The capture, evaluation, and management of data from building systems and machines have become imperative to facility and building managers in managing energy usage. This rings especially true for grocery stores that operate within extremely tight profit margins while ensuring customer safety and comfort, minimizing food loss, and meeting carbon footprint objectives.
When store data is readily visible to those managing grocery stores across locations, cities, and states, they can achieve an impressive amount of energy usage, cost savings, and labor maximizing objectives.
This guide will look at what traditionally has been available to grocery store managers and what options are evolving on the market to enable real-time control of energy usage.
Grocery stores operate on extremely tight margins of between 1 and 3 percent. Dun & Bradstreet estimates two-thirds of grocery items are perishables that require refrigeration and are subject to food safety compliance. Extremely slim margins require software and automation tools that monitor environments, appliances, and energy to prevent as many issues as possible.
Grocery stores already spend 14% of store revenues on labor - and reports indicate this is on the rise. Food loss prevention tasks traditionally involve a lot of manual labor with such things as recording cooler temperatures and responding to store sensor alarms. Automating such tasks has the potential to save stores a lot of money.
The FDA’s food code lists in explicit detail the risks associated with improper vendor storage of grocery items. It provides a roster of compliance checks for food safety law in the United States. Establishments that fail to meet these codes can be fined up to $500,000, and in some instances, there can be criminal implications.
The FDA has included in the legal code a comprehensive guide to standard procedures. Through Retail Food Protection, the FDA provides a complete tutorial on the HACCP (Hazard Analysis and Critical Control Points) compliance process. A regulatory structure is in place to enforce HACCP.
HACCP compliance requires extensive setup and record keeping. A grocery store or chain must develop a HACCP plan, assemble a compliance team, and develop a flow diagram. The diagram must outline their compliance process, assess hazards, establish monitoring and corrective actions, and set record-keeping procedures.
The majority of the principles laid out in the HACCP compliance process can be achieved consistently with a good Building Automation Systems (BAS), which keeps an ongoing record of energy data across facilities allowing established temperatures to be maintained consistently throughout stores each day.
Regional compliance can add more layers to what is expected in food safety compliance. For those grocery chains that are managing stores across varying regional requirements, and with varying required frequency, increasing visibility into all store energy data can be invaluable.
To build the proper flow chart for HACCP compliance, a grocery company should refer to the Retail Compliance Center. The RCC details the reasons why grocery refrigerants are regulated. One must have a thorough understanding of refrigeration regulations to maintain both EPA and FDA compliance.
Refrigerants are classified as Class I and Class II substances. Class I includes ozone-depleting substances and all chlorofluorocarbons (CFCs). Class II covers substances that are reasonably believed to cause stratospheric damage to the ozone layer. Class II includes hydrochlorofluorocarbons (HFCs).
Refrigerants must be used on grocery premises to keep food at compliant temperatures; however, a leak of refrigerant chemicals would be devastating to the business if left unchecked and can include EPA repercussions, which range from civil fines to criminal prosecutions.
An example of this can be seen with the case of Trident Seafood, who had to settle with the EPA in 2019 to "resolve alleged violations of the Clean Air Act". Trident was required to pay $23 million to reduce refrigerant leaks and was charged a further $900,000 penalty.
Advanced refrigeration sensors, alarms, and a smart data exchange system can help managers keep coolers across locations compliant.
A complete summary of the data types required to report HFC emissions is available on the EPA’s website. A good energy management system will automatically keep track of HFC emissions, which eliminates human error in reports and cuts down on the labor required to monitor and report.
In-depth research about HFCs and why they must be reported is advisable to avoid compliance failure, class action lawsuits, or other unprecedented losses. Learn more about HFCs at the Environmental Investment Agency.
The EPA requires swift reporting on leaks to help stave off large penalties or fines. Ideally, leaks should be identified in real-time with full details kept on record.
A swift incident reporting system also helps grocery managers determine the quality of maintenance they are receiving at a location. They may need to select a different refrigerant and HVAC/R company to stay on top of compliance - and to extend the life of their fridges and coolers.
Across U.S. stores, annual refrigeration leak rates and their statistics vary due to different reporting standards, differences in refrigeration management policy, and more.
While there is no known completely standardized annual leak rate posted in regular open-source search, there are ways to compare annual leak rates. One can simply download several copies of various local reports and compare them. Or you can rely on agency sweeping-scale research projects. One such technical report by the Environmental Investigation Agency serves as a good example.
Setting benchmarks for your stores by region is recommended. The objective ultimately is to reach as close to a zero-incident rate as possible.
Store by store assessments have unique procedure points to check off. There are standard compliance issues to meet, and there can be local compliance regulations. There are also standards imposed by grocery chains and corporate franchises.
Building Automation Systems are set to calibrate the output and performance of refrigeration systems. When a temperature reads above ideal for frozen foods or below ideal for keep-hot ready meals, the staff is alerted to an immediate safety issue. Off-temps can also indicate leaks, which require reporting and may require dispatched maintenance.
There can be some difficulty applying priority to energy efficiency alarms. Some alarms can flag accidentally, and some alarms may not be urgent and do not require staff or management’s immediate attention. Finding an energy management system that helps managers prioritize the level of urgency alarms put off has many benefits, particularly in managing multiple locations.
Usually, Building Automation System (BAS) solutions accomplish this by calculating the risk vs. the estimated consequential cost of what an alarm is flagging. This allows the repair actions to take priority to those issues that will cause the highest cost to the store. This automation saves money on wasted labor in responding to inconsequential alarms and unnecessary dispatched maintenance.
EMS systems also gauge when a leak is identified and, using data intelligence to hone in on the system, adds a precision location tool for damage points. This lessens the time an HVAC/R repair crew will spend searching for a leak. This can also lessen the time grocery staff must spend removing stock from damaged coolers.
Many stores take a traditional, analog alarm and hardware approach to reducing leak incidents. However, traditional analog and current digital hardware models fail to integrate well across locations in bringing all the data points into one centralized command center, which is by far more effective.
There are many specialized departments in any given grocery store. Produce will not be managed the same way that meat, ready to eat, frozen, or even pharmaceuticals will. Every department has its unique protocols. Protocols that can lapse as a store’s staff crosses departments for whatever reason. In this case, Building Automation Systems step into a mediation role. The alarms in the system will identify a problem, such as a freezer door that has been left open past a certain allowed time frame during stocking.
Alarms range from simple to advanced failure predictions. The way alarm systems integrate multiple system components is critical. Some systems integrate HVAC/R, lighting, refrigeration, and environment for maximum effect. An on-location analysis is needed to determine the ROI of each store's system. Proper monitoring capacity increases the HVAC/R system's lifespan. This saves each store location costs of HVAC/R repair and replacements.
Hardware equipped with additional sensors has benefits as well, although a verified range for those sensors is important. Multiple remote sensors won’t be any more effective if they don’t have an appropriate response range.
System integrations for manual HVAC/R monitoring vary in complexity. Monitoring devices need to be installed based on a manufacturer’s requirements for both the monitoring device and the HVAC/R system a store is using. A robust Building Automation Systems that integrates the monitoring tools across a span of system components is preferred. Monitoring should include the circulation of moving air, water, ventilation, lighting, condensation, pressure, and so much more.
Systems, appliances, and machines that are monitored with predictive assessments live longer to their estimated life expectancy.
System monitoring can:
McKinsey and Company has released a report detailing the exact process for reducing the capital expense cost from energy. McKinsey called these savings “elusive” and stated that 60% of consumer energy comes from refrigeration. They make a “holistic business case” for the value of these energy reductions. McKinsey states that grocery companies should consider other capital costs such as maintenance, installation, overnight labor for maintenance, labor for overtime, etc. when determining capital expense reduction.
McKinsey created a capital cost reduction worksheet that outlines significant energy savings. Their sheet shows that there can be a $2.5M annual savings if grocery stores took up energy-saving technology, with an estimated 1.5-year payback.
The EPA calls this the Energy Efficiency Paradox in their publication of the same name. This publication was a case study into supermarket refrigeration investment decisions. The EPA claims supermarkets are the most electricity-intensive type of commercial building, averaging about 50 kWh per square foot annually.
The EPA’s research shows that there is a “payback gap” supermarkets can achieve that yields significant energy savings by “incorporating technologies” that are current. These technologies include Building Automation Systems. Their research was based on a seven-year or less criteria model. This “payback gap” is meant to aid in determining capital investment decisions.
Supermarkets that participated in the EPA study found that the payback period is much shorter than the typical remodel schedule. This was especially true when retrofitting an existing store. Some of the participants in the study stated that they had a less than 3-year payback period. The goal is to get a two year payback period, as the typical supermarket remodels once every five years or so.
A marked benefit of a remote monitoring service is the multi-location capacity they have. A Building Automation System can be accessed off-site. Each store location can be monitored as if the manager was perpetually present. Store senior management can bring data and performance with them to chain board meetings.
Precise energy savings can only be determined with data. They are the product of the sum of all energy-saving hardware, and the difference of all energy waste risk diverted. This savings value can only be calculated with a system, like an EMS, that can capture and evaluate the data.
The U.S. Department of Energy released a report that helps grocery HVAC/R monitoring managers set team goals and executables. The pamphlet was issued for industrial refrigeration commissioning for industry facility builders. It states that incorporating energy-saving plans at the building stage has the potential to save between 7-25% of future energy costs.
In research released by Seattle City Light, they found that 78% of grocery store energy is divided between refrigeration and lights. Seattle City Light states that a 10% reduction in these energy costs can boost store profit margins by an equal 10%.
Many facility and energy managers target a building’s unoccupied times when trying to save energy and money. They put setpoints higher or lower to save power. The overarching goal should be to run HVAC units as little as possible, however, setting setpoints too low in winter and too high in summer places the building in a permanent losing battle.
Over-adjusting setpoints result in HVAC units overworking to catch up during occupied times. Unfortunately, units overworking during occupied times usually aligns with utility company's peak times, which are when electricity rates are much higher.
Arbitrarily setting setpoints leads to money and energy waste by running units more, running units at peak load times, and increasing wear on HVAC units. Additionally, customer comfort is impacted as there will be times when it is too cold or too hot in the store while units work to hit setpoint.
It's a lose-lose-lose situation. Grocery and energy managers require the tools to more intelligently balance setpoints with the physics of the building, taking into account a building’s historical data coupled with predictive technology.
LightingEnergy-efficient lighting and power-saving measures can dramatically cut energy waste due to lighting.
Seattle City Lights stated that the following actions will reduce the 18% cost burden from lights:
Often stores can run into electrical overload problems. This creates other compliance risks sometimes overlooked. HVAC/R systems also have to be fire code compliant. Therefore, plug loads must be compliant with fire hazard regulations. This includes Federal, State, county, and municipal fire code responses.
Reducing carbon footprints is an important goal on its own and can improve a grocery chain's corporate sustainability reputation and public image. Yet, reducing a carbon footprint across multiple locations can be a challenge.
Reducing carbon footprints at each store location is possible through the use of solar energy panels, backup batteries, and other distributed energy resources (DERs). Making use of intuitive Building Automation Systems aids in managing all the data points to achieve savings.
Because refrigeration systems put off carbon emissions, controlling your refrigeration energy waste reduces a store’s carbon footprint. Citing information from the Air Conditioning, Heating, and Refrigeration Institute, better refrigeration regulation helps the carbon footprint in the following ways:
Achieving actionable and measurable energy management objectives is as simple as having the right tools to do so.
Building Automation Systems can conduct system knowledge and store energy use in a way that goes beyond training or compliance guidelines. A data management tool affixed to the system allows management to learn in real-time what needs to be known. Then, this knowledge is packaged in such a way that it can inform decisions.
Energy management systems can prove those energy payback strategies that are more effective than others. This allows goal setting for payback to be under the two-year margin consistently. It can even cut that ideal time down.
With these essential KPIs in place, your profit margin is set to naturally progress. This is even better than quarter sales forecasts, market evaluation, or even marketing tactics. Because your grocery store is using the known formula that makes it profit year-after-year, and adapting it to operate at the least overhead cost ratio possible.
Refer to our case study outlining how PhoenixET’s solution was able to help a national grocery store chain achieve a 4% energy reduction with no capital expenditure. This was a $1-1.5 million savings.
Grocery managers face unique challenges. From disparate building control systems to complex refrigeration systems and other customer-facing machines, facility and store managers are tasked with continually monitoring temperatures and set points through a manual process that takes them away from their other responsibilities.
Using PhoenixET's Energy Management Solution, we can remotely monitor and log historical data to identify problems before they are realized.
We partner with our grocery stores and offer:
Please visit us at phoenix.com for more information.