A Pound of Cure
ABA’s Energy and Environment Committee focuses on costly rules and regulations that can drain your company’s bottom line.
BakingBusiness.com, Sept. 1, 2011
by Dan Malovany
For Jim McKeown and Jerry Hancock, the adroit adages from Ben Franklin summarize what’s done behind the scenes when the Energy and Environment Committee of the American Bakers Association (ABA) meets. When it comes to energy, a penny saved is a penny earned. According to the committee’s co-chairs, sustainability is about lean manufacturing and eliminating waste in the operation. It’s not a one-and-done program but often a change in practices that results in a perpetual payoff. It also changes workplace culture where employees continually look for ways to identify waste and suggest ways to eliminate it. Sometimes, it involves a capital investment. Other times, it’s a change in procedures.

When it comes to environmental rules and regulations, an ounce of prevention often becomes a pound of cure. Ignorance is not bliss but drains precious resources to pay for fees or unnecessary tests. Committee members often must figure out how to interpret legalese or vague regulations. Failure to get it right or to file proper documentation can result in costly fines and unwanted publicity.

The committee also deals with issues ranging from air permits, Environmental Protection Agency (EPA) greenhouse gas rules, renewable fuel standards and air stack emission formulas to sustainability, water conservation, water containment, ethanol legislation and a host of energy policy issues.

This interview with Mr. McKeown and Mr. Hancock is part of an exclusive series from Baking & Snack magazine on how ABA’s key committees affect its members’ bottom lines and why more bakers should become more involved. The next committee meeting is Oct. 4 in Schaumburg, IL. For further information, visit www.americanbakers.org.

Baking & Snack: Why should bakers get involved in the Energy and Environment Committee?

Jim McKeown:Bakers need to understand that many issues we address are on the back burner or the back shelf, but if these issues should rear their ugly head in the bakers’ facilities or companies, they can cost them dearly. A lot of problems come from ignorance. That’s why we try to get people engaged.

The best example was a recent issue in Indiana where regulators questioned emissions from certain pieces of equipment, namely proofers, and they wanted air permits for them. Then all of a sudden, we rallied the troops through ABA, and we got 14 bakers from Indiana to participate in discussions with state regulators. The horse was out of the barn; now we needed to do something about it.

If bakers are engaged in ABA, they’ll understand the issues. They’ll understand how to respond to regulators and do a better job anticipating such matters.

Jerry Hancock: Participating in the committee allows bakers to keep up with current and future regulatory actions that can affect their businesses. The committee regularly provides comments on proposed rules, and occasionally, we meet with regulators to discuss the impact new rules could have on bakery operations. Being able to provide this direct input can result in changes to rules that are beneficial to both bakers and regulators.

Equally important, participating in the committee provides members the opportunity meet with other professionals in the industry to discuss issues we all face and learn how other companies approach the same problem. These discussions allow us to more fully understand the issues and the different options we have to address them.

What are the priorities for the committee for the rest of 2011 and in 2012?

Mr. McKeown: Water conservation is one because water is one of our main ingredients. It’s becoming a scarce resource. Remember, you don’t make water. You recycle it. First, you use it. Second, it gets put into a municipal sewer system. Then it’s treated and put back into a river. The sun evaporates it, clouds form and create rain. We don’t have an unlimited supply of water. Water conveys ingredients, our products and waste, and it’s the least maintained conveyor in our bakeries. We don’t pay attention to it. You can literally throw thousands of loaves of bread away because water is carrying flour, sugar and other ingredients down the drain.

Another big issue is limiting waste going to the landfill. We need to better understand recycling and how to avoid putting waste into a landfill. Practically speaking, the more you recycle, the less you pay the garbage man to haul it away. It cuts your costs and limits what you are putting into landfills. It’s a win-win for our industry.

Another big issue is the whole re-look at refrigeration issues now coming into play under Section 608 of the Clean Air Act. EPA is proposing ratcheting down regulations and involves more recordkeeping. EPA is talking about “three strikes and you’re out.” If you have equipment that leaks three times in a year, you will have to replace that system or components. That could cost $300,000 or more per bakery. We’re trying to actively engage in dialogue with EPA on this issue.

A final issue staring us in the face is the spill prevention, control and countermeasure (SPCC) plans coming due in November, and this involves integrity testing for tanks in bakeries, secondary containment around storage tanks for fats and oils in bakeries, and more recordkeeping and inspections. It takes people to understand these regulations to ensure you are in compliance with them. These last two issues have significant cost implications for our members.

How have these issues changed from the past?

Mr. McKeown: The one change has been sustainability. During the past two years, our industry has understood that sustainability is not about “bugs, bunnies and birds.” It’s about a business model, and ABA positions it in relentless pursuit against waste.

Our approach involves a green initiative, but it is more about eliminating waste. It’s easier said than done. You need people to run, manage and head these projects. It requires more education and participation from people on our committee to help ABA members understand the value of these efforts.

Why did it take so long for the baking industry to become sustainable?

Mr. McKeown: Many times, our members are traditionalists about getting the product out the back door, but there are so many opportunities on this sustainability journey to lower costs. It’s not only about being green, but it’s the advantages you can also get to take waste out of your business.

Other industries have partnered with the EPA’s Energy Star for Industry program. How is the baking industry approaching it?

Mr. Hancock: Energy Star for Industry is a voluntary partnership program where the EPA works with different manufacturing sectors to encourage the reduction of greenhouse gas emissions by improving energy efficiency. First, an industry working group of energy managers and engineers is formed. Then, this group works with EPA to identify the industry’s energy management best practices and to develop a self-scoring system that allows facilities within a particular industry to score themselves against their peers.

For many years now, the ABA Energy and Environment Committee has talked about establishing benchmarks; however, the challenge has been how to collect and share that data. Earlier this year, the committee met with Walt Tunnessen [the national manager for EPA’s Energy Star for Industry program] and heard how the biscuit and cracker makers worked with EPA to develop Energy Performance Indicators (EPI) for their industry. The committee reviewed those EPIs and decided that it would be good to have EPIs for the bread industry. Participation in the Energy Star Program for Industry program should result in tools developed specifically for the baking industry, which will help improve operational efficiencies and provide a benchmark to measure efficiency against industry peers.

In the past, many companies have been skeptical of partnering with EPA out of fear that opening up to EPA on side projects such as this would result in some unintended regulatory or enforcement action. Seeing how the program worked with the biscuit and cracker group relieved some of that tension and helped us to see the benefits of participating in the program.

On the broader issue of sustainability, many companies used to see sustainability as a fringe movement focused on nature and the environment. Now, I think they are starting to see that sustainability is really about becoming more efficient and optimizing the resources that you have. Sustainability programs do conserve energy and resources, but they also reduce costs, which makes a positive impact on the company’s bottom line — a win for both the environment and the company. (Editor’s note: For more on EPIs, see “Sustainable practices take companies from red to green”.)

What are the challenges in applying a sustainability program in existing facilities vs. designing one in a new bakery?

Mr. Hancock: The biggest challenge is overcoming old habits. Doing things the “old way” is comfortable, and changing work practices is difficult, especially when the new practice may require more work or effort. Until employees understand the nature of the change and see how it will benefit them, old habits don’t die — especially on third shift, when there are fewer individuals on hand to keep an eye on things.

The second biggest challenge is competing for the capital improvement dollars required to update the old, inefficient equipment — especially when it is functional and doing its intended job, despite the fact that it’s wasting energy. Return on investment and paybacks have to be there to justify the project.

In designing a new bakery, many sustainable features can be put in up front. More efficient equipment can be incorporated for little or no additional cost. Also, new, more efficient procedures can be implemented right from the start, which is much easier than having to retrain employees and break old habits.

When the committee meets, how can members take the information back to their businesses to improve their companies’ bottom lines?

Mr. McKeown: The meetings will give them insights into regulations and how they affect their business. It will give them deeper understanding when it comes to those regulations. It will help them get out ahead of the curve. It can provide them with a forum for asking questions in a confidential way about regulations and using ABA as a channel to go back to the regulators as an anonymous party and get answers to those questions.

If you participate in this committee, you need to look at it as gaining a competitive advantage for your company to avoid fines and penalties and to avoid unnecessary testing of things you might think you need to do. A lot of times, you can’t get that from an ABA communications bulletin that comes out once or twice a week. You need to sit in a meeting with bakers and some of our other ABA members who can offer expert advice on how to interpret rules and regulations coming from the government agencies.