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A cost-per-meal energy standard for restaurants? The Harmony Group wants to make it happen

Securing buy-in
Burns has been with the Harmony Group for about four years now. The first three were spent as a senior purchaser with Earls, the upscale, Vancouver-based restaurant chain run by Stan Fuller, the eldest of the Fuller brothers, who own and manage the three restaurant concepts, along with Richard Jaffray, co-owner and President of Cactus Club.

“I’m a bit of an energy conservation maniac,” jokes Burns. “When I saw what I thought could amount to real savings in both the front and the back of the house in our restaurants, I sat down with Stan Fuller and basically said, ‘this is crazy, we could be saving so much money.’ So he asked me to put a proposal together, and here I am.”

When Burns took up the challenge of the proposal, she had two particular targets in mind – standard operating procedures (SOPs) for all of the equipment in the back of the restaurant, and lighting out front.

“No other restaurant in North America had the sort of comprehensive program I wanted to put together that not only included energy but also a composting and recycling program in every store,” says Burns.

Stan Fuller hopped on board with Burns’ idea the moment he saw the potential savings and impact the move could have. It was then up to Burns to sell it to the presidents of Joey Restaurants and Cactus Club – brother Jeff Fuller and Richard Jaffray, respectively.

“Without them being on board, it’s very difficult to get buy-in from operations, design or marketing teams among these very competitive restaurant concepts,” notes Burns.

And that’s one of the many interesting elements of Burns’ position – she is working to create bottom-line benefits for a group of restaurants that actually compete with each other fiercely in the western Canadian market. This requires a lot of stick-handling in meetings that involve all the restaurants.

But she did get buy-in from all leadership and went forward with a pilot in a North Vancouver Earls – “a location that I could map very easily,” Burns notes.

Within six months, in that one location, simply by changing the way they manage their processes every day, the company had saved roughly $4,000. “From a controllable cost point of view, that was substantial for a restaurant,” says Burns.

The a-ha moment – walk-through audits
Now that the concept had been proven in one location, Burns put together an energy committee, and she managed this with strategic care.

“I had to figure out the right people from each restaurant concept to have on the committee – people who could make decisions and carry them through into each chain to get the whole process rolling,” she notes. “Within the last year, this has given me the ability to go into all concepts, do energy audits and SOP audits, discuss how each restaurant is currently running, basically teach them about their utilities and how they are managing them.

“These store leaders run restaurants and pay bills, and it’s really quite an eye opener when I sit down and explain to them exactly the cost per gigajoule or cost per kilowatt hour that they are paying in each province, and how a piece of equipment like a deep fryer actually affects them,” Burns continues. “Once they start recognizing those costs, it’s like this huge light bulb goes off. It’s amazing once I pick a couple of pieces of equipment in their restaurant and basically tell them this one burner on this six burner stove running for one hour is going to cost them a particular amount – from there, they start looking at every piece of equipment with that focus, so we’re seeing some really big wins in a lot of the stores just from, for instance, not turning their fryers on so early.”

Burns explains that there is about 20 pieces of equipment running on electrical or natural gas in a kitchen, and it’s not too challenging to find ways to save on those costs if you are looking.

For instance, she points out that a restaurant may turn on a deep fryer at 6:30 when someone comes in but they don’t use it until 11. “That is a huge chunk of change in their pocket,” she stresses. Now, many of the restaurants are working at keeping some fryers off on traditionally slower days, or starting them up later and designing their menus around that. “It’s really amazing when you give these guys a little knowledge, where they take it to the next level. And each restaurant is now developing internal SOPs.”

Of course, just because the managers have caught the bug doesn’t mean that Burns stays hands-off from thereon in. “You have to streamline something like this to the nth degree,” she explains. “When a new piece of equipment comes in, we send a reminder to the team saying it’s a new piece of equipment and it’s more energy efficient, so you have to start your SOP all over again on this one piece of equipment. And the reason behind that is the equipment they are getting rid of is fairly old, so it did take longer, it was more of a drain, so we trying to map all of those anomalies that are happening internally in restaurants.” 

Burns has completed audits of roughly half of the locations in the Harmony Group’s stable of 108 locations, usually spending between 3-3.5 hours in each location doing a walk-through audit of the back of the house and the front.

“I don’t usually say too much to the team before I get there because I do need the managers to have that ‘a-ha’ moment,” says Burns. “But after that, I put presentations together for them to share with staff, as well as videos to start the education process, and then we do monthly reporting for them that charts their success.

“What we’re really trying to do is to take the human variable out of the equation because so much of that affects energy use,” says Burns. “I bet that on average about 25 per cent of energy costs are reduced when we manage that piece of the puzzle. Once you have taken that out, you can see the true cost of running that facility, and you can start doing upgrades and effectively track those upgrades more effectively.”

Cost-per-meal – a new standard?
To complete the package, Burns also had to get the design and marketing teams together to talk through improvements they could make. This was a challenge because, of course, each restaurant chain competes against each other on look as much as anything else.

“When you get a group like design together, you have to leave what kind of chandelier you are going to use out of the conversation – you really have to start talking about the HVAC systems, the mechanicals, the opportunities for doing grant and rebate pilot projects, sharing that kind of information,” Burns explains. “When we finally figured out what we were doing there, it rolled out quite easily because we are not dealing with what makes us individuals within operations.” 

With the marketing department of each chain, Burns had to get them on board with a new set of standards for the restaurants. “We are thinking of trademarking what we’ve put together,” says Burns.

Essentially, what the company is trying to create is a ‘cost-per-meal’ efficiency standard. It’s not an exact science, to be sure – any such standard has to account for location, temperatures, etc. However, Burns sees the company having a standard that would serve for all restaurants in a particular city, for instance.

To get all the numbers right, Burns expects the process take three years — one year to remove the human error element through SOPs, a second year for low-hanging fruit like lighting retrofits, and a third year to address larger cost overhauls, such as overhead vents, variable speed fans and HVAC upgrades.

Then again, with Canada being such a diverse landscape, year three items in some places might provide quick paybacks elsewhere. For instance at Joey Chinook in Calgary, the restaurant switched out its old hood over its cook line and put in a variable speed fan. The location immediately dropped 25 per cent of its electrical bill. “From an Alberta standpoint, that was an amazing coup,” says Burns. “We measure the greenhouse gas emissions from every location as well, and their emissions dropped substantially as well.”

Supply chain engagement
Burns explains that the Harmony Group is slowly reaching out to all of its suppliers with information about its program. The main reason, however, isn’t to blow their own horn, it’s to better calculate the energy use of all the equipment they use.

“We are asking these vendors to submit the specifications of all equipment – coolers, freezers, stereos, TVs, fryers, you name it – and we have created an equipment list with a formula attached that allows us to calculate the cost per day per province or state in which that piece of equipment is running,” Burns explains. “This was another eye opener for the managers. When they actually saw what a patio heater was costing them when no one was sitting out there, it changed their practices.”

And the company is starting to see a large impact. For instance, among the four Earls locations in Manitoba, within three months from their initial audit, they had shed 47 metric tons of greenhouse gas emissions.

The company is also looking to suppliers for more energy-efficient versions of their products – a request that will no doubt have an effect on the supply chain.

Composting for dollars
The next major drive for Burns is to get waste out of landfills. The Harmony Group’s aim is to divert 45 per cent of its waste from landfill and put it towards composting. Currently, the company has about 20 locations on a full-on composting-recycling program. The majority of those are in BC, although the is one test pilot in Manitoba, and four in Alberta. 

This makes sense from a cost point of view, notes Burns. It is cheaper to have compost picked up, and the weight reduction and frequency of garbage pick-up has been impressive.

“On average, we are down from three waste pick-ups of a six-yard bin every week, to one pick-up of a 2-4 yard bin a week,” Burns notes. In addition, at Earls, the restaurant is moving towards more recyclable materials in its takeout packaging.

It’s still early days for Burns on her journey to making the Harmony Group more energy efficient and environmentally sound, but already she has helped to create a new way of viewing restaurants, blazing a unique trail. Watch for future updates on this remarkable success story.