Sustainability

While the grocery industry has slim margins, food retailers often don’t realize how much money they are wasting by not adopting more sustainable practices, according to the Ratio Institute. 

The nonprofit, which works with partners such as Weis Markets, the Independent Grocers Alliance and Raley’s Supermarkets to advance grocery sustainability, believes it can find $15,000 worth of energy savings in a quick trip through a store and also calculate how much product a retailer would need to sell to make up for that profit loss. 

Like a Geico commercial but for grocery sustainability, “$15K in 15 minutes” is the organization’s consulting pitch to appeal to grocers’ desires to cut costs while also boosting eco-friendly measures. 

That profit loss, which is usually due to five energy inefficiencies, is equivalent to just under $271,000 in annual sales, said Ratio Institute co-founders Jonathan Tan and Peter Cooke.

“We thought of these things to be like really quick, easy wins for almost any grocery store in the U.S.,” said Cooke, noting that most don't cost much, if anything at all, to address. 

The Ratio Institute made its cost-savings to sales equivalency calculation based on the calculation that a $1 decrease in electrical costs has the same effect on their gross profits as $18 in sales.

In several interviews and a webinar, Tan and Cooke explained why five energy usage practices are costing grocers thousands of dollars and what retailers making those mistakes can do. Here’s a rundown of what they look for in a typical “$15K in 15 minutes” session:

1. Improving appliance efficiencies

Before even stepping inside the store, Tan and Cooke look to see if there are outdoor vending machines. Those are one of the several appliances that they group under the “appliance inefficiency” assessment, along with lighting for indoor vending machines and heated wrapping machines. 

For example, a soda machine in Vermont is heating the soda all winter to keep the bottle from freezing and expanding, while a Redbox movie rental machine uses just as much — if not more — energy than typical soda machines do and uses refrigerants to keep the discs from melting, Cooke said. Retailers can instead do away with those vending machines, they said. 

Inside the store, they look for heated wrapping machines, which are often found in the deli, seafood and meat areas and sometimes in the bakery section, Cooke said. Sometimes those heated wrapping machines are left on overnight or at other times when they are not in use.

In a store’s break room for employees, Tan and Cooke look to see if there are vending machines, and, if so, if they have lighting. 

“Everybody that works at that store knows that Pepsi is being sold [in that vending machine],” Cooke said. “It's not like it needs to be illuminated like that. If you're a chain and you have 200 stores, it actually is a great cost reduction to just, at the very minimum, unscrew the light bulb and so you're not paying for the electricity for the lighting.”

Bundling together the vending machines inside and outside of the store and heated wrapping machines, Tan and Cooke have determined that grocers spend $2,000 annually on unnecessary appliance usage, worth $36,000 in sales.

2. Unblocking return air vents

Heading out to the sales floor where there’s open refrigeration, Cooke and Tan look to see if the return air vents at the bottom of the open cases are clear or blocked. In the produce section, for example, lettuce can clog the air vents, Cooke said. 

Those air vents are designed to recirculate cold air that’s inside the open case and prevent the air from “dumping out,” Cooke said.  

A blocked return air vent that is 20 feet — what Cooke and Tan have found to be the average length — costs stores $2,336 annually, which is equivalent to $42,573 in sales, they said. That breaks down to an estimated cost of 32 cents per foot of blocked return air per day based on 12 cents per kilowatt hour. 

3. Reducing air infiltration

How well grocery stores are sealed impacts how much of the store interior sucks in humid air from outside, Cooke said. 

“Buildings are under negative pressure so the warm, humid air from outside, even if it's like 20, 30 [degrees outside] has still got humidity in it but that air is being drawn into the store,” Cooke said, adding that humid air is “kryptonite” to refrigeration equipment. 

Air infiltration can result in a roughly $3,600 profit loss annually, which is worth about $64,800 in sales, Cooke said. 

To address this, grocers need to appropriately weatherize their stores by making sure the cracks and crevices around windows and doors are properly sealed and by making sure that they are diligent about keeping their receiving doors closed.

“You want to maintain a building at positive pressure. ... When you go in and out of buildings, when you open a door, you feel a slight gust of air either in or out. That gets of air should be going out,” Tan noted. 

4. Keeping walk-ins closed

Keeping one walk-in door closed for an additional 4.5 hours each day for a year is worth $4,920 dollars, with a sales equivalency of $88,560, Cooke said. The Ratio Institute determined that with their partner Weis Markets, which found that walk-in freezer and cooler doors in the backroom were needlessly left open that long each day, Cooke said. 

“Nobody's meaning to leave the door open purposefully to try to make the company waste money,” Cooke said. “It's just they're in a rush, but if they consider the fact that by leaving that door open just for a few minutes here and a few minutes there, it adds up to 4.5 hours each day, they have to sell almost $90,000 worth of stuff to cover that.”

Cooke said some stores can have up to eight or 10 doors — posing potentially an even bigger financial waste if more than one door isn’t properly used. 

Some grocers have resorted to putting signs on the doors that remind associates to keep them closed.

5. Maintaining walk-in doors

The condition of gaskets, which seal walk-in cooler doors, can also have a big impact on energy waste. 

“A lot of the [cooler and freezer] doors that Jonathan and I look at have banged-up gaskets and they're leaking,” Cooke said. “And we can tell that the freezer doors are leaking the warmer, humid air on the outside condenses and freezes.”

While it can be harder to spot on cooler doors, grocers should watch out for gaskets that are “flapping around,” because that could be an indication of a leak, Cooke said. “They have a hard time knowing which doors have leaky doors and where they are and they don't really have that systemization in place to know which doors to get to.”

The average year-long leak on a walk-in freezer door costs roughly $2,190 — equal to $39,420 in sales, Cooke said. 

Grocers can often dismiss leaks as a $2,000 loss that isn’t worth fixing, without realizing those leaks are requiring nearly $40,000 in sales to compensate for, Cooke said. 

“When it's a single store owner who's really trying to maintain a 1% profit margin, this could be a great exercise,” Cooke said. “But if you're a 200- or 400-store chain and you have one leaky door at each store, it actually becomes a gargantuan number in terms of increased cost, potential cost savings and potential maximization of profits if they address it,” Cooke said.  

Harmons Neighborhood Grocer, a family-owned and locally run Utah grocery chain, moved sustainability to the forefront of its mission when it brought on its first-ever director of sustainability, Kate Whitbeck, back in 2020.

Prior to Whitbeck’s hiring, the grocer never had a role dedicated to managing greener efforts that went beyond food waste, Whitbeck said in an interview. In her new position, Whitbeck focuses on the implementation, execution and measurements of sustainability initiatives, like the nearly completed rollout of LED lighting and the addition of cardboard balers at stores.

Harmons currently operates 20 supermarkets and a flower shop, with some locations also offering services like pickup and delivery, a pharmacy, a fuel stop, electric vehicle charging stations, a cooking school and even a post office. Since Whitbeck’s arrival, the grocer has stepped up its efforts to integrate sustainability into its overall operations.

"I don't think we had particularly concrete objectives around sustainability. Before that I think the focus was primarily on waste," Whitbeck said about Harmons before she was hired. "It's sort of broadened and deepened just because they now have one person whose sole focus is on sustainability."

In an interview with Grocery Dive, Whitbeck shared how she advances Harmons sustainable practices and balances those projects with consideration for the company’s bottom line.

This interview has been edited for length and clarity.

GROCERY DIVE: How does road mapping for sustainability initiatives play out at Harmons? How do you make sure these goals line up with the company’s budgeting plan?

KATE WHITBECK: Harmons has had a number of carbon footprint analyses performed over the years. Before my time, they outsourced these analyses and that was one of the first things I embarked on. I conducted a carbon footprint analysis in 2021 that gave us some baseline data that we can measure progress on going forward. And it also just sort of helps us establish objectives in each of the areas where we are evaluating various metrics.

We don’t have a sustainability budget, per se. I think it’s sort of on a project-by-project basis. We look at the top priorities and what’s going to work within the budget [for 2023], and it’s just a negotiating process with the board, essentially. 

How do you prioritize planning and implementing new sustainable strategies? 

I’m trying to let that carbon footprint analysis be the guide. If it were up to me, we really would take sort of an emissions focus in terms of goals and objectives and focus entirely on “where can we make the greatest impact?” and “which changes do we need to focus on to make the greatest impact?”

But the challenges are [that] some of these changes require significant capital investment, so I can’t do everything I want to do all at once. But we have to pace ourselves and figure out “what are the priorities in each of the different areas?” and “what’s going to make sense this year?” and then what the focus is [for 2024]. 

What role does finance play in Harmons’ sustainability efforts? How do you bring sustainability efforts into financial planning? 

I understand some individuals are obviously swayed by a financial argument more so than an environmental argument. So I try to spell out if there’s an ROI on a particular investment. Obviously, not everything we do related to sustainability can show a cost savings but, fortunately, with most interventions related to energy or waste, there are cost savings to be had. So those are obviously easier sells than some of the other interventions.

How long do sustainability practices typically take to start generating a profit for the company?

I don’t think there’s a typical number, it’s very specific to the initiative and to the location. I think it’s obviously anything that’s five years and under, it’s going to be an easier sell. There are some things that I think are our long-term investments that are definitely worthwhile, but those tend to be a harder sell, certainly. 

Historically, we were diverting cardboard in compactors, and in most of our stores we are shifting over to doing that in a cardboard baler and so that’s usually about five years or less in terms of an ROI. But again, it depends on how far that store is from the cardboard recycling destination and how much cardboard they generate, so those are the two factors that impact whether that’s a longer or shorter ROI.

We only have solar panels on one store and that has a much longer ROI. So those types of initiatives that require a considerable capital investment, and then ongoing maintenance and repair, and then the factors related to changing electricity rates are a harder sell just because there are so many unknowns in the future that you can’t always calculate in advance.

The jury is still out on the solar panel’s ROI.  

Besides the carbon footprint calculator, how do you measure the performance of Harmons’ sustainability efforts?

I kind of divide them into metrics that the store has some control over, and then to those that are more influenced by sort of the equipment and the systems in the store and the age of the store.

All of our stores are evaluated according to seven different metrics on a monthly basis. And so our stores tend to be fairly competitive, and so these are things their associates are engaged in. 

So we’re looking at waste diversion. What percentage of the waste are they diverting from the landfill at each store? We’re looking at tonnage rates. How full are their compactors when they’re being hauled? That’s a measure of, if your compactor is half full, there’s a greater emissions footprint per ton of waste and you’re spending a larger amount per ton of waste to dispose of it.

We’re also considering reusable bag sales. Are stores giving bag credit for every bag that comes through checkouts? They conduct different audits each month to make sure that they don’t have contamination they’re recycling in their green waste. They have a training score. Are all their associates up to date on their sustainability-related trainings? And then how much paper are they using in their store on a monthly basis?

Each store is also supposed to hold a Sustainability Committee meeting, so that the management team meets and discusses their metrics, discusses successes and goals and objectives going forward. Any sort of lessons learned that they could share with other stores and then send those notes to me. 

These are things that, in the grand scheme of things, in terms of emissions, probably don’t have the largest impact, but they’re ways to engage associates in these topics and educate associates around sustainability issues that are impacting stores. 

What would you say are some of Harmons greatest sustainability achievements so far? What were some of its biggest challenges to overcome?

I feel like we’ve been doing a great job on waste. I think we’ve seen a steady increase in our diversion rate over the last three years and we’re nearing that 60% mark of waste by weight diverted from the landfill, which I’m really proud of our stores for all of the effort that they’ve invested in that number.

We’ve made a lot of progress when it comes to lighting. We’re almost done with lighting in terms of converting all of our stores to LED lighting. We’re pushing towards putting doors on our refrigerated cases, which reduces energy use by about 60%. And then in terms of refrigeration gases and shifting over those lower GWP (global warming potential) gases is also something I’m proud of.

In terms of going forward, packaging is something we’re just starting. We’ve got some great more sustainable options, but I’d really like to make sure that everything that’s going out of our stores and that we’re packaging ourselves in-stores is more sustainable.

Renewable energy is another area. Over time, I’d like to shift this over to renewable energy at all of our stores. We’re expanding our electric vehicle charges. At this point, I think we have four locations that have EV chargers, but eventually, I’d like to have chargers at every station. There are a number of different initiatives I’d like to expand.  

As sharing metrics and providing transparency play an increasingly important role in grocers’ Environmental, Social and Governance (ESG) efforts, a report from Ratio Institute found food retailers still have work to do when publicly communicating their progress and goals. 

Released in October 2023, the report analyzed 82 North American food retailers’ reporting — not performance — on ESG to give an updated overview of how the grocery industry is doing with its ESG reporting.  

Ratio Institute used 124 criteria adapted from its own ESG reporting standard to understand the depth and breadth of what the companies shared and then rank them. While ESG reporting varies widely in scope, depth, breadth, format, length and structure, there are some patterns in areas where grocers are doing well with their reporting and where they need to improve, Ratio Institute found. 

Here are the highlights of areas grocers lack in their ESG reporting and suggestions for improvement from the firm’s findings. 

Consistency, consistency, consistency

Grocers’ reporting on categories fluctuated in 2023 when compared to Ratio Institute’s 2022 analysis, the report found. 

While industry-wide average scores for “Food Safety Governance” — Ratio’s classification for reporting that covers food safety violations, recalls, training and toxic-usage disclosures — are nearly the same in 2022 and 2023, 39 companies reported on the category in 2023 compared to 24 in 2022.

More reporting doesn’t mean better information. For example, 10 more companies reported on “Health and Wellness” in 2023 compared to 2022. But that category saw the biggest change among categories, with a 19 percentage point decline in the depth and breadth of reporting compared to Ratio Institute’s analysis in 2022 — a drop the firm said is likely due, in part, to declining concerns about the pandemic. 

Companies can boost reporting in health and wellness by “describing employee well-being initiatives or nutrition guidance for customers, referring to a company policy on banned ingredients or chemicals of concern, and by tying these initiatives into a larger vision, such as a company goal or relevant U.N. Sustainable Development Goals,” per the report. 

Grocers also need to be consistent with restating commitments each year — or note when they are complete, no longer material or infeasible for a specific reason — and include data on progress against those commitments, the report found. 

While “Source Reduction,” for example, was one of the most in-depth reporting categories, the report noted that grocers analyzed in 2023 made roughly 40% fewer source reduction commitments compared to Ratio Institute’s analysis in 2022. 

“Many companies are reporting on their progress on source reduction but not comparing that progress against an overarching commitment or goal. This makes it difficult for a food retailer’s stakeholders to assess the significance of the progress,” the report noted. 

On an individual level, companies’ ESG reporting was often inconsistent and lacked details about goals, commitments and progress, the report found. 

“Consistency is essential to effective reporting,” Ratio Institute said.

Improving reporting hygiene

Consistency alone won’t solve grocers’ ESG reporting woes. They also need to provide adequate data to back up their claims, Ratio Institute noted.

Grocers that tend to have more in-depth, transparent reporting on supply chain-related criteria, for example, also use science-based targets for greenhouse gas goals, report to a global climate and sustainability framework or reference U.N. Sustainable Development Goals, the report noted. 

For a “basic level of reporting,” Ratio Institute recommends that grocers:

• Clearly state the current status for a given ESG topic
• State company goals — and related achievement timelines — for that topic
• Describe progress toward goals across multiple reporting periods.

Then, they can add details about methods and processes used to work toward the goals as well as explain the value brought to stakeholders.

For companies just starting to measure greenhouse gas emissions, Ratio Institute recommends they look at Scope 1 first. 

“When a company measures its baseline metrics in various ESG areas, sets clear goals, and consistently tracks and reports on progress toward those goals, it is well-positioned to make the operational changes necessary to improve performance and profits,” the report noted.

While it might seem obvious, Ratio Institute noted that grocers should, when possible, provide a single, comprehensive publicly available report as well as put links in reports to regularly updated ESG datasets. 

Food retailers with the highest scores tended to have reports that are longer or link to documents or webpages, Ratio Institute said. 

“Companies that do not have the resources to publish costly formal reports still have an opportunity for high-quality reporting in less resource-intensive formats, such as web pages,” the report said. 

However, grocers should avoid having multiple documents or webpages dedicated to different ESG areas, the report said. Since the reports are public, the firm reminded grocers to use consumer-friendly language to make their reporting accessible.

Shifting narratives

Grocers are pivoting their ESG reporting focus from talking about COVID-driven operational changes to climate change, Ratio Institute found.

“This trend mirrors a recent shift in media attention from pandemic-related news about company workforce management to climate change,” the report noted.

All of the publicly traded companies analyzed have said in public filings that climate-related events such as fires, floods and extreme temperatures pose major risks to their business operations, Ratio Institute said. However, only 14 companies — 12 public and two private — of the 82 evaluated have made commitments to limit global warming to 1.5° C, the report noted — indicating there’s more work ahead for food retailers in this area. 

Setting science-based targets signals to the public that a company is pledging to make operational changes to limit emissions on a global scale, the report said, adding that retailers can consider greenhouse gas emissions reduction targets aligned with the Paris Agreement goal to limit warming to 1.5°C. 

At the start of 2024, Kroger set a new supplier goal that requires all of its fresh produce suppliers to use integrated pest management practices for all products supplied to the grocery company by 2028 or 2030, based on the grower's size.

The grocer expects medium- to large-sized growers to meet the goal by the end of 2028 and gives small-sized ones until 2030. Kroger said that the change will protect more pollinators and help create a more sustainable produce supply chain.

The new target builds on Kroger’s work to find opportunities to advance sustainable agriculture practices in its supply chain.

Kroger is now requiring suppliers to comply by achieving one certification out of a list of more than a dozen options such as Bee Better, Certified Sustainably Grown and Rainforest Alliance.

Integrated pest management is an “environmentally sensitive approach” to pest management that uses information on the life cycles of pests and their interaction with the environment to manage pest damage with the “least possible hazard” to people, property and the environment, according to the Environmental Protection Agency.

"We depend on a healthy and resilient agriculture supply chain to keep bringing fresh, affordable food to more of America," Lisa Zwack, head of sustainability for Kroger, said in a statement. "This new goal reflects Kroger's evolving approach to sustainability and resource conservation, including setting clear expectations with growers to support the transition to more sustainable fresh food production."

Kroger said that the new goal helps to protect biodiversity and adds to the company’s existing work to conserve natural resources in its supply chain, such as through seafood sustainability and no-deforestation commitments.

Kroger said it worked with the Sustainable Food Group, which is a branch of IPM Institute of North America, to develop the goal and create a compliance roadmap. The retailer also surveyed suppliers “to ensure the goal was both impactful and achievable.”

Having fresh produce suppliers adopt integrated pest management and other sustainable agriculture practices will support pollinators and the broader agroecosystem, Ariel Larson, senior project manager at Sustainable Food Group, said in the announcement. 

“Many of our suppliers are adopting a variety of integrated pest management (IPM) practices, supporting biodiversity by maintaining pollinator habitats and adopting water conservation measures,” Kroger said in its 2023 ESG report. 

Kroger said it will keep working on its sustainable agriculture, biodiversity and conservation efforts. The grocery company said it plans to do a supply chain biodiversity risk assessment, pilot biodiversity metrics with row crop and specialty crop suppliers, and conduct targeted climate risk assessments within its supply chain.

Other food retailers are also stepping up their efforts to better protect pollinators. In December 2023, Whole Foods Market announced a new pollinator policy for its fresh produce and floral purchasing that includes implementing an Integrated Pest Management system and eliminating the use of certain pesticides and chemicals by 2025. 

Walmart has a similar goal. The retailer unveiled in 2021 a policy for fresh produce suppliers that includes having all of its fresh produce and flowers 100% sourced from suppliers following integrated pest management practices by 2025.

New Seasons Market is reducing excess food, boosting sustainability benefits and saving money through its growing upcycling efforts that repurpose food that would otherwise expire and become waste. 

The Portland, Oregon-area grocery chain is upcycling rotisserie chicken, ground beef and berries, the Center for EcoTechnology, a non-profit that offers wasted food support to businesses and partner of the chain, said in July 2023.

New Seasons diverted 15,000 units of rotisserie chicken — roughly 20,000 pounds of chicken — from waste streams from January 2022 to October 2022, leading to savings of 9.4 million gallons of water and more than 23.4 metric tons of carbon dioxide emissions, according to an emailed press release. That effort resulted in a 25% increase in hot rotisserie chicken sales. 

The 19-store chain is piloting an upcycling program that turns ground beef, which the grocer grinds in-house, into taco meat and berries from the produce section into salad bar additions with the Center for EcoTechnology.

Through these waste reduction strategies, New Seasons projects it will save nearly $1,000 per quarter across all its stores.

Following the financial and sustainability improvements upcycling has brought the grocer thus far, the chain is looking to expand upcycling to new departments, such as turning bread into bread pudding, the announcement noted.

“The strategies employed by New Seasons Market have the potential to dramatically change the retail food sector not only by saving money and reducing food waste but by generating new income streams,” Center for EcoTechnology Chief Growth Officer Lorenzo Macaluso said in the announcement. 

New Seasons started implementing wasted food tracking and diversion strategies in 2021, expanding its efforts from just tracking food waste to adding new ways to reduce waste, including the repurposing program. 

When New Seasons signed onto the Pacific Coast Food Waste Commitment, the grocer started tracking the quantity and contents of its wasted food items and found that its prepared foods department had the largest amount of waste. The grocer initially started its efforts there, using Standardized Universal Product Codes to scan all wasted items to designated waste codes and give new codes to previously untracked items, per the email.

New Seasons has been able to develop customized weekly summary reports on waste at each of its stores and also invested in a tool that estimates inventory and waste in four-hour intervals, improving ordering accuracy and giving a better understanding of surplus food patterns. With this data-driven approach, New Seasons found upcycling to be a solution that helps address food waste. 

New Seasons has been able to upcycle the rotisserie chickens in part because of work done with its packaging suppliers to get containers that keep the chickens at a consistent and safe temperature for hours at a time. The grocery can now upcycle chickens after they have been on display for up to three hours.

New Seasons has been working with the Center for EcoTechnology on upcycling surplus berries and ground beef, which has included identifying new value propositions to customers while minimizing additional labor. 

“[T]aco meat upcycled from ground beef offers a high potential for sales and waste reduction, and upcycled ground beef allows staff flexibility as it can be added to the prepared foods department’s hot bar or individually packaged for the grab-and-go section,” the nonprofit said in the announcement, noting that beef production is a large contributor to greenhouse gas emissions. 

The upcycling efforts build on New Seasons’ sustainability initiatives, which have included adopting a more environmentally friendly packaging solution for its private label line of fresh pasta in spring 2022 and stopping the sale of single-use water bottles in 2021. The grocery chain, which is owned by Good Food Holdings, has previously stated a commitment to cut its food waste by 50% through 2030 and achieve a 60% landfill diversion rate.

Upcycling has been gaining traction among grocers. In April 2023, Kroger announced the addition of two new upcycled-ingredient breads to its Simple Truth private label brand in an effort to offer more sustainable items. Whole Foods Market included upcycled foods among its 10 trends forecast for 2021.

While hydrofluorocarbons (HFCs) are widely used in commercial refrigerants and air conditioning systems, the federal government and states have enacted laws to curb their use. And experts say those measures will impact grocers sooner than they may realize.

At the end of 2020, Congress passed legislation directing the Environmental Protection Agency (EPA) to phase down the production and importation of HFCs by 85% by 2036. The EPA now sets HFC allowances around production, importation and consumption for specific time periods. 

In addition to the federal law, several states, including California, Vermont, Washington and New York, have passed legislation or pledged to enact regulations limiting HFC usage.

Grocers need to start working on reducing their HFC usage now — if they haven’t already — to avoid skyrocketing refrigerant costs and potential liability issues, industry experts said. 

These phase downs are already on large grocers’ radar, said Aaron Daly, vice president of strategic development at Ecology Action and former energy management director at Whole Foods Market. 

“I think if you’re a large company, you’ve absolutely got to focus in California right now,” Daly said, referring to the state’s HFC prohibitions, which require the state to reduce HFC emissions 40% below 2013 levels by 2030. “You’ve got to deal with those stores first. You also should have the view that any new store that you build or any major overhaul that you’re already planning that you incorporate retrofitting refrigerants into that model.” 

In its Supermarket Scorecard 2022, the Environmental Investigation Agency, an international NGO, found the largest U.S. supermarket chains continue to “inexcusably lag behind European counterparts” in their adoption of HFC-free technology. 

Kroger noted in its 2022 Environmental, Social and Governance (ESG) report that it plans to steadily replace refrigerant infrastructure in its stores to reach required HFC levels and is developing a strategy to align its refrigerant emissions goals with the federal requirements. Starting in California, Kroger is aiming to achieve a roughly 15% reduction in baseline companywide refrigerant emissions by 2030.

“We continue to transition to lower-GWP [global warming potential] refrigerants as they become commercially available and economically viable, to meet our GHG-reduction target and to meet forthcoming state and federal requirements,” Kroger said in the report. 

Meanwhile, smaller grocers aren’t doing much at the moment to address HFCs, Daly said, given the myriad of ongoing industry challenges they face. 

While large retailers have the resources and access to information to help make the transition process smoother, Daly said independent grocers lack many of these advantages. There are more than 21,500 stores across the U.S. run by independent grocers, per the National Grocers Association. 

“I think that the refrigerant phase-down regulations are going to be very difficult for them,” Daly said.

Daly predicts that market volatility will result from the reduction in HFC refrigerant supply as the phase-down progresses, likely leading to price hikes. Back in 2021, the Department of Energy noted that EPA regulations would likely cause the cost of certain HFCs to rise and for their availability to drop.

“We already have a shortage in the supply of technicians and companies. There’s also a huge backlog and getting access to new equipment,” Daly said. “So all that is to say, if a company decides to wait until everyone else is retrofitting [stores] to do it, it’s going to cost them a lot of money.”

FMI - The Food Industry Association (FMI) has echoed that point, noting in a blog post in 2022 that the price per pound of refrigerants will increase and the expense of maintaining existing systems will also increase as HFCs are phased out. 

Switching to an HFC-free cooling system can cost retailers more than $1 million per store, Carol Abel, the trade group’s vice president of education program development, said in the post. 

“Transitioning to new refrigeration technology is a significant and expensive undertaking for retailers,” Abel said. 

Abel said that grocers should consider making a store-by-store schedule for implementing a new refrigeration architecture and for installing new equipment. Along with that, they should stay up-to-date on state and federal regulations, monitor current equipment and repair leaks, and look into other refrigerant architecture options as well what services current vendor partners can offer.

Quickly creating a refrigerants phase-out plan, which doesn’t cost a lot, can help grocers avoid cost increases and implementation delays, Daly said. 

“It’s much easier for people to plan on refrigerant upgrades and retrofits if they do it in combination with their energy planning and programming,” Daly said, noting that investing in energy and refrigerant efficiency measures at the same time can be cost-effective.

Grocers, especially independents, need to watch out for liability risks that could arise from not raising enough capital to make the refrigerant changes in time, Daly said. 

“For any company, really taking action sooner rather than later will be helpful if they can do it in a cost-effective manner,” Daly said. 

Switching to more environmentally friendly refrigerants

Typically, the older a store is, the higher the GWP of its refrigerants are, Daly said. 

The good news for grocers is that new technologies and systems with little to no GWP are available, FMI noted. 

“Natural refrigerants such as CO2, ammonia, hydrocarbons, and propane are climate-friendly alternatives to HFCs,” Abel said. “Up to this point, retailers have been reluctant to transition to HFC alternatives due to upfront costs and concerns about service readiness and technology availability.”

Modular propane equipment, for example, is very energy efficient, cheap to buy and not difficult to retrofit, Daly said. CO2 condensing units are another option that grocers can consider switching to, Daly said. 

Kroger said that it plans to build seven new retail stores using carbon dioxide refrigerant technology between 2022 and 2024. 

“Transitioning to this ultra–low GWP refrigerant has the potential to reduce per-store emissions by more than 200 tons of carbon dioxide equivalent (CO2e) annually,” Kroger said in its ESG report. 

Grocers can also reduce the amount of refrigeration they need by taking energy-efficiency steps like putting doors on open display cold cases, Daly said. 

Utility rebates can help incentivize smaller grocers to fund an energy efficiency project that helps them move away HFCs, Daly said. 

Laws and regulations aside, Daly had previously told Grocery Dive that refrigerants should be the first of their sustainability areas that grocers address because of the potential cost savings and environmental benefits. 

“You can reduce your refrigerant burden and you can save money on energy from doing retrofits and I think if I was operating a large company, I would be doing it now myself,” Daly said. 

At a time when the grocery industry is pressed to tackle its food waste problems, the Cingari Family Markets under the ShopRite banner in Connecticut has turned to an innovative solution through local partnerships.

The 12-store chain, which is part of the Wakefern Cooperative, is composting about 100 tons of organic material per month — roughly the weight of a 767 Jumbo Jet, Dominick Cingari, the grocer’s sustainability expert and fourth-generation member of the grocery company, said in an interview. That material is then converted into energy that powers homes and businesses across Connecticut. 

Its compost-to-energy efforts, which have accelerated over the past few years, have played a key role alongside inventory management processes and contributed to the grocer cutting waste by over 60% while also opening three stores during the last 11 years, Cingari said. 

Food waste hierarchy

The first priority for the Cingari ShopRite is to reduce the amount of food waste created. 

“The best way to deal with food waste is to not have to waste in the first place,” Cingari said. 

To that end, the grocer places a heavy emphasis on its inventory management, which relies on computer-generated ordering as well as manual input to “make sure we have the right items, the right quantity of items on the shelves at the right times,” Cingari said. 

Even with that, food waste is a reality of the business, so the grocer has a hierarchical plan for how it handles items that are going bad. 

First, the grocer provides edible food to local food banks and charities, Cingari said, noting that the business is looking to partner with a food rescue nonprofit that distributes food to homeless shelters. Tapping into its community roots, the grocer has been donating food for more than 50 years, Cingari said. 

If the item is non-edible and biodegradable, then it gets composted.

“We want to donate everything we can to the food banks and charities,” Cingari. “Why is it composted in the first place if it can be donated to somebody?”

Cingari Shoprite has been composting in all of its stores since 2012 when the grocer started using a traditional composting method where the waste was hauled to a compost facility.

From food waste to compost and energy

A few years ago, prior to COVID, the president of the Connecticut Food Association called Cingari to suggest a tour of Quantum Biopower, Connecticut’s first anaerobic digester. 

“I was so impressed, because with the traditional composting method, as those biodegradable materials break down it releases methane gas naturally into the atmosphere,” Cingari said. “And we know methane gas is not good for the environment — it’s a greenhouse gas.”

Instead, Quantum speeds up the process of breaking down the organic material through a digester and then captures the methane gas that’s released to power homes and businesses, Cingari said. 

When the process is finished, there’s a resulting nutrient-rich soil from the composted material. The grocer is planning to soon start selling that soil in 5-pound bags at its stores, Cingari said.

“It kind of completes the whole cycle from growing [the food] in the ground to going back into the ground,” Cingari said. “I mean, that’s amazing.”

The composting initiative was more expensive in the beginning, Cingari said, due to upfront work like planning, researching, training associates and signage, but the grocer has become more efficient. 

“But we’ve always worked to make the processes more efficient,” Cingari said. “It’s always evolving. What could we do better?”

Now, the composting is part of the normal workflow, Cingari said. The switch from traditional composting to Quantum allowed for the inclusion of some packaged material, like salad bags, which would normally have to get unpacked, providing cost savings. 

“Is it a profit center for the company? No, it’s not. But we do it because it’s we want to do the right thing,” Cingari said. 

In the future, Cingari said having more locations that handle compost-to-energy would not only lower transportation costs but also lower vehicle emissions related to the transportation: “If there were more Quantums available in different regions of the country or different counties, then you would have less transportation costs.”

Supporting local businesses

While Cingari “fell in love with Quantum,” there was one main issue: the grocer didn’t have a way to get its biodegradable material transported to Quantum.

Through the Connecticut Food Association, Cingari got introduced to Blue Earth, which handles that transportation for a fee. 

Because Blue Earth was a startup, Cingari offered one store to test the partnership at the beginning of the pandemic with the idea that more stores would get added on as Blue Earth grew its operating market. 

“I didn't want to put pressure on Blue Earth as a small startup and say, ‘Hey, you need to take all of my stores or I won’t do business.’ I said to them the opposite,” Cingari said.

“They're a small, local business. At one point we were a small local business. We're a family-run company, so we always try to help entrepreneurs and small businesses,” he said. 

That arrangement helped Blue Earth figure out where to expand its operations to. Now, all 12 of the Cingari ShopRite stores are partnered up with Blue Earth. 

Proudly sharing progress

ShopRite has found that its waste-to-energy work helps it connect with its shoppers and also help boost employee morale: “I think people feel better about themselves for doing something positive for the environment,” Cingari said. 

ShopRite has signs in its stores telling customers that food waste equaling the weight of a 767 Jumbo Jet is not going into a landfill. The grocer’s dietitians also help spread the word about the compost-to-energy initiative, Cingari said. 

Every month, Cingari tracks each store’s amount of composted material, uses a formula to calculate how many pounds of CO2 were diverted from landfills and posts that number in the break rooms and at the time clock, Cingari said. 

“When you get your associates to buy into the program, they become invested in it and it becomes a little exciting and they know what's going on,” Cingari said. “I’ve had contests with store against store [with a] pizza party as a prize. When you do those types of things and you make it fun, I think we all benefit.”

“We’re very proud of what we compost,” Cingari said.