Serving up Savings
Arby's Restaurant Group has taken an aggressive stance with regard to its third largest and most controllable expense: energy. Faced with rising costs, the chain developed a strategic energy management plan that identified more than $5.5 million in potential annual savings.
Arby's worked with Ecova, a Spokane, Wash.-based energy and sustainability management company, to develop a short- and long-term road map for actionable energy savings and measurement. (Arby's has a history with Ecova, using its expense and data management solution.) The chain's leadership team met regularly with Ecova to develop a plan that would ensure energy management becomes a norm of Arby's culture and standard operating procedures.
"Ecova's unique approach to strategic planning engaged Arby's leaders across different functional groups to help us develop an energy strategy that was truly built for our success — considering the unique strengths, needs, concerns and constraints of our organization," said Scott Boatwright, senior VP operations, Arby's Restaurant Group, Atlanta, which has more than 3,400 restaurants system-wide.
The planning process resulted in a clear, data-driven, actionable plan, one that made a strong business case for energy reduction. The plan emphasizes brick-and-mortar investment opportunities and initiative management recommendations. Regarding infrastructure investments, Ecova supported Arby's finance team in prioritizing opportunities and developing a multi-million dollar capital expense proposal that generated an internal rate of return of 97%.
The proposal was approved by Arby's board, and the project was started in the first quarter of 2013. It's now in the install phase, which will continue through the end of the year.
"We will be analyzing results of the project well into 2014," Boatwright said.
The program involves mostly those locations owned by Arby's, with varying levels of participation. Some are getting new equipment, but all are being asked to participate in the new behaviors emphasized by Ecova, according to Boatwright.
As part of the process, Ecova conducted energy and water audits in a sampling of Arby's units. The audits identified a target list of 11 low-cost energy-efficiency measures and capital investment opportunities with an annual energy savings of more than $1 million. The measures include behavior modifications to on/off schedules, including water (average water use per restaurant), kitchen equipment, HVAC and lighting.
Other changes and equipment modifications highlighted by Boatwright include:
- Reducing water heater thermostats to supply 135-degree water to meet dishwashing and hand-washing needs;
- Installing low-flow faucet aerators on hand sinks and vegetable sinks and programmable thermostats and low-flow spray valves at the dish sink;
- Adding more energy-efficient refrigeration and lighting solutions; and
- Changing out electronically commutated motors in the walk-in freezer and coolers.
"Additional work will take place in 2014 to include items like additional lighting upgrades and irrigation controls, which will yield incremental savings," Boatwright added.
Employee buy-in to the plan, particularly with regard to behavior change, has been critical.
"We've modified our on-boarding materials, as well as employee training materials to drive the 'efficiency matters' philosophy through the organization," Boatwright said.
Arby's has set an initial goal of reducing overall energy intensity by at least 6% (from 2011 baseline) for 2013 and 15% by 2015, the VP added.