Restaurants and Institutions

Chris Muller

Green is the New Black (As in Ink)
November 6, 2007

• Is green putting a label on menu items that are vegetarian friendly, or is it lowering natural gas consumption by 10%?
• Is green finding a source for locally produced raw materials or is it installing a Micro-CHP system for independent energy co-generation?
• Is green setting up recycling bins for plastic water bottles or is it demanding building design and construction changes for long-term operating efficiencies?

In today’s reality, green is all of the above. The difficult part is finding a way to signal to the customer that your restaurant company is “green.” (For more on the greening of foodservice, visit: Getting “Green”--What Consumers Want; How Operators are Responding to view an exclusive R&I Webcast.)

After adding menu icons that point out healthful items and a description of the farm that raised the free-range pigs for the barbecue, there is not much a restaurant can say about being on the cutting edge of “green.” Any competitive advantages gained by making such consumer-directed moves will quickly disappear.

In fact, a strong case can be made that the “green revolution” is a consumer movement where consumers will not be the primary beneficiaries. It will result in changes that consumers may never see or may not care about.

The real opportunity for turning “green into black” will come from an investment in green technology. If you were to go back and look at the National Restaurant Association’s 2003 Restaurant Industry Operations Report, you would find that median “utilities” costs for all types of restaurants ranged from 2% to 4% of sales. In 1973, it was just 1% to 2%.

What are your projected total utilities costs for 2007? Would it surprise you if your actual expense went above 10% of sales this year?

It’s not coincidental that the price of cheese is at record levels as oil prices top $90 a barrel and fields of corn are being sent to ethanol plants instead of to feed lots. Is the price rise for a pound of cheese an increase in food cost or in energy costs?

Since you can’t control commodity prices, finding a 5% savings in your operations from becoming greener should be very attractive. If you consider your total utilities cost to include everything from water and sewage to the added expenses of air-conditioning your open kitchen because the oak logs burning at 700F are just a few feet from your dining room, the hidden costs of energy consumption are everywhere.

We all know the telltale smell that warns us of a deadly gas leak. Ignoring the true cost of not going green also is a silent killer, but without the warning signs.

Posted by Chris Muller on November 6, 2007 | Comments (0)