Food Forum: Backup power players

Having backup power during an outage can pay off in the short-term and the long-term. By Amber Hegemann When we talk with grocery retailers about the need for backup power as part of their emergency preparedness and business continuity plans, we always discuss safety of employees and customers and inventory spoilage. Having a backup generator system means lights remain on so that employees and customers can exit the facility safely. It also means you do not to have prioritize which perishable goods will be saved and which will be eliminated. Finally, it eliminates the need to secure refrigerated or frozen transportation and storage from a third party. Another aspect of your business worth protecting—and expanding—is your positive reputation. That means approaching the concept of backup power from the perspective of a customer who might also find him/herself without power at home. Recently, Generac surveyed our home standby generator customers to learn what the economic impact of a power outage was to them (i.e. what caused them to purchase a home standby generator in the first place). We got more than 12,000 responses. They told us that, aside from damage to their homes and property, food spoilage was on average the most costly outcome of a power outage to a consumer—particularly the loss of frozen food at about $200 per outage. Certainly that means grocery retailers can enjoy sales after a power outage from consumers who have not invested in backup power. However, they should also consider the benefits of being able to serve customers during a power outage. According to our data, market penetration of home standby generators is only about 3% of single-family homes valued at $100,000 or more. That leaves a lot of homeowners without power during an outage. Yes, many might have portable generators available to back up essentials—and even back up refrigerators and freezers. But the amount of power a portable generator can deliver is limited compared to a home standby, and only the largest can back up an electric stove. That means that while homeowners might be able to protect their frozen food with a portable generator, they will not likely be able to prepare it easily. Thus, supermarkets and grocery stores that invest in facility-wide backup power might find themselves winning customers they might not have otherwise, and thrilling their existing customers. Our economic impact survey showed that eating out was another expense that impacted homeowners’ pocketbooks during a power outage. Prepared goods can likely compete handily with restaurants in this regard. According to a Technomic survey quoted this year by NACS, 37% of consumers buy prepared ready-to-eat or ready-to-heat foods from retailers at least once a week, compared to 22% just a year ago. Grocery retailers should capitalize upon this trend during a power outage when consumers are that much more likely to want fully prepared meals for their families. Easy-to-prepare foods are also ideal. Deli foods, bakery and microwaveable foods could be staples for consumers during a power outage. While backing up an electric stove might not be possible with a portable generator, powering a microwave is. Even those who invest in home standby generators to back up only essential appliances typically choose to back up their kitchen lights and outlets, as well as can openers and microwave ovens. Speaking of home standby generator owners, although overall market penetration is currently low, those who do invest in home standby power typically do so to ensure that their lives continue uninterrupted. Thus, they will look to be able to shop as they would normally. Not only might they have access to more appliances for preparing food, they could be hosting neighbors or family members who do not have power. That could tax their resources, which they will be expecting their local supermarket or grocery provider to replenish. What does this mean for grocery retailers that invest in backup power? There are definitely opportunities to attract new customers away from competitors who either have to close or provide limited services during a power outage. They also stand to endear themselves to existing customers by demonstrating to them that their patronage was, and continues to be, the smart bet. Amber Hegemann is marketing manager at Generac Power Systems. She can be reached at [email protected].