. “Wasting less energy means making employees aware and teaching them how to use equipment more efficiently, such as turning things on just in time instead of all the time,” says Gary, who is a firm believer in the power of incentives. “Measure energy use and reward employees for improvements; make it part of your managers’ compensation formulas. That makes it tangible.” (Note: Because managers typically don’t have the expertise to design and implement a complete energy conservation program, Kilojolts has created the Restaurant Manager’s Energy Toolkit, a turnkey, comprehensive program that covers the front and back of the house. For more information, visit kilojolts.com/toolkits/restaurant-managers-energy-toolkit.php.
walk through your restaurant and ask:
• Are the cleaners leaving lights on all night after they finish? Is the light left on in walk-in coolers? Are your people turning on all lights before you open?
• Is the hot water left running and why is the dishwasher maintaining 160 degree water in the reservoir in the middle of the night?
• Do refrigerator and oven doors fit tightly? Why is the cooler door left wide open when loading and unloading? Is there a milk crate left in front of a walk-in door? Is the back door open more often than not so employees can smoke?
• Is the hood fan on when nothing is cooking? Is the steam table on when it doesn’t need to be and/or the soup warmer on all day with the cover off – and sometimes with the air conditioning way down? Is the air conditioning or heat on full blast when you aren’t fully occupied or at night?
• Is any heat-producing equipment next to equipment that needs cooling – such as a pizza oven right next to an icemaker, a reach-in freezer next to a dishwasher?