SCOTTSDALE, Ariz. -- Retailers and wholesalers are braving the heat here this week to learn how to prevent a number of energy-related issues from boiling over.
Supermarket engineering and technical executives are ready to confront key issues on a number of industry fronts, including the phaseout of chlorofluorocarbon production by the end of the year, the need to comply with a growing number of federal safety and environmental regulations and the increased pressure to ensure that store designs and fixtures help in driving product sales.
More than 230 attendees are expected to attend this year's Food Marketing Institute Energy and Technical Services Conference. The three-day event is designed to allow engineers from across the industry to discuss strategies and compare notes in a highly specialized forum.
"Speakers aren't addressing an audience that needs to come up the learning curve," as is often the case in general industry conferences, said William Chard, director of engineering at Nash Finch Co., Minneapolis.
One area where supermarket engineers and technical staff are facing increasing pressure is stepped-up enforcement of a number of federal regulations, ranging from Food and Drug Administration safety standards to waste disposal regulations.
"Compliance issues are exploding around us," Chard said. "It's not only [federal agencies], it's insurance companies and environmental issues."
The conference will tackle the intricacies and implications of a number of government regulations, including the Department of Energy Policy Act and the FDA Food Code, in a session titled "Impact of New Codes."
"In the Baltimore-Washington area we see that local governments are doing inspections and taking [refrigerated] product temperatures," said Robert Bittner, director of engineering at Giant Food, Landover, Md. "I consider that to be something very important in the future."
Inspectors are "really looking for product temperatures. A case fixture at temperature may not guarantee a product is at temperature," he added. "They actually stab the product with a thermometer to make sure it's at temperature. It's a whole new game" for retailers.
Giant Food has begun a special maintenance program to ensure that key areas like salad bars are complying within federal regulations. "Many salad bar fixtures really don't get good temperatures," Bittner said. "It's an area that's very suspect for health officials and an easy one to go after."
"Code compliance certainly has an impact on our new equipment purchases," added Rick Hankins, supervisor of refrigeration and construction at Abco Foods, Phoenix. "When we go back in and remodel stores, there's certainly a lot of things we have to take into consideration that we didn't have to consider before."
While regulations of temperature and waste disposal are being stepped up, one bright light on the horizon for retailers is the prospect of increased deregulation of utilities.
In a seminar titled "Utility Deregulation: Impact on Supermarket Energy Costs," speakers will explore how deregulation can give retailers more freedom in choosing energy suppliers and price rates.
"Utilities are such a high part of our cost as far as the percentage per sales," said Duane Chambers, maintenance and equipment manager at Eagle Food Centers, Milan, Ill. He added that deregulation of utilities should yield the retailer savings while improving the quality of their service.
"Right now we're stuck with the local [utility] suppliers, and some of them aren't keeping up-to-date," he added. "As construction grows around our stores, we're starting to have more brownouts in the summertime.
"If we can put a little heat on them by the threat of us going to a different utility, it's going to give us more bargaining power," Chambers said.
An issue that dominated conferences of previous years -- the mandated cessation of CFC production on Jan. 1, 1996 -- is on the agenda, though attendees are divided on how crucial it remains.
"This is this industry's last opportunity," said Giant Food's Bittner. "This is the last conference before CFC production ceases. Prior conferences have had a heavy focus on refrigerant alternatives, but I think this conference will be more so than ever before.
"I think while many retailers are aware of the situation, as many [have] a lot of misconceptions of what's happening," he added. "I've heard people say they think you can no longer use CFCs after Jan. 1, and certainly that's not true."
Several retailers agreed, however, that the deadline may not have a serious initial impact on the supermarket industry.
"It's not going to be a shock: companies are not going to be shutting down because they can't operate their systems," said Leonard Micek, manager of engineering at King Soopers, Denver. "But it is going to mean a definite change in the way people have been operating."
"I see a shift away from CFC issues [at the conference] because the solutions have crystallized," added Nash Finch's Chard. "The producers of refrigerants are not aggressively developing new refrigerants anymore; they're primarily selling the ones they've developed."
Retailers with the most crucial need for objective information on the phaseout are smaller independents who lack the technical staffs of larger retailers, Bittner said.
"Some independents are relying on their contractors and trusting their contractors to advise them," he said, adding some contractors could exploit the situation by recommending an expensive conversion process.
It is also difficult for retailers of any size to get the capital needed for a thorough refrigerant conversion, Bittner said.
"You're competing for the capital in our business. If you can spend money to increase sales volume, that probably will take precedence over reducing expenses," he said. "Anything you do in the way of refrigerant conversions in no way, shape or form increases sales."
Finding a balance between sales and energy efficiency initiatives is the focus of a session at this year's conference titled "Financial Justification: Building a Relationship Between Merchandising and Engineering."
"Payback on engineering concerns is not as readily realized as maybe the return on investment you'd see through sales," said King Soopers' Micek, who serves as chairman of the Energy and Technical Services Committee.
The input of merchandisers must not be discounted, Bittner said. If engineers solely design display cases, a retailer could be at a competitive disadvantage.
"Our business is to sell," he said. "You want to sell as efficiently as possible, but if it came down to an engineer vs. a merchandiser, the merchandiser should win."
"For us, merchandising wins every time -- 10 out of 10," said Abco's Hankins.
"If [merchandisers] are willing to live with the energy inefficiencies of a [refrigerated] case or design concept, and they can make up for it in sales, case closed," he added. "If they can't pay for energy inefficiencies through sales, I'll win. But their track record is good."
One resolution to the conflict would require engineers to think more like merchandisers when making technical decisions, Chard said. "I think everyone in our engineering department is thinking more about how the merchandise is presented rather than just buying a fixture that looks good," he said.
In the area of store lighting, for example, technology has improved so that an energy-saving lighting system that creates good product presentation is no longer an oxymoron, Chard added.
