13 ways to painlessly improve profitability in 2013: Energy as a profit center
By Jay Fiske

As the economy and the foodservice industry appear to be gaining steam, are you prepared to reap the full benefit? There are still plenty of business challenges that require both business acumen and financial agility. Whether it’s food costs, labor costs or overhead, operators must keep all of the plates in the air and spinning if they are to maximize profits and head off a potential business crash before it literally brings down the house.

While operators are conditioned to keep a tight rein on food and labor costs, when it comes to overhead, many throw up their hands in frustration and resignation. You may not be able to change the terms of your lease or rising property taxes, but energy, along with food and labor, are “the big three.” And you can tame your energy costs just like you do the other two.

According to the Environmental Protection Agency (EPA), restaurants use five to seven times more energy than office buildings or retail stores. For quick-service establishments that can reach ten times that of other commercial buildings. Did you know that just one typical electric deep-fat fryer uses more than 18,000 kilowatt-hours (kWh) and costs more than $1,700 in an average year? That’s more than $140 a month for just one piece of equipment.

We hope you’ll join us as we bring you 13 weekly installments that provide a step-by-step roadmap to help you become master of your energy fate. It begins by looking at energy in a completely different way.

COMMUNITY PULSE

What is the biggest energy expense in your facility?
  • 1. Refrigeration
  • 2. HVAC
  • 3. Lighting
  • 2. Other
1. Energy as a profit center

Yes, it does turn the P&L on its head, but energy can make the difference between profit and loss, meager survival and thriving business. Unlike food and labor costs, energy is much more nebulous. It is the only widely purchased commodity that is bought without knowing how much it costs until after it has been used. When the bill lands on your desk with an ominous thud, you’re left to wonder where it all went. And because energy bills reflect only the total therms and kilowatt hours, they don’t provide information in a way that allows you to take proactive action.

According to EPA ENERGY STAR®, fully 2/3 of that energy cost traces back to food preparation and HVAC (heating, ventilation and air conditioning) and it’s easy to see why. You can hear that big equipment gobbling energy, eclipsed only by the sucking sound as the dollars fly out of your till. If you reduce your usage by even 20 percent, what would that do to your bottom line? Now, that’s a profit center!

Reining in energy costs doesn’t have to be rocket science. All it takes is “energy-smart” mindset, making some simple changes, and a way to measure your progress. This series of articles will show you how to get started by benchmarking usage, identifying your hiding energy hogs, making some simple operational changes, and bringing your employees into the game as the front-line soldiers. For more information about reducing your energy bill, visit Powerhouse Dynamics.

To get you started, here are three quick energy-saving tips from Foodservice Technology Center (FSTC), the industry leader in commercial kitchen energy efficiency and appliance performance testing:
  1. Replace incandescent bulbs. Substitute compact fluorescent lamps (CFLs) wherever possible in back-of-house operations. The payback is less than four months and from then on it’s money in the bank. They also last 10-15 times longer than the old-school incandescents.
  2. Clean refrigeration condenser coils. You’ll be shocked at what you find back there. Manufacturers cite it as the #1 reason for service calls. Keeping the coils clean also extends the life of the equipment.
  3. Check your water heater. Set 10°F too high, it can cost an extra $650 a year. While it doesn’t seem like a huge amount, if someone dropped an extra $50 bill into your wallet each month that would bring a smile too your face. Calibrate it to the manufacturer’s recommended temperature for your most critical hot water user, the dish machine.
This is just the beginning of our energy-saving journey. We promise it won’t be expensive, difficult or painful. It’s a series of “baby-steps,” if you will, but they all add up to “grown-up” profits.

Jay Fiske is vice president of business development for Powerhouse Dynamics, developers of the eMonitor energy, asset and water management platform for homes and small commercial facilities. Fiske is responsible for leading the company’s overall sales and marketing strategy, developing and growing market channels, and establishing strategic partnerships.