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Food Lion, LLC:
In Practice
Food Lion, one of the largest supermarket chains in the United States, has more than 1,220 stores in 11 Southeastern and Mid-Atlantic states. More than 400 Food Lion stores have achieved the ENERGY STAR label designation and the chain has a portfolio-wide energy performance rating above 75. Food Lion became a partner in the US Environmental Protection Agency's ENERGY STAR® program in 1998, and has received ENERGY STAR partner awards in 2002, 2003, 2004, 2005, 2006 and 2007.
Retail Partner Since 1998
Awards & Recognition
- Leadership in Energy Management 2003
- Sustained Excellence 2007,2006,2005,2004
- Sustained Excellence 2008,2002
Contact Information:
Food Lion, LLC
2110 Executive Drive
Salisbury, NC 28145
704-633-8250
In Practice
1: Make Commitment
Any organization working to increase its energy efficiency levels year after year knows that the ability to cut consumption becomes increasingly more difficult as the low-hanging projects are picked off. Yet despite this increasingly difficult assignment, Food Lion continues to push its energy efficiency efforts and, as a result, has been able to reduce energy consumption by as much as 10 percent each year - year after year.
Energy efficiency is a key focus for Food Lion's upper management. Between 2000 and 2005, Food Lion quadrupled its Energy Department staff to 14 individuals. Most significantly, Food Lion in 2004 added an EPA coordinator, who provides energy analysis and ensures that Food Lion monitors its direct and indirect environmental impacts. Food Lion's upper management encourages the energy team to pursue such projects as load control, peak-shaving generators and innovative procurement strategies.
Food Lion's aggressive efforts to reduce energy consumption have saved nearly $104.8 million in actual dollars. Food Lion estimates that the company's 2005 energy budget would have been nearly $46 million higher without the energy efficiency initiatives adopted in the previous four years. Between 2000 and 2005, Food Lion successfully decreased its kBTU/square foot by more than 25 percent.
1.1: Appoint an Energy Director
1.2: Establish an Energy Team
FOOD LION: Unified approach to decision making Energy costs are a grocer's second-largest expense and can easily consume as much as 10 percent of each store's costs. Controlling and reducing energy costs is critical as Food Lion works to keep customer prices low. Because of its commitment to energy efficiency and keeping prices low for customers, Food Lion nearly 10 years ago created an energy team to address energy management issues. In 2003, Food Lion reorganized several departments to create a unified department that reported to a single manager. In particular, Food Lion merged the energy management and maintenance departments under a common strategic sourcing manager of energy and maintenance. By bringing energy management decisions under one manager, Food Lion was able to save energy and money. In one year, integrated decision making helped reduce maintenance and energy expenses by several million dollars.
1.3: Institute an Energy Policy
Mission
Food Lion has a reputation for providing convenient grocery store locations with products at extra low prices. As part of our commitment to excellence, Food Lion will identify and implement improved financial and operational efficiencies in how we purchase and consume energy, striving to become a world-class leader in energy management within the supermarket industry.
Commitment to Energy Management
Energy Management will plan an increasingly important role in achieving our strategic objectives. Specifically, Food Lion's Energy Management Strategy is to:
- Support the organization's strategic plan to sharpen our pricing and promotion position, improve convenience of the shopping experience, enhance our fresh product perception, and achieve executional excellence.
- Support our commitment to our employees, the environment and the community in which we conduct business by improving the environment through active efforts to reduce energy consumption and pollution.
- Become one of the most efficient grocery stores in the world on a Btu per square foot basis.
2: Assess Performance
Establishing a multi-faceted approach
Energy-use data must be collected and analyzed to help managers spot trends in building and portfolio performance. Food Lion uses a multi-faceted approach, which includes tracking and analyzing data at both the facility and system levels, benchmarking energy performance and obtaining appropriate technical assistance.
Food Lionss benchmarking program is two tiered. At the macro level, Food Lion uses the ENERGY STAR Portfolio Manager, which evaluates property and portfolio performance through analysis of Food Lions electric and gas bills. The Portfolio Manager rates each store and automatically generates scorecards that allow Food Lion to compare stores to themselves over time, to the rest of the Food Lion portfolio, and to the rest of the grocery industry.
On a more micro level, Food Lion uses a special sub-metering system to monitor and analyze 17 different loads for each of its stores that have sub-metering in place. The sub-metering tracks energy consumption in such areas as HVAC, lighting, Deli, refrigeration, etc. Without sub-metering, a quick look at Food Lion's utility bill could flag a problem store. However, with sub-metering, Food Lion can quickly tell, for example, if an energy spike was caused by refrigeration, HVAC, lighting or any other area. The company's maintenance crews can then immediately correct the problems and, using the sub-metering system, know within 15 minutes if the entire problem has been corrected.
2.1: Gather Data
A foundation of knowledge
Without accurate raw data, an energy management plan is nearly impossible to develop. Food Lion works to capture and track its energy use data. Food Lion's multi-faceted approach to tracking, benchmarking and analyzing energy initiatives has made the company one of the most knowledgeable in the industry when it comes to understanding energy efficiency. Beyond this, the grocer routinely analyzes and tests new technologies that might unlock future energy savings.
By tracking energy data, Food Lion has been able to analyze energy use and make operational changes that have saved both energy and money. Food Lion saved 312 billion BTUs in 2005, greatly exceeding its own goal of reducing consumption by 300 billion BTUs.
2.3: Benchmark
Benchmarks show progress To determine the success of its energy management program, Food Lion needed the ability to measure its results against an established baseline. Food Lion developed an energy program based on internal and external benchmarking. Internally, Food Lion uses normalized quarterly reports, created by Facility IQ, to rank the efficiency of its stores by region. The energy team distributes these rankings to associates across the chain through individualized Performance Scorecards and Maintenance Scorecards, which detail the store's energy use, and provide a summary of quarterly energy and year-to-date capital and refrigeration costs. Food Lion posts the scorecards on bulletin boards and its intranet, and sends e-mail notifications to upper management. Externally, Food Lion compares how its stores are performing against similar stores in the country by using the EPA's energy performance rating system to generate ratings for each store. In 2004, Food Lion expanded its use of the rating system for supermarkets by partnering with Facility IQ and the EPA to generate automated monthly ratings within the Facility IQ environment. With this system, the Energy Team easily views trends on a monthly, quarterly and yearly basis, both internally and against competitors. Using this automated system has allowed Food Lion to quickly identify energy-wasting problems and see the results of energy-saving initiatives on a much broader level than in the past. Food Lion has used the EPA's energy performance rating system to benchmark 100 percent of its more than 1,200 stores, to identify more than 1,000 stores eligible to receive the ENERGY STAR designation, and to complete the ENERGY STAR labeling process for more than 400 stores.
2.4: Analyze Data
Real-time data analysis pushes the envelope
Since becoming an ENERGY STAR partner in 2000, Food Lion has implemented an exceptionally strong energy management program. To accomplish this, Food Lion needed to identify opportunities for increased energy efficiency.
Additionally, Food Lion's ability to track data at such levels gives the grocer leverage to convince their refrigeration suppliers to improve the energy efficiency of their cases by 50 percent resulting in a savings of tens of thousands of dollars per store annually.
2.5: Technical Assessment and Audits
Auditing and testing new technologies uncovers savings
To maximize energy performance, Food Lion continually explores opportunities for improvement. Energy audits and technical assessments help Food Lion identify these operational opportunities.
Food Lion also tests technologies to identify those stores that offer the greatest potential for energy savings. For example, in 2004, Food Lion tested technologies including skylights coupled with dimming sensors to practically eliminate daytime electric lighting of the back room; anti-fog film to replace anti-moisture heaters in glass cases; and high-efficiency case motor fans.
3: Set Goals
Food Lion's Multiple-Level Goals
Food Lion uses several levels of goals to continuously improve its energy performance. Food Lion has set a long term goal to "Become one of the most efficient grocery stores in the world on a Btu per square foot basis." To achieve this, Food Lion set an organization-wide annual goal of reducing energy consumption by 300 billion Btus for 2003, and set goals at all levels of the organization to help the company achieve its overall goal.
3.1: Determine Scope
Goals set at many levels
Food Lion's organizational goal in relation to energy management is clear: to become one of the most efficient supermarket operators in the country on a BTU per square foot basis. To accomplish this, Food Lion needed to set goals and track progress.
At the facility level, Food Lion has a goal to ensure all new stores qualify to earn the ENERGY STAR. Food Lion also uses the EPA's energy performance rating system as the basis for the energy portion of the chain's individualized Performance Scorecards and Maintenance Scorecards. At the process and equipment level, energy performance goals drive increased efficiency for refrigeration and HVAC equipment. In addition, Food Lion ties incentive bonuses to goals for the maintenance associates. Food Lion has reduced its energy consumption by more than 2.29 trillion BTUs since 2000, which is the sales equivalent of nearly $1 billion.
3.3: Establish Goals
Goal
Reduce energy use by 300 million Btus in 2003. All new buildings must qualify for ENERGY STAR label.
5: Implement Action Plan
Individuals create the team
In an energy management program, employee involvement is where the "rubber meets the road." Food Lion empowers its associates to achieve results within its energy program and encourages a sense of personal achievement.
Food Lion targets energy program efforts to specific employment levels, with the use of Performance Scorecards and financial incentives for maintenance personnel, energy awareness training for managers, and internal recognition for maintenance and retail associates.
5.4: Motivate
Food Lion - Rewarding Maintenance Staff
Food Lion's Energy Awareness Plan rewards maintenance staff by awarding quarterly bonuses for improving energy performance. Keeping maintenance staff motivated to save energy has helped Food Lion reduce its utility cost per store per week by 5.5 percent.
6: Evaluate Progress
6.1: Measure Results
Energy Program produces financial returns
Food Lion needed a way to measure the environmental and financial results of their energy saving initiatives. Food Lion's Energy Team integrates data from an outsourced bill handling provider and its internal accounting department to measure results and establish meaningful ways in which to communicate results to associates and stakeholders. For example, Food Lion states that the 312 billion BTU reduction from its energy program in 2005 has saved millions of dollars. In the past five years, Food Lion has reduced energy consumption by more than 2.29 trillion BTUs. In order to earn the same income Food Lion would have to sell nearly $1 billion worth of merchandise.
Food Lion's energy initiatives have had a direct effect on its status as a publicly traded company. Without the energy initiatives adopted in the last four years, its energy budget in 2005 would have been nearly $46 million higher.
7: Recognize Achievements
7.2: External Recognition
Exceptional Energy Achievements Get Noticed
Food Lion's energy management strategy is today a core value ingrained in its operations, philosophy and culture. Receiving recognition from third parties confirmed their position as a leader in their industry and boosts employee morale and company public image.
Food Lion's energy management initiatives have been written about in such publications as Supermarket News, Progressive Grocer, The Charlotte Observer, The (Raleigh) News & Observer, States News Service, Grocery Headquarters, US Fed News, The Virginian-Pilot (Norfolk, Va.), Environmental Design & Construction, Frozen Food Age, Energy Management and The Winston-Salem Journal.
