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Albertson's Stocks Up on Waste-Reducing Strategies

For Albertson’s, Inc., one of the largest retail food and drug chains in the U.S., “waste is anything that is not an asset and nothing but lack of imagination.” Over the past few years the multibillion-dollar company has made it a priority to reduce waste and maximize resources, implementing energy-saving policies like dimming the lights in its stores and helping develop a 100% recyclable container for shipping produce. By Emily Rabin Read More

(Updated on July 23, 2024)

Nationwide retailers face environmental challenges large and small, from reducing shipping materials to convincing store clerks across the country to turn off the lights in their stock rooms. The bigger the operation, the more opportunities there are to cut operating costs. Increasingly, managers are realizing that cost-cutting initiatives that boost the bottom line often benefit the environment as well.

For Albertson’s, Inc., one of the largest retail food and drug chains in the U.S., “waste is anything that is not an asset and nothing but lack of imagination.” Over the past few years the multibillion-dollar company has made it a priority to reduce waste and maximize resources, implementing energy-saving policies like dimming the lights in its stores and helping to develop a 100% recyclable container for shipping produce. Greenbiz.com’s Emily Rabin asked John Bernardo, Albertson’s resource conservation manager, about waste reduction, recycling, and how using natural resources wisely makes good business sense.


Emily Rabin: How and when did Albertson’s first become interested in green business practices?

John Bernardo: The typical grocery store has a profit margin of less than 5%. To increase revenues, we have two choices: increase food sales or reduce operating costs. It’s that simple.

We’d been recycling cardboard since the 1960s, but the sustainability idea came later. In the 1990s, we began looking at waste reduction: What can we recycle? That led to the next logical question: Why do we have to generate this waste in the first place? And so we branched out into pollution prevention. With more than 2,300 stores, 19 distribution centers, and one of the largest private trucking fleet in the U.S., we have lots of opportunities to maximize resources.

For example, we fry a lot of chicken in our service delis using partially hydrogenated soybean oil. We traditionally pay a renderer to take away the used oil. But we thought, how can we use our imaginations here? Now we’re filtering the breading out of the oil and using it to fuel the hot-water heater in one of our stores in Boise. It’s just a test case, but so far we’ve managed to reduce rendering costs and cut down on gas consumption at that location.

ER: What are some of the energy-saving initiatives Albertson’s has implemented over the past few years?

JB: We’ve done a lot to reduce our energy costs. In 1995, Albertson’s retrofitted 90,000 light fixtures. In 1999, we installed technology that uses less energy to cool dairy cases and reduces condensation.

In 2000, we implemented an energy-curtailment program, dimming in-store lights at all our locations for six to eight hours each night. At the time, there were brownouts in southern California, so we dimmed the lights 24 hours a day in our stores there. We posted signs in the stores explaining the dimming policy to our customers. Well, no one complained. The fact is, if you’re a better neighbor by using fewer resources, customers will look favorably on you. We eventually expanded the 24-hour dimming policy to Albertson’s stores in every state.

ER: Albertson’s also helped to create the recyclable Common Footprint Produce Box. What was your process for developing the container?

JB: We were receiving a lot of our produce in corrugated cardboard boxes coated with paraffin wax. With the wax, we couldn’t recycle them. So we went back up the supply chain to the Fiber Box Association, the trade association for box manufacturers, and said, “we’ll help you to develop a wax-free alternative and test it through our distribution centers.”

To make that kind of statement, we had to fully understand the practical issues of box production: What are the necessary dimensions? How would it be delivered? What about storage? Is it in the company’s best interests to print the its name on the box? We couldn’t suggest a new box without researching the factors involved.

It took a few years to develop, but the Common Footprint Produce Box meets all U.S. and European shipping standards and is 100% recyclable. It also stacks better, reducing the amount of damaged fruits and vegetables arriving at stores. I can think of at least three other major retailers that now use the Common Footprint box.

ER: Efficiently transporting merchandise from place to place is a major concern for any large retailer. Are there any other initiatives you’ve implemented to reduce waste in shipping?

JB: Albertson’s uses returnable plastic totes for shuttling merchandise and recyclables between stores and distribution centers. The main issue with small stores is that they can’t stock entire cases of product. Now if a store says it needs just 12 bottles of shampoo, we pack that shampoo into a plastic tote. Then the store managers can pack the tote with recyclable plastic, or damaged goods, for backhauling to the distribution center.

Albertson's

ER: How do you encourage your employees to do their part?

JB: Associates can make suggestions and if they’re implemented the associate receives an award bonus. Computer-guided training helps keep people informed of policy changes and allows for better communication among stores. Right now we’re developing an instructional video to show associates the proper way to separate recyclables from the stores’ waste streams.

ER: Albertson’s cleaned up the site of an abandoned gas station to locate a new store there. What are some of the benefits and challenges of greening brownfields for reuse?

JB: We don’t target brownfields for store locations, but we don’t take a potential location off the list because it’s a brownfield. Our main concern is whether it’s a location that makes sense from a retail point of view.

That said, brownfield cleanup is a great way to reach out to surrounding communities and enhance the neighborhood. In general, Albertson’s has made it a priority to develop good relationships with the communities it serves. Every time we open or remodel a store, we work with the National Arbor Day Foundation to plant ten trees at neighborhood schools.

ER: What advice do you have for large retailers interested in greening their distribution methods, supply chains, or store operations?

JB: Always be prepared to show the numbers — how a given initiative will improve the bottom line. Sometimes, however, it’s hard to evaluate the benefits of initiatives until they’ve been implemented. For example, to gauge the efficiency of the Common Footprint boxes, we compared the time it took to hand-place produce on display tables versus using the new packaging container.

Also, never take no for an answer. People in all walks of life are resistant to change. So when you consider a new idea, be prepared to try it over and over again, building on small successes until you’ve convinced a critical mass of people that it works.

ER: How do you measure success?

JB: By the bottom line, by how efficient we are at utilizing resources, and certainly by how other people think we’re doing — industry awards, customer comments, and positive feedback from our shareholders.

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