Foodservice Goes GREEN

How are some businesses making their operations more environmentally friendly? What can the supply chain do to help? This article answers these questions and more.

By Joseph Carbonara, Editor-in-Chief -- Foodservice Equipment & Supplies, 9/1/2007

In one of its most complicated and popular moves to date, the Coffee Bean and Tea Leaf instituted a customer-side recycling effort.

For generations, it seemed as if the concepts of good business and environmental friendliness, or sustainability, were traveling down two parallel highways, destined to never intersect. It's not as if businesspeople were opposed to the idea of being environmentally friendly, they just did not think they could do so and simultaneously achieve their goals and objectives. Environmentally friendly products were considered too costly or not potent enough to meet the needs of business. Nowhere has this been more the case than in the foodservice industry, specifically the equipment and supplies segment.

In the past, foodservice operators were reluctant to compromise production capabilities, durability or appearance to reduce their consumption of electricity, gas and water or the amount of waste they generated. So the kitchen remained an energy-intensive operation, meaning it continued to consume significant amounts of each resource.

Sometime over the past few years, though, this thought process changed abruptly. Now, not only is going "green" considered a good business practice, it's fast becoming an essential aspect of foodservice operation.

"Things just take time to incubate," explains Michael Oshman, executive director of the Boston-based Green Restaurant Association. "We have been around since 1990, pushing and pushing and pushing restaurant operators to become more environmentally friendly. But all of that movement and work has eventually come into place over the past year."

Exactly what triggered foodservice professionals to show such an interest in all things green can't really be traced to any one specific moment or development. Rather, this heightened awareness seems to be the byproduct of a series of steps.

One such development is a subtle but important generational shift. Many individuals entering today's workforce learned about such concepts as ozone depletion throughout their school years. And they all grew up with some form of curbside recycling, Oshman says. For these reasons, the concept of environmental friendliness and sustainability is ingrained in their culture and has created a new type of business leader. "You not only have businesspeople who want to do well by their owners or shareholders, they also want to act environmentally responsibly," Oshman says.

By contracting with the GRA, Chicago's Blue Water Grill agreed to eliminate all Styrofoam products. Photo by Marc Berlow

As these people started to stake their claim in today's business world, former U.S. Vice President Al Gore released "An Inconvenient Truth," his documentary about global warming. Gore's Academy Award-winning project gave the green movement just the type of star power it needed to earn a place on the foodservice industry's front burner. "It articulated in a very concise and easy way all of the messages these environmental organizations have been saying," Oshman says. "A two-minute commercial or hour and a half movie really drives home these messages."

More important than the star power or the generational shift was the data scientists began disseminating on what still seems like a daily basis. These studies demonstrate the effect greenhouse gases, an operation's carbon footprint and other acts of resource depletion have on the environment. "It's one thing for the environmental groups to say it, but it's another when the scientists say it's reality," Oshman says. "And most rational people looking at this say they want to be on the right side of history."

Basically, most people have come to the inevitable reality that the environment is here to stay. "This is not going away and we need to take the steps now to make the changes as fast as we can that will impact our environment," adds Barry Skown, director of restaurant feasibility and conception for San Francisco-based Kimpton Hotels and Restaurants.

One could easily point to any of these developments as a potential turning point, but the reality is this boom in environmental awareness developed over time, taking a while to generate meaningful results. Oshman sums things up best when he says, "It's like water dropping on a rock. When it happens and you look at it for the first few minutes, you see nothing. You look back a year later and you see an indentation. And 10 years later you see a bigger mark."

Regardless of how it all started, the foodservice industry remains awash in a tidal wave of green. "It has not really sprung out of nowhere, but it's reaching a head now not only across the restaurant industry but all industries," says Chris Giarraputo, corporate executive chef for BR Guests Restaurants, New York City. BR Guests operates 15 restaurants. "With the scientific studies coming out now, it's something you can no longer ignore."

Looking to help its members and the industry ride the green tidal wave, earlier this year the National Restaurant Association formed a green task force to lead its environmental initiatives. "There was a lot more going on out there than we realized - both on the chain and independent level," says Todd Mann, senior vice president, business development, The National Restaurant Association, Washington, D.C. "People were propelled by wanting to do their part. They are telling us this is where they want us to be."

Chef Joel Dennis leads the team at Blue Water Grill, Chicago, a Certified Green Restaurant. Photo by Marc Berlow

Getting foodservice professionals to acknowledge the need to adopt sustainable business practices was a critical first step. "We were cold-calling restaurants making arguments that were never made to them before," says the GRA's Oshman. "The discussion has begun but there's still a prevalent view that doing well for the environment will hurt the bottom line. But the sophisticated ones that read up on these things will find a very strong business case for doing so."

With individual members of the foodservice industry slowly starting to acknowledge a need to be more environmentally friendly, the next task at hand is getting them to act accordingly so it enhances their bottom line. As operators learn more about green products and practices, they start to realize sustainability may not cost as much as they once feared.

"The notion that going green is expensive has changed," says Mel Elias, chief operating officer for the Los Angeles-based Coffee Bean and Tea Leaf. "Given the choices we now have, it is economically viable for us to go green. What was an innovation five years ago is now something that responsible companies should do. And in five years, it's something that you will need to do."

But where to start? After all, the notion of going green is a pretty large one. "What we wrestle with is this is a huge area and there's lots of parts to it. And if we talk big picture we do lose people," says the NRA's Mann.

So in this instance, size is critical. "When you are trying to change awareness on this scale, you first have to present them something manageable," Mann says. "That way, it is easier for them to get their arms around it. We thought we had to pursue the strongest business case we could and provide the lowest hanging fruit possible."

Oshman echoes Mann's sentiments and adds, "If it's hard, you will get the very dedicated, diehard people doing it. If it is easy, you will get everyone to do it."

Starting Small
That approach seems to ring true with operators. "Every step that you take is valuable. Start small and get bigger," Giarraputo advises. "Do the things you know you can do and be successful at and then move on to bigger things. You have to build a base and build a culture for it. We have found it can't be from the management down. It has to be from the staff up and we all have to work as a team to accomplish this."

To help operators navigate what has become a sea of information about environmentally friendly products and practices, associations like the GRA and NRA continue to develop a collection of online resources for their members and, to a certain extent, the industry at-large. For example, GRA members can access what Oshman describes as the world's largest database of environmental solutions, which serves as a guide of endorsed products, including equipment.

This approach appears somewhat similar to an online resource the NRA plans to introduce later this fall, one that the association hopes will serve as a central resource for operators looking for more information on green initiatives. "We would like to show operators a list of certain pieces of equipment and the resources they consume," Mann says.

A simple point of entry is what the GRA's Certified Green Restaurant program represents. To become a Certified Green Restaurant, an operator first contracts with the GRA for one to five years and in doing so, they agree to abide by the association's 11 environmental guidelines.

In addition, the operators commit to implementing a recycling program, operating Styrofoam-free and completing four environmentally friendly changes per year, regardless of how advanced in this area they previously were. And because each restaurant and the market it serves is different, the GRA conducts an environmental assessment of each operator's business. The data this analysis produces serves as the impetus for the list of four changes the GRA will request the operator make.

To help conserve water and the energy used in heating it, the Los Angelesbased Coffee Bean and Tea Leaf changed the spray valves in all of its stores.

So for a restaurant to be certified green in 2008, it needs to be four steps ahead of where it was in 2007. And because this cycle repeats itself over the life of the contract, it keeps the restaurant moving forward as it strives to adhere to the GRA's 11 environmental guidelines. Given that these guidelines cover such a broad spectrum of environmental factors, Oshman feels operators will always have the opportunity to continue to reach higher.

"That ceiling is getting higher and higher. And, thankfully, restaurants are getting taller and taller," Oshman says. "The reason they are not hitting that ceiling is that it continues to go up due to the fact that technology and innovation are outpacing restaurant gains. There's nothing you can bring up that is not part of the environment. It encompasses everything."

Still, Oshman points to a couple of relatively easy points of entry into the green movement. "You not only want to make a change, but make one that will stick," Oshman adds.

One operator embracing this approach is the Coffee Bean and Tea Leaf. The company changed spray valves on its sinks to be more efficient. "You end up not only saving the water but the energy needed to heat the water," Elias says. "It was a cheap replacement cost and it worked that much better. Everyone should do it regardless of whether they are involved in a green initiative. It now becomes an issue of store economics."

The Coffee Bean and Tea Leaf also switched to a more energy-efficient light bulb in its stores. Of course, given how much emphasis operators place on ambiance in their facilities, it may take some time to find the proper light bulb, making this change a little trickier. Still, something as simple as changing the type of light bulbs an operation uses can offer longterm energy savings, which makes this worth pursuing. "There are now a number of companies that produce options for us," Elias says. "We made sure the look and feel were the same, then we rolled out the program."

In addition, the Coffee Bean and Tea Leaf now has an employeereusable cup program in place to reduce waste. When taking a break, team members would grab a paper cup and fill it with coffee, tea or some other beverage. This would result in each team member using three or four paper cups per shift, which could represent a significant amount of waste. Now, each employee gets a mug to drink from during their shift. "That's a lot of paper cups we have eliminated," Elias says.

The most in-depth and complicated initiative the Coffee Bean and Tea Leaf has implemented is a customer-side recycling program. Basically, this program has patrons separate waste into two recyclable categories instead of just tossing out their trash. This allows the Coffee Bean and Tea Leaf to offer a more in-depth recycling effort at the store level.

In doing so, the chain works with the owners of the spaces it leases to ensure they, too, can handle the separated waste all the way through to pick-up. It is also important to ensure that the landlord's haulers can properly recycle the waste, which is not a given in all areas. Also, the Coffee Bean and Tea Leaf had to design and find space for the new recycling receptacles in the store and properly label them. "Getting customers to follow the instructions and getting team members to follow through was the easy part," Elias says. "Customers understood it right away. And that was our 'ah ha moment,' when we realized that there was huge awareness and people wanted to do the right thing."

“Given the choices we now have, it is economically viable for us to go green.” Mel Elias Chief Operating Officer Coffee Bean and Tea Leaf

For the Coffee Bean and Tea Leaf, starting a program like this was a natural extension of their corporate culture. Elias describes the 44- year-old company as being altruistic and wanting to give back to the communities in which they work. "We felt that the green initiative fit squarely into that mandate," he says.

With 575 units systemwide, including international stores, the Coffee Bean and Tea Leaf represents a sizable chain. So before making any enterprise-wide changes, the chain needed to start small. A while back, the GRA had contacted the Coffee Bean and proposed a program and in 2003 the chain rolled it out to its San Diego district.

"Much to our surprise, our team members endorsed this," Elias recalls. "And customers embraced it right away. It was a positive event for our own team members and boosted morale. It also was a point of differentiation because at the time nobody else was doing it." As a result of the program's success, the Coffee Bean and Tea Leaf management decided to roll it out to all of the company's U.S. stores.

Purchasing Energy-Efficient Equipment
With the green movement top-of-mind, operators looking to incorporate energy-efficient equipment into their facilities need to approach the purchasing process from a slightly different angle. Instead of focusing solely on an item's invoice price, they are broadening their perspective to determine how potential energy savings will affect the economic performance of their entire facility.

"If you are just looking at the up-front costs, you are being short-sighted and you really can't afford that," Giarraputo says. "If you are in it for the long haul, then you have to look at it in a much longer time frame. With energy costs what they are, it does not take you as long to get your payback as it used to."

Some operators take a more holistic approach to budgeting for new equipment. "We look at it as a one-time payment. That piece of equipment is generating savings throughout its life cycle," Skown says. "We budget for a capital reserve for each of our restaurants based on revenues. Part of this goes toward improving back-of-house or display kitchens. We use that pool of money to fund the replacements we need to do each year."

Of course, these operators may want to be as environmentally friendly as possible, but the fact remains that they operate a business and for that reason, they are not willing to compromise certain basic attributes. "Durability is the basic thing I am looking for. It has to be able to withstand our volume and abuse and because ultimately having to replace an item more frequently is the most wasteful practice," Giarraputo says. "It's always been an important part of the equation for BR Guests because having to replace an item mid-season costs you big money in terms of downtime and the actual purchase price of the item."

“We look at it as a one-time payment. That piece of equipment is generating savings throughout its life cycle.” Barry Skown Director of Restaurant Feasibility and Conception, Kimpton Hotels and Restaurants

As a step that fully embraces this approach, the Kimpton Restaurant Group has mandated that replacement equipment be energy-efficient and, if available, Energy Star-rated. This applies to each of the company's 34 units. "It saves our operating costs significantly in the long run," Skown says. "The more we can do to replace older equipment that burns gas and electricity at an alarming rate, it's better for our operations in the long run." And for emerging concepts, such as Boston-based Grille Zone, the notion of being environmentally friendly is a part of their corporate DNA. A quick-casual concept, Grille Zone opened in July and plans to expand over the next five years, according to Ben Prentice, the company's president and founder. The initial unit seats up to 25 people and features a menu of what Prentice describes as simple American food. "We wanted to focus on a very small menu with items that are very popular. And we wanted to make sure we do each item very well," says Prentice.

Looking to procure as much energy-efficient equipment as possible, Prentice and his team conducted a simple cost-benefit analysis to determine which items best fit their menu and style of operation. In doing so, they used a list of the most energy-efficient products by category provided by the GRA. This list includes the expected operating costs and the payback anticipated over the life span of the individual units. With this information in hand, the Grille Zone team also looked at the production capacity for each item and then made the best decision for their operation.

"It really came down to dollars and sense," Prentice says. "There may have been a case where we did not choose the first piece due to price differential, but there were no pieces chosen that were not toward the top of that list. It was really easy to do this with the GRA's help."

The selection process was made easier by the fact that energy-efficient equipment can provide a return on investment that trickles all the way down to an operator's bottom line, unlike in other industries. "You won't see that in the upholstery made from recycled materials or in the green cleaning materials," Prentice adds.

How Dealers and Manufacturers Can Help
As the market stands today, foodservice equipment and supplies dealers and manufacturers have ample opportunities to help their customers become more environmentally friendly and sustainable. "Do suppliers have a responsibility to be part of this change? I think we all do," says Mann. "And they should take a leadership role in this."

“Do suppliers have a responsibility to be part of this change? I think we all do.” Todd Mann Senior VP, Business Development The National Restaurant Association

When consumers look to purchase a new household item, say a dishwasher or washing machine, the U.S. Department of Commerce's Energy Star program serves as the defacto gold standard that highlights those truly energy-efficient products. But in the commercial foodservice sector, quite the opposite tends to be the case, as Energy Star has not emerged as comprehensive a reference.

That's due, in large part, to the fact that the program only covers six product categories: dishwashers, fryers, hot-holding cabinets, ice machines, solid-door refrigerators and freezers, and steam cookers. While this list of product categories continues to slowly grow and evolve, the simple fact remains that it represents but a fraction of the equipment available in today's foodservice market.

So for dealers and manufacturers it may appear simple, but there's no arguing it's essential: communicate. "Suppliers need to have this be a part of their messaging when they talk to their customer base," Mann says.

Indeed, it seems that operators would like their suppliers to be more proactive when it comes to introducing energy-efficient and environmentally friendly products to the equation. "We end up having to ask a lot of questions," says B.R. Guests' Giarraputo. "They can help us more by communicating better what their energy consumption is when comparing a new model to an older machine."

Simply communicating more frequently will not be enough, however, for equipment dealers and manufacturers to meet their clients' expectations. For example, offering a more uniform base of comparison for a specific product category would be helpful, Giarraputo says. This would include such aspects as consumption of electricity, gas or water, depending on the item and local operating conditions. "More than just saying they are energy-efficient, they need to give me real numbers and show how they have improved this year over last," he adds.

New York City-based B.R. Guests Restaurants operates 15 units, including the DC Park Dining Room, which is a Certified Green Restaurant.

Also, in many instances a product's natural evolution may make it more energy efficient or environmentally friendly. In these instances, the dealers and manufacturers should spell this information out in clear and concise terms for their operator customers.

And the operators' expectations for their manufacturers continue to mount. "The manufacturers who make the heavy equipment have to make sure not only are these pieces durable, but that they will also give me the most bang for my energy buck," Giarraputo adds.

The way the manufacturers and their dealer partners present this information to operators represents another important aspect. "Make the information understandable," Giarraputo says. "When you look at the specs of many pieces of equipment, it's not easy to understand. If you buy a lot of equipment, you get familiar with reading specs. If you don't, you are not always getting information you can understand."

In addition, the claims suppliers make need to be relevant to the operator and the area they serve. Giarraputo offers one such example. "Something can be recyclable but if there's no mechanism to recycle it, it will end up in a landfill," he says. "So, make real claims that you can back up."

Working with start-up operations represents one of the biggest opportunities for equipment dealers and their manufacturer partners to position themselves as being a resource for all things related to the environment. For example, when a new operator sees that some of the more energy-efficient equipment can cost more than other less efficient models, they might get cold feet and opt to head in the other direction. That's where suppliers and organizations like the GRA can help.

"We need to look at the rebates to show them they can knock a few thousand off their bottom-line costs," Oshman says.

And in doing so, the supplier needs to emphasize total operating cost for the item's life cycle. "You have to say, over three years, here is how much one product is going to cost you over the other one," Oshman says. "And then have them look at utility bills. Are they going up or down? This is where their investment gets stronger and stronger and we have to educate them about that."

New York City-based B.R. Guests Restaurants operates 15 units, including the DC Park Dining Room, which is a Certified Green Restaurant.

Dealers and manufacturers should help their customers calculate the five- and 10-year costs associated with every piece of equipment they supply. And in doing so, they should bring this down to a local level, using the utility costs for a city region in their calculations. This should help them provide more meaningful data. "Then you can make an educated decision," Oshman adds.

In looking to capitalize on this tidal wave of opportunity, some dealers may opt to develop "green" catalogs for their customers. Oshman cautions those doing this to proceed carefully to ensure the products claiming environmental friendliness fully back up these assertions. "The challenge with depending on a distributor only is that they are not an environmental organization," Oshman adds. "They are a distributor so they might not be as up-to-date on the nuances that we are."

As an environmental organization, the GRA is happy to assist dealers in this area. "If you are a distributor working with one of our restaurants, we are going to help you get into better stuff so you can help serve our client," Oshman says. "We can help them with their whole line and get better products into their inventory. It's really the same things we do for the restaurants, which is marketing and education."

But many operators would like to see a growing number of heavy equipment manufacturers start to develop more energy-efficient products. "It's analogous to the whole change that's going on in the car industry with hybrids," Skown says. "The big three in Detroit seem to not want to change their direction. But the companies that have changed are showing that it can be done. Anything that can move along the process would be helpful to the industry.

"For the short term, the industry availability of equipment is dictating what we buy. That's making the selection process for us," Skown adds. "We are putting in as much energy-efficient equipment as possible."

Of course, regardless of whether dealers and manufacturers have jumped onboard the green movement today, it appears to be only a matter of time before all or most of them will be part of the effort. "The supply chain will evolve and it will continue to do so," Elias says. "It's all going to be a quick transformation. As restaurant operators start demanding these types of products, the supply chain will start to provide these products. They want to be profitable, too.