If you work in the food retail industry, you’ve likely heard the news that regulatory changes are afoot that will require grocery stores to make their refrigeration systems more sustainable. Considering that refrigeration is such an integral feature of the industry (a medium-sized grocery store may have dozens of refrigerated reach-in cases and walk-in coolers and freezers), you may assume that these changes will upend store operations.
We’re here to tell you that it’s entirely feasible to make this transition in a seamless fashion, with minimal disruptions to your employees and customers. In this blog post, we’re going to explain why now is a good time to start planning your sustainable refrigeration journey. We’ll also explain how to implement installation projects intelligently, how sustainable grocery store refrigeration upgrades can benefit your operations, and how to start thinking about the timing and priorities of these projects.
The State of Refrigeration in Food Retail Today
Let’s begin by considering the current landscape of grocery store refrigeration systems in the food retail industry. Grocery stores use a wide range of refrigeration equipment, including:
- Conventional single systems: An individual compressor, usually located in a machine room, pumps refrigerant to a few refrigerated cases on the sales floor.
- Centralized rack systems: A group of connected compressors in a central location (such as a machine room) pumps refrigerant to numerous refrigerated cases on the sales floor.
- Distributed rack systems: Compressors are located on the sales floor near the cases. These systems require less refrigerant and piping than centralized systems.
- Self-contained units: All components are integrated in a standalone system. These systems tend to be less efficient than single and rack systems.
Today, most grocery stores use commercial refrigeration systems with hydrofluorocarbons (HFCs), a non-ozone-depleting class of synthetic refrigerants. HFCs are powerful greenhouse gases with global warming potentials (GWP) hundreds to thousands of times greater than carbon dioxide (CO2). In the food retail industry, the average refrigerant leak rate is about 25%. In other words, a quarter of a store’s refrigerant leaks out of its refrigeration systems into the atmosphere each year, where it contributes to global warming. Older systems tend to have more leakage. It’s very costly to replenish HFCs and repair leaks.
Now Is the Time to Respond to Refrigerant Regulations
The regulatory landscape of HFCs is changing rapidly. The American Innovation and Manufacturing Act of 2020 directed the U.S. Environmental Protection Agency (EPA) to phase down production and consumption of HFCs by 85% by 2036. In 2021, the EPA released a rule that codified the Act’s phasedown schedule. Another EPA rule released in 2023 continues the phasedown, setting up an allocation methodology for HFC allowances for 2024 through 2028. Many states have HFC policies as well.
In response to these changes, refrigeration equipment manufacturers are shifting production to systems that use natural, low-GWP refrigerants such as CO2. To get ahead of these regulations, we advise food retailers to begin planning a transition to sustainable systems now. This will enable them to budget for these large installation projects and identify the most cost-effective—and least disruptive—deployment schedules across their store portfolios. By starting early, companies can also coordinate refrigeration installation with HVAC and other energy efficiency upgrades to maximize their energy savings. Replacing refrigeration systems today with traditional equipment is not a wise investment, given that systems can last 25 years but may not be compliant in 10 years.
How Do Refrigeration Replacements Impact Store Operations?
Centralized CO2 refrigeration systems are the most promising sustainable options, mainly because CO2 is non-toxic, non-flammable, has zero ozone-depleting impact, and has minimal global warming impact. It’s a well-understood material with a relatively low risk of being impacted by future regulations.
Because CO2 operating pressures are significantly higher than operating pressures for HFCs, components in traditional HFC-based systems do not support the use of CO2. As a result, retrofitting traditional systems to accommodate CO2 refrigerant is not possible. Food retailers will need to invest in full system replacements, which have capital and installation costs of at least $4 million for a 55,000-square-foot store.
Projects typically take several months to plan and up to a year to implement due to equipment ordering lead times. Much of the system installation is happening behind the scenes—such as on the roof or in back areas of the store—so that, when a new case is installed on the sales floor, it can be quickly attached to the new system. The store can continue business as usual, with very small areas closed off at any given time.
It’s best to stage projects to minimize disruptions to store operations. A common staging approach is to replace a single refrigerated case overnight and spend the next few days getting the new case up and running and loaded with merchandise. A store may lose access to this case for 2-3 days. One to two cases could be replaced each week.
Because of economies of scale, completing a comprehensive store replacement in a single, continuous project costs hundreds of thousands of dollars less than dividing the replacement into multiple projects over several years. For example, one project expense is renting refrigerated storage units. These are placed on site and used to store merchandise emptied from phased-out refrigerated cases. It’s much less expensive to rent this equipment once than multiple times. Consolidating a system replacement into a single project also helps to reduce the number of disruptions for store staff and customers.
Benefits of Sustainable Grocery Store Refrigeration
Deploying sustainable refrigeration can benefit stores in many ways. Compared to units made 25 years ago, new refrigerated cases have layouts that are better suited to today’s food packaging. Because they are better lit, new cases can reduce a store’s overall lighting electricity costs and provide a more attractive merchandising experience for customers.
Stores can potentially reduce their refrigeration-related energy costs. Replacing a door-less traditional refrigerated case with a CO2-based case with doors can reduce load by more than 60%. Because not all cases can get doors, this load reduction usually translates into a roughly 30% decrease in overall refrigeration energy use. Many stores with door-less refrigerated cases have to run the heat to maintain comfortable temperatures. Less heating is needed when these units are replaced with CO2 refrigerated cases with doors, thus reducing HVAC-related electricity costs.
One of our food retail clients decided to install refrigerated cases with doors because shoppers complained that the store was always too cold in the refrigerated aisles. That complaint has now been addressed. Because customers are more comfortable, they are likely to spend more time shopping in the refrigerated aisles—and even purchasing additional items that were not on their shopping lists.
A full system replacement is a great opportunity to re-evaluate a store’s design and layout. An analysis might reveal that a store doesn’t need as much refrigerated space as it currently has, reducing a system replacement’s capital costs. It may also uncover more attractive or efficient ways to utilize the store’s square footage.
With so many stores switching to natural refrigerants, refrigeration contractors are becoming more competent with the new equipment, and the supply of maintenance technicians is growing.
Finally, there are important marketing benefits to staying ahead of the regulatory curve. EPA’s GreenChill certification program for food retailers recognizes individual stores for voluntarily adopting sustainable refrigeration technologies.
Charting a Pathway to Sustainable Grocery Store Refrigeration
Figuring out the priorities and timing of a comprehensive replacement is a solvable math problem that involves evaluating several factors across your company’s portfolio of stores, such as:
- Which stores use the refrigerants with the worst environmental impacts—in other words, the highest global warming or ozone depletion potentials?
- Which stores have the highest costs to replenish refrigerants that have leaked out?
- Which stores have the highest energy, operations, and maintenance costs?
- Which stores have remodeling plans and/or could benefit from an aesthetic upgrade?
- Which stores have the greatest sales?
- Which stores are your flagships?
Consider partnering with Taper. We will plug your portfolio of stores into our strategic facilities investment tool, which considers the many variables that go into the refrigeration investment decision-making process. This will result in a prioritized list of stores, a description of what work will need to be done, and a timeline of when it should be completed. This data-driven process yields a comprehensive solution for updating your entire portfolio and proactively meeting regulatory requirements.
There are several deployment strategies for CO2-based systems, each with pros and cons. These include swapping a centralized traditional system with a centralized sustainable system and replacing existing infrastructure with CO2 condensing units in stages. We can help guide your company to the strategy that best suits its needs and operations, drawing on our own technical expertise as well as the extensive knowledge of our industry partners—a large cadre of design, engineering, installation, and manufacturing professionals.
Benefits of Partnering with Taper
What differentiates Taper from other building efficiency providers is our deep understanding of grocery store operations. Many of our staff come from the food retail industry. We have completed refrigeration projects in thousands of grocery stores and interact with store employees on a daily basis. We don’t just order equipment and manage installation contractors. We spend a lot of time learning how your stores operate and understanding your pain points so that we don’t hit them. Our goal is to make these projects look and feel seamless for your customers and employees.
Ready to move forward on your sustainable refrigeration journey? Explore Taper’s sustainable refrigeration solutions.