Powering Down Energy Use
Au Bon Pain's energy-purchasing tactics include negotiating price, auditing past utility bills and sharing consumption best practices.
By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 6/1/2008
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Au Bon Pain worked with an energy procurement consultant to find the best utility prices and ways to reduce energy consumption in the stores. |
Wade Winters, vice president of purchasing for Boston-based Au Bon Pain, wonders why a focus on utility costs isn't more prevalent. “We should have been pursuing it years and years ago. Why does it take the worst of times to understand that this is an opportunity?” he asks.
Opportunity it is, if the bakery-cafe's experience is any indication.
Working the InsideWinters hired Gary Markowitz of Lexington, Mass.-based Kilojolts to identify energy-saving opportunities for Au Bon Pain's 122 domestic company-owned restaurants. The energy-procurement consultant works with utility brokers to get the best prices on electricity and gas. “Because we don't purchase energy, it's kind of a new concept,” Winters explains. “We don't necessarily have the insight or expertise to know the ins and outs of that particular category.”
“This is a well-spent consulting fee,” Winters says without specifics, adding that over the past 12 months, the savings has been worth it. Though he's been warned that not even brokers will be able to help reduce costs for the next six to 12 months.
Fortunately for Au Bon Pain, the consulting goes beyond finding the best prices. Kilojolts is also auditing past utility use. Winters explains that usually bills come in from the utility companies, and the company simply pays them. The audit will examine previous invoices to check for mistakes. “They know what to look for,” he says of the consulting firm.
In cases where utilities are billed through the landlord, the consultant will research comparable rates in the market to determine if the fees are fair. If something seems off, Au Bon Pain will ask for documentation from the landlord.
“We're confident that landlords will cooperate,” Winters says. “If it's a mistake, I can't see why they wouldn't make good on it.” He points out that the landlords themselves may have been overcharged, and “maybe we're doing them a favor by recognizing it.”
Still, the company is examining lease terms going forward to ensure the company is able to audit utility costs.
Lowering DemandAu Bon Pain is also working to lower its energy costs by reducing its consumption. Kilojolts is helping identify best practices in not only the restaurants but the support center and manufacturing facility as well.
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Concept Au Bon Pain Headquarters Boston Units 122 company, 60 franchise in U.S. 2007 Systemwide Sales $300 million Average Check $4.71 Expansion Plans 12 to 15 in 2008, including 6 in Dubai and Kuwait |
While the consultant will help point out such areas, Au Bon Pain will follow up and roll out new operating procedures or training. Winters would like to see reduced energy costs tied to manager bonuses. “Reward drives compliance,” he says.
Au Bon Pain also shares best practices with its franchisees, which operate 60 units, and will incorporate them into new restaurants.
“The way market conditions are, with commodity costs, there are very little directions to turn to become more efficient and create cost savings,” Winters says, adding that he would rather save a few cents by using less energy than by using lower-quality ingredients.
“There's something to be said for when times are tough,” he says. “It makes you more efficient than you ever would be.”
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