The industry's fragile bottom line is lending weight to an emerging strategy of holding back from switching en masse to chlorine-free refrigerants.
Two chains -- Jitney Jungle Stores of America, Jackson, Miss., and Hannaford Bros., Scarborough, Maine -- thus far have opted to completely change over to hydrofluorocarbons, or HFCs. But many other retailers, including Kroger Co., Cincinnati, are adopting a mixed strategy of using HFCs and chlorine-containing hydrochlorofluorocarbons, or HCFCs, whose conversion process is far less costly but which run the risk of being phased out sooner than expected. Like CFCs, HCFCs also deplete the ozone layer,
although much less extensively.
It is a critical decision for supermarkets. Production of chlorofluorocarbon compounds R-502 and R-12 will end by Dec. 31, 1995. That could drive the costs of the refrigerants into the stratosphere for chains seeking to buy them on the market. Excise taxes also are being levied against the compounds.
"I think capital and expense dollars are very tight and I'm sure people want to be spending that money on what they perceive to be the right answer," said Keith Oliver, manager of mechanical services at Kroger. "I think the temptation is to wait until you're sure that the direction you plan to move in is the right one before you get very involved in retrofitting.
"Many of the chains are just trying to decide what's best for them. Some have started testing the alternate refrigerants sooner than others and so they're farther along. It's my perception that at this point everybody is scrambling to put together a program if they don't already have one. If they're not, they should be."
Bob Bittner, director of engineering at Giant Food, Landover, Md., notes that "any capital expenditure that doesn't contribute to sales volume is very unpopular. Therefore, commitments to conversions to HFC alternative refrigerants are not taking place as expected. Instead, many retailers have developed a hybrid strategy of using both HCFCs and HFCs and, of course, recycling the CFCs they recover."
It's the cost that is making many retailers especially cautious, albeit a cost that Jitney Jungle and Hannaford contend is well worth it. Jitney Jungle is spending $4 million and Hannaford Bros. is spending about $2.5 million. Larger chains, however, are estimating capital outlays upwards of $25 million to completely retrofit with HFCs. That breaks down to an average of $50,000 per store, depending on labor costs and store location. Retrofitting with HCFCs would cost about $15,000 per store.
Because of the expense, Kroger and some other large chains are using HFCs for new installations and HCFCs to retrofit a percentage of their stores. "We've recommended that our operating units convert 25% of their CFC-using facilities during 1994," said Oliver. "At this point, our direction is to utilize the HCFC blends. I think there are a lot of chains that will take that approach.
"There are a number of reasons why we are beginning with HCFC blends. When you look at the advantages and disadvantages of using either HCFC blends or HFCs, for our situation HCFC blends were more appealing to use for retrofits. The conversion process is simpler and less costly," Oliver said.
Just as important, retailers can recycle the CFCs recovered from the HCFC retrofits and use them as feedstock for equipment in exist Together with plans to plug leakage in refrigeration units, the availability of CFCs could be stretched out.
"Everybody recognizes that HCFCs and the HCFC blends are very important parts of the conversion process. It would be a mistake to move up the phaseout date for HCFCs," said Oliver, referring to environmentalists' efforts to stop HCFC production. "What people will find is that, as with the CFC issue, people will move to HFC on their own accord."
The Montreal Protocol, an international agreement regulating production and use of CFCs and HCFCs and other compounds, calls for a scheduled phaseout of HCFCs by 2030. By 2015, production is to be cut by 90%, using 1989 consumption as a base.
Another large chain has adopted a strategy similar to Kroger's. "We have a policy of HFC refrigerants for all new stores and enlargements. We have a separate policy covering the phaseout of CFCs in existing stores," said a high level executive at the top-10 chain, who asked not to be named.
About 20% to 25% of the stores in the chain will stop using CFCs and start using HCFC blends. "The big thing is we don't think HFCs are a real good fit for retrofitting. They're OK for new systems. The stores that have R-12 are older and will be remodeled or closed within 10 years," he said.
"There is no reason to have a mad rush to change over" to chlorine-free refrigerants, he added, "unless you want to take the position in the industry to say, 'I have no CFCs in my stores at all.' "
Product availability is another reason why HFCs haven't been as readily substituted for CFC compounds. AZ-50, manufactured by Allied-Signal, Morristown, N.J., and HP-62, made by Du Pont Co., Wilmington, Del., were just commercialized within the past six months. Both chemical manufacturers say there is now enough of the new-generation refrigerants to satisfy demand, although one source confirmed that many customers were buying HCFC blends for retrofits and relying on HFCs for new installations.
The anomalies in the industry -- Jitney Jungle and Hannaford Bros. -- opted to change over even before the HFC compounds were widely commercialized. Both chains have the largest rollouts to date of CFC-free coolants.
Jitney Jungle expects to be CFC-free by the end of 1994. The $4 million cost to retrofit its 107 stores breaks down to about $30,000 to $50,000 a store.
Retrofitting with non-CFC refrigerants is more costly because it is more time-consuming, requiring three oil changes, said Norm Twisdale, a consultant who is in charge of Jitney Jungle's refrigeration program.
To stay on schedule, Jitney Jungle hired two mechanics this month who will be dedicated 100% to the retrofits. "It's really not possible to do this with the personnel that we have because their days are full with maintenance [of existing equipment]. Retrofitting is not the kind of thing you can work on for a few minutes and leave for a service call and come back," said Twisdale.
"We'll be able to get out of the CFC business once and for all. It does a lot of things for you. First, you avoid the increasing price of CFCs. Also there is a legal liability in the event that someone should break the law and vent some CFCs. There's also the cost of maintaining the reclaimers. Ninety percent of the industry is going to be out there two weeks before the deadline trying to get into a retrofit program," he said.
Hannaford expects to complete retrofitting units using CFC coolants by June 1, 1994, said Tom Mathews, facilities and energy engineer. The 22 stores using R-22, an HCFC, will be retrofitted with chlorine-free coolants beginning next summer. "We're converting [completely] to HFCs for two reasons. One is that in our particular competitive territory, being very green is very important to our customers. So we have a clear-cut commercial interest, which is supported by probably higher than an average level of green consciousness among the company's senior management," said Mathews. "On the other side, we think we're saving money by doing it now. There is already a substantial difference in price between CFCs and HFCs in favor of HFCs, and that gap can only widen," he said.