Environmental worries and soaring oil prices are forcing foodies into the freezer to rethink their energy consumption. Miles Clarke joins them in search of solutions.
For many restaurateurs, the national campaign to reduce carbon pollution is perhaps a mere distraction at a time when they’re already looking for ways to kickstart a business hammered by surging fuel prices and mortgage rates.
The effort to drive down energy consumption is, at this stage, largely focussed on the big retailers who are looking to refrigeration as an area where they can achieve more energy efficiency.
As massive supermarket refrigeration systems start to generate less heat and chew less energy, similar technology will surely follow into the
foodservice sector. In fact, some of the nation’s leading refrigeration suppliers are already rising to the challenge.
While it’s been a tough winter for many in the trade, there are some signs that there’s still a good measure of resilience in the industry.
For one, there’s a strong indication that the industry is paying its way. The Silver Chef hospitality financing organisation runs a daily monitor of the direct debits its many thousands of customers have in place to cover their weekly equipment rental. The company looks closely at the ratio of debit defaults as an indicator of cash flow, and became concerned at a spike in the level of defaults in February and March this year .
“In recent months we’ve seen this trend reverse,” says chief executive Alan English. “There’s now some doubt that trading conditions are soft overall, but there’s plenty of evidence the industry is paying its bills. We see NSW doing it tough compared to Victoria, while WA is still powering along. Tasmania is doing quite well, as is SA.”
Dealers in new and second-hand refrigeration equipment report sales are between 25 and 40 per cent down on this time last year and that the notoriously hard bargains that restaurateurs always drive are even harder than ever.
“There’s always a demand for second-hand equipment in Melbourne, but I can’t say that it’s increased significantly,” says John Kannizzaro of Industrial Food Machinery (IFM) based in Cambellfield.
“When it comes to refrigeration, we only sell units that are one or two years old, as many of the older units just can’t maintain today’s
required rating of between two and 4ºC. We also do some retrofitting of fridges with new compressors and motors and send them out with a three-month warranty. Some people think they’re getting their refrigeration for a song when they buy at auction, but they really don’t know what they’re in for down the track and it certainly is a big risk. This is basic equipment and it just doesn’t pay to cut corners.”
The company has found the internet a valuable extension to its shopfront, with Trading Post, eBay and its own website playing an important part in its sales mix. IFM also has one member of its sales staff dedicated to maintaining the online presence of the business several days a week.
The restaurant trade is also making savings in refrigeration through the new Caterprice clearance warehouse in Sydney’s suburb of Granville. Former restaurateur Roman Debnar says refrigeration systems that have a few minor bumps and scrapes picked up in transport can be snapped up for hundreds of dollars less than their full price.
“Equipment gets knocked about in the workplace in any event, so if people can save $500 or more off a new unit, it just makes sense. We also have discontinued lines at good discounts, which come with the same full warranties provided for all our new lines.”
Debnar uses the Trading Post online function to extend his reach beyond Sydney and says it has proved to be the most effective medium. He is now shipping his equipment to various locations.
Keri Thomas of Stoddart refrigeration manufacturers says there is still plenty of activity at the lower end of the foodservice industry, as many consumers shift down to fast food and takeaway options instead of inding out.
“There’s less disposable money around and eating out is one area where people can quickly cut back from the mid-range restaurants. It’s a different picture at the top end of the business, where corporate dining is continuing to power along. Those fine dining restaurants with ‘hats’ are still pulling them in.”
“We’re seeing more high-end projects, like one of Neil Perry’s businesses in Sydney, where he’s used custom-designed frigges to display merchandise in an eye-catching way, as well as having open ice wells in bar areas. Restaurateurs know the appeal of high-quality produce and are having refrigeration designed to display it at its best. The refrigeration is becoming a statement.”
With the restaurant industry now coming under the Minimum Energy Performance Standards for refrigerators, which has been spearheaded through the consumer market, the drive for better power consumption has taken on a sense of national urgency.
One area being described as a “work in progress” is LED (light emitting diode) lighting, which is a powerful alternative to the current fluorescent and incandescent lamps. It offers a clear, precise light that is superior to the yellowish glare of the fluoro bar.
The beauty of LED is that it is extremely low voltage and gives out virtually no heat. This takes much of the load off the compressor, which has to compensate for less heat being generated by lighting in its refrigeration.
Stoddarts is currently experimenting with LED options and introducing it to cake display merchandisers for the restaurant trade.
At Goldstein Eswood, Andrew Davidson says there is a trend in restaurant design underway for easily accessible under-bench and under-counter refrigeration.
“It’s all about boosting productivity and having compact units in place in the right spot. We’re also seeing larger restaurants installing split systems so the motors aren’t putting extra load on the air-conditioning system.”
Davidson says there is some evidence that fewer people are taking on refurbishment programs due changing market conditions, but there are still plenty of long-term corporate projects to keep the suppliers busy.
At Orford Refrigeration of Toowoomba, one of Australia’s largest manufacturers, director Liam Orford says it’s not just an environmental issue. The industry is also feeling the impact of cheap Chinese imports as much as any change in trading conditions.
“That said, we’re running well ahead of budget in the corporate area, though we are recognising the challenges the foodservice sector are facing right now. The biggest issue, however, is the drive to energy efficiency and that is becoming even more important than price. We’re seeing excellent sales of our eco-fridge range, especially the glass door uprights.”
What is now clear is that restaurateurs are moving to rental as a means of financing their refrigeration equipment in droves. Silver Chef, which has been in the financing game for 22 years, is a publicly listed company and has seen its turnover increase by 50 per cent per annum in recent years. The scale of the activity in the foodservice area over the past year is evident, with the company posting a 60 per cent increase in profit last year. The company operates on the Rent-Try-Buy scheme, whereby equipment is rented for the first year with an option to buy it or continue to rent.
“Restaurant owners are recognising there’s not a lot of value in tying up their money in quickly depreciating equipment. They’re much better off spending capital on improving their presentation, which enhances the overall value of their asset,” explains English of Silver Chef.