An Absence of Low Hanging Fruit and the Benefits of My High Climb into Grocery Retail

EDF Climate Corps fellow | July 1, 2009

By Christopher Anderson, MBA candidate, Pennsylvania State University, 2009 Climate Corps fellow at Ahold USA, member of Net Impact

The fruit is always fresh. The foggy haze retreats. The sun shall shine brightly. My endorphins rage after the ascent.

So has gone my climb into the world of grocery retail.

With nation-wide profits at around 1.6% and average energy spend at 1.3%, the grocery retail industry has long-recognized the benefits of energy efficiency. The low hanging fruit is long, long gone. The industry largely recognizes that improvements in carbon foot printing and energy management are vehicles for discovering opportunities to smartly implement any of a sea of new energy efficiency technologies or process improvements that promise very positive net cash flows.

Ahold, where I am working as a Climate Corps fellow, is an international group of quality supermarkets based in the U.S. and Europe.  Its U.S. stores include Giant-Carlisle and Stop and Shop/Giant-Landover.  In 2008, Ahold's net sales topped $36.4 billion.

The foggy haze retreats

Touring one of our Giant-Carlisle retail facilities, I saw several of our new anti-fog film-coated freezer doors. The coating eliminates the need to run fog-reducing door heaters, thereby also reducing the cooling load on the refrigeration system. I loved it.

"Why can't we just retrofit all our doors with that stuff?" I asked.

Our Engineering Director informed me that it's expensive. The doors are pre-treated in the factory, and according to him we'd have to buy entirely new doors. Unconvinced, I did additional research. I discovered a GE anti-fog product that will likely allow us to retrofit and with fantastic results: If implemented at 2/3 of our stores, we stand to reduce CO2 emissions by over 26,000 metric tons per year. The financial implications appear equally as attractive.

And the sun shall shine brightly

I'll likely be recommending a skylight retrofit project that may increase sales, reduce energy expenditures and cut emissions. Natural light is free and has long been known to be the best form of light available. Numerous studies have shown improvements in employee morale, productivity and even increased retail sales attributable to natural light. Though either initially not considered or deemed not viable, I've changed some minds through my even conservative analysis. If skylights were retrofitted at 1/3 of Ahold USA stores we'd likely save over 13,000 metric tons CO2 per year with a 5 year NPV nearing $30 million.

Surprisingly, one of my greatest assets in finding projects has been my inexperience. I'll ask the naïve question. I'm highly satisfied with the answer nine times out of ten, but there's opportunity born in that single occasion when the answer leaves something to be desired. Experience is valuable because it allows the individual to apply any of a set of workable solutions for a prior dilemma to a present, analogous problem. The experienced individual, through application of schemas, can work efficiently by freeing up cognitive energies for other tasks while moving on autopilot through complex, but routine, tasks.

The advantage of experience is precisely its sole disadvantage. The predilection toward moving through tasks quickly also limits perception and consideration. Constant re-evaluation tends to yield to pragmatism and expediency, and so there is value in my inexperience. I'll see what veterans don't.

Although initially concerned about my ability to find good projects in this environment, I've been pleasantly surprised. It's a higher climb, to be sure, but there are great returns given the maturity and scalability of the grocery retail industry, and the fruit is always fresh.

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