Energy can be a profit center, if you let it.
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 the plates spinning in the air if they are to maximize profits and head off a potential business crash.
Operators are conditioned to keep a tight rein on food and labor costs, but 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 the rising rates of your property taxes, but food, labor, and energy are "the big three." Just like the cost of food and labor, you can tame your energy costs.
According to the Environmental Protection Agency (EPA), restaurants use 5 to 7 times more energy than office buildings or retail stores. 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 a step-by-step roadmap to help you become the master of your energy fate. Our first installment begins by looking at energy in a completely different way.
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, between meager survival and a thriving business. Unlike food and labor costs, energy is 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. Because energy bills reflect only the total therms and kilowatt hours, they don't provide information that could help you be proactive in reducing them.
According to information from EPA Energy Star, fully two-thirds of that energy cost traces back to food preparation and HVAC (heating, ventilation, and air conditioning). 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 could reduce your usage by even 20 percent, imagine what would happen 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 an "energy-smart" mindset, 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.
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:
Replace incandescent bulbs. Substitute compact fluorescent lamps (CFLs) for standard lightbulbs wherever possible in your back-of-house operations. They pay for themselves in less than four months, and from then on, it's money in the bank. CFLs also last 10-15 times longer than the old-school incandescents.
Clean refrigeration condenser coils. You'll be shocked at what you find back there. Manufacturers cite them as the No. 1 reason for service calls. Keeping the coils clean also extends the life of the equipment.
Check your water heater. Set just 10 degrees too high, a water heater can cost you an extra $650 a year. The amount might not seem huge, but if someone dropped an extra $50 bill into your wallet each month, it would bring a smile to your face. Calibrate your water heater to the manufacturer's recommended temperature for your most critical user of hot water, 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. For more information about reducing your energy bill, visit the Powerhouse Dynamics website.