85% of cooking equipment costs is in energy

ISLAMABAD, PAKISTAN:  Pakistani cooks prepare dishes in the kitchen of Cafe Lazeez restaurant, a British curry chain, in Islamabad, 02 March 2005.  Cafe Lazeez owner Zahid Kasim, who launched the first of his Cafe Lazeez eateries in London 13 years ago and helped to update the country's ubiquitous "Indian" restaurants from relics of the 1970s to trendy culinary experiences, has gambled that he can successfully export his fusion of South Asian and European cuisine the 6,000 kilometers (3,728 miles) back to Islamabad, the capital of his food-crazy native country.   AFP PHOTO/Farooq NAEEM  (Photo credit should read FAROOQ NAEEM/AFP/Getty Images)

The motivation for foodservice operators to invest in energy saving catering equipment should strengthen as a result of rising utility costs and a better understanding of lifecycle costs.

That’s the view of The Carbon Trust, which believes the industry’s obsession with CAPEX when procuring commercial kitchen equipment is beginning to fade, albeit very slowly.

Speaking at the recent Gram Go Green Summit, The Carbon Trust’s associate director, Dominic Burbridge, said there was a growing awareness among buyers of lifecycle costing and environmental performance.

“Reducing your environmental impact delivers bottom line benefits and, in a competitive market, will differentiate your business and your products and services,” said Burbridge, noting that anticipated energy rises of more than 30% by 2020 were concentrating operators’ minds on the subject.

Burbridge pointed out that 85% of the lifecycle cost of cooking equipment is typically associated with the energy used in operation. Consequently, operators should be doing their sums on how much equipment is likely to cost them after they have purchased it.

Research shows that energy costs are equivalent to 5% of revenue, while pre-tax profits can be 15%-20% of revenue. Cutting energy costs by just 10% is equivalent to delivering a 3% to 4% increase in profits, said Burbridge.

He concluded that operators were “feeling the pain” of acknowledging that in-use costs are the majority lifetime factor and knowing that employees leave things switched on. But he said the widespread availability of efficient equipment on the market today, coupled with evidence of the impact that efficient operating models can have on an operation, meant it was in operators’ hands to reduce their running costs.

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