Convenience-store retailers continuously look for new ways to reduce expenses, and one of the quickest, most effective ways to save is by cutting utility costs.

The typical convenience store is brimming with power-consuming equipment, ranging from refrigerated cases and lighted gas pump canopies to POS technology and coffee pots. That’s why c-stores consume an average of 51.5 kilowatt-hours per square foot per year, and energy is their second largest expense after labor. In 2018, utility costs averaged 3.6% of gross profit dollars, according to the NACS State of the Industry Report of 2018 Data.

“Energy management is an often-missed opportunity for convenience stores,” said Al Subbloie, CEO of Budderfly, an energy management outsourcing company based in Connecticut. “There are dozens of steps a retailer can take to cut a store’s energy consumption, and today, powerful new analytics are available to help monitor, control and record power usage and many aspects of a chain’s operations.”

Monitors create a network that uses artificial intelligence to oversee the entire system, generate real-time data and notify management in case of irregularities.

Hot Lights and Cold Cases

One of the first places to see immediate results is to replace fluorescent bulbs with high quality LED lighting and fixtures. LED lighting can cut energy consumption up to 75%, plus LED lights last three times longer than fluorescents and have a high-color rendering index that enhances the look of the entire store interior or forecourt. The lighting “color” can even be customized for front of the house versus back of the house or for time of day for additional operational flexibility.

“One of the best things about LEDs is that they emit very little heat,” said Subbloie. “By comparison, incandescent bulbs release about 90% of their energy as heat, and compact fluorescent lamps release slightly less. Lighting retrofits can lower a store’s demand for cooling by 10% to 20%. LED costs have come down a lot in recent years.”

Stores can capture additional savings by installing timers, occupancy sensors in certain locations or daylight-detecting monitors on lights.

Beer caves, freezers and coolers are vital convenience store tools. They keep some of the store’s most in-demand products cold and ready to go. “That’s a big reason why stores should replace traditional lighting in standard refrigerated cases with cooler LED,” Subbloie said. “That change alone can cut significant energy consumption.”

In addition, installing anti-sweat controls on freezer and cooler doors lets retailers monitor the temperature and run the doors’ heaters only when there’s a chance of condensation. “By installing those controls, you can potentially save almost $100 per door each year,” said Subbloie.

Most foodservice operators prefer open refrigerated cases for merchandising cold items, such as salads, sandwiches, wraps and cut fruits and vegetables. The design showcases products and makes them easy for customers to grab. By selecting display cases that have clear doors or sliding lids, retailers will lower refrigeration compressor loads, extending the life of the compressor and cutting energy use as much as 65%.

Air conditioning is any store’s biggest energy expense, Subbloie said. “In fact, HVAC can be about 25% of a retailer’s overall energy bill. Freezers, coolers and cooking equipment generate a lot of heat in a small space, so managing the HVAC is key to controlling costs.”

Upgrading HVAC units helps motors and other components run more efficiently, and variable frequency drives can be utilized on larger HVAC units to optimize the speed of the motor. Smart controls, such as wireless thermostats, help the retailer manage the system remotely and also to record data across multiple locations of larger chains.

Large convenience chains, such as 7-Eleven and Kum & Go, have added LED lighting and other cost-saving improvements to their stores. “Working with Budderfly lets a c-store operator of any size or brand do the same without having to invest their own money or wait on corporate help,” said Subbloie. “This is appealing not only from the perspectives of operations and profitability as everyone seeks the new customers currently choosing a convenient alternative to distant, larger stores, but also for upping the valuation of a group of locations for possible acquirers shopping for well-run groups of stores.”

Making Big Changes

Convenience stores may choose to make energy saving improvements gradually or, like P2 Sandhu of Richmond, Virginia, they can do them all at the same time once they know what actions should be taken. Sandhu is the owner of P2 Restaurants Inc., which franchises several QSRs. When he wanted to reduce his locations’ energy bills, he called Budderfly for help.

“We sent a team to Virginia to conduct an on-site analysis of his KFC locations. We wanted to understand everything about his energy needs and opportunities,” said Subbloie. “After an intensive review, we purchased and installed all the necessary technology for lowering and monitoring the stores’ energy use at no cost to P2.”

The Budderfly team created a model to explain the minute-by-minute impact of everything in each store. Then, they designed interior and exterior LED lighting systems and upgraded the HVAC and cooking ventilation systems for the two QSRs. They integrated energy demand response timing and controls to distribute energy usage across the lowest-cost times of day.

A key to the program’s success is that Budderfly monitors usage at key points of consumption, not just the single meter outside the building that utility companies use. On each piece of equipment, Budderfly installed monitors—some as small as a computer chip—to create a network that uses artificial intelligence to oversee the entire system, generate real-time data and notify management in case of irregularities, such as an unlatched freezer door or a rear exit that stays open too long.

“Our IoT smart meters collect information 24/7/365, creating a really unprecedented density and sophistication of data, which is all processed through an integrated platform of proprietary Budderfly software and hardware,” said Subbloie. “Our AI and sensor-based real-time management can adjust activities to save energy and cost, by shifting usage to lower-rate times of day, by avoiding special capacity charges and by increasing the performance and lifespan of vital equipment in our customers’ stores.”

The electric bills for Sandhu’s two stores were immediately replaced by a monthly statement from Budderfly. A user-friendly dashboard also lets Sandhu review his electrical activity in as great a degree of detail as he likes, or he can choose to leave it to Budderfly to make efficiency and savings decisions effortless.

“And like all our clients, P2 was guaranteed that his monthly electrical usage figure was lower than before,” Subbloie said. “Over a 10-year contract, our program is designed to upgrade equipment and lights for free and also reduce a convenience store’s utility costs by $25,000 or more.”

During the COVID-19 pandemic, foodservice operators and retailers are facing many challenges, “but one thing they can control is energy consumption,” Subbloie said. “Depending on the age of a business’ equipment and other factors, Budderfly can help a retailer cut energy consumption and costs up to 30%, which pays for the customer’s savings, the equipment we install, our services and more. And while Mother Earth won’t share in those monetary savings, these actions will reduce a business’ carbon footprint.”

Energy-Saving Advocates

Cost cutting is the most common reason for businesses to reduce their energy use, but the desire to protect the environment also is a growing concern. Today, many businesses are sharing their energy saving goals with the public. They are serious about their conservation goals and want customers to know that they are investing in sustainability efforts.

A recent Deloitte report on energy management noted that nearly six in 10 businesses surveyed feel increased pressure from stakeholders to disclose and address climate risk, and of those, nearly nine in 10 have reviewed or changed their disclosure procedures and developed plans to tackle climate-related risks.

According to the NACS Sustainability Playbook, research conducted by one convenience operator found that 68% of regional customers said they would visit the stores more frequently if they marketed themselves as a sustainable company.

Budderfly provides customers with window and cooler clings featuring the green Budderfly Effect logo seal, which designates stores as an energy-efficient facility.

“We’re currently planning to showcase our customer success stories,” said Al Subbloie, CEO of Budderfly, “which gives the customers and their upgraded stores potential social and search exposure on the energy efficiency/green makeover topic. We encourage customers to share this news in their social feeds and use it in their advertising.”

Last year, CGS, a global provider of business applications, conducted a consumer survey on retailing and sustainability. More than two-thirds of the respondents said they consider sustainability when shopping. Despite price still being a big factor in every purchasing decision, consumers emphasize sustainability and are increasingly focused on supporting brands whose missions they care about.