HEB Cover Story PDF

W hen PRODUCE BUSINESS presented its annual sustainability award to H-E-B’s leadership team, the executives insisted others withinthe organization are more deserving and the recognition was misplaced. Family-owned and ever loyal to its Texan roots for morethan a century, the company operates under a bold collaborative philosophy.

In its drive to grow its sustainability platform and commandeer greater market share in its established, yet competitive home turf, H-E-Bstakes its success on a wide-range of players:

• 76,000 employee “Partners,” many accruing tenures spanning 20 to 30 years and beyond

M A Y 2 0 1 1 • P R O D U C E B U S I N E S S 27

H-E-B’s store-level“partners” are at the coreof executing many of thecompany’s successfulsustainability initiatives.From left to right: JustinIbarra (6 yrs), BelindaRose-Garza (1 yr), BrianMoore (23 yrs), GilbertMartinez (18 yrs),Lamar Brown (1 yr) andNick Tijerina (1 yr).

H-E-B: Partnering For SuccessH-E-B’s familial tie to its Texan — and Mexican — communities bolstersits sustainability goals and provides a competitive edge. BY MIRA SLOTT

PHOTOS BY TOMMY HULTGREN

PRINTEDON

RECYCLED

PAPER

Coverstory.qxd:Layout 1 4/25/11 2:21 PM Page 1

and innovate in all realms of the sustainabilitypuzzle. For H-E-B, the strategy is a give-and-take of guiding and being guided to balancethe mosaic of people, profits and planet — achallenge its many partners welcome.

Produce: The Common ThreadH-E-B’s sustainability principles plant

produce at the core. Fresh produce, in manyways, defines H-E-B’s identity, according toSusan Ghertner, director of environmentalaffairs. “Produce is who we are,” she says,pointing out that fresh, local and sustainablewere driving principles at the company yearsbefore the concepts became fashionable.H-E-B promotes its mission to offer

consumers an abundance of high quality, freshfruits and vegetables tailored to their needs,which threads into its sustainability strate-gies: bolstering local farmers, connecting andgiving back to the community and keeping itin Texas and Mexico.

Targeted For The Long-TermWhat are the roots that differentiate H-E-B

from others and enable it to do the things it

• Minority companies H-E-B engages andenables through its supplier diversity program• Long-term relationships nurtured with

small to mid-size local farmers• Numerous charitable organizations

H-E-B actively supports in giving back tothe communities• Ethnically varied consumers, who have

developed an unusual affinity for H-E-B’scustomized approach. “My H-E-B” is acommon phrase shoppers in H-E-B territoryproudly use to reference the store closest tothem, entertaining their connection to thepartnership mentality.One of the largest independently owned

retailers, the 330-plus-store chain reachessome 6 million customers per week in 150communities purposely concentrated solely inTexas and neighboring Mexico. H-E-B bannersinclude Central Market, H-E-B Plus!, Mi Tiendaand Joe V’s.As a privately held company, H-E-B is

unfettered by the pressures of producingshort-term gains to appease stockholders. Thecompany capitalizes on its flexibility to exper-iment with emerging technologies, take risks

28 P R O D U C E B U S I N E S S • M A Y 2 0 1 1

‘Building a future on a paststeeped in history’ is what’swritten in a brochuredescribing H-E-B’s currentheadquarters officeslocated within The SanAntonio Arsenal, built in1859. On the steps of theArsenal’s courtyard arerepresentatives of PRODUCEBUSINESS and some ofH-E-B’s partners. Left toright: Mira Slott (PB), BillReynolds (H-E-B), KenWhitacre (PB), WinellHerron (H-E-B), Jim Prevor(PB), Hugh Topper (H-E-B),James Harris (H-E-B) andSusan Ghertner (H-E-B)

does so well? Two notable factors spring out:the first is being privately held, the second isits unique position as the only retailer of itsscale and size to operate exclusively in onestate and across the border in Mexico. Itsfamilial tie to its Texan communities bolstersits sustainability goals and provides a compet-itive edge.“One of the primary features of our

company is the long view, and that supportsour partners; it supports our stronger businesscase to be sustainable as a business model,and it supports the community,” says HughTopper, group vice president of fresh procure-ment and merchandising.This attitude extends toward dealings

with suppliers. There has been a lot ofchange among many retailers in the way theyprocure in the produce industry, reactingshort-term to the tremendous pressure tofinagle the most competitive price. Thesefleeting deals raise concerns about the long-term vitality of the produce industry, asgrowers need to have the financial where-withal and confidence to reinvest andexpand their facilities, while modernizing to


keep up with the latest food safety andproduction techniques.

“When we are working with supplierstoday, we have conversations about needingthem as much as they need us,” says Topper,adding, “H-E-B recognized that years andyears ago — before I joined the company —that we want to have great relationships withgrowers and farmers.”

From the beginning, there have been localgrowers that H-E-B has helped finance to gettheir businesses started, Topper notes. “Wehave conversations with growers about whatwe might be doing that has a negative impacton their business and they give us openhonest feedback,” he says. There are areaswhere H-E-B can make changes and some-times areas where it cannot because of theneed to stay competitive in the marketplace,but “having an open conversation withsuppliers about what is driving cost in theirbusiness and things that they want to do tobe sustainable within their organization andunderstanding how we can support that hasbeen a strong goal of ours,” he emphasizes.

Small farmers are not always well capital-ized; it could be risky for them to plant 20acres of okra because if they do not have ahome for that product, they are going to be inbig trouble. “In certain instances, we havestrategic partner relationships where we say,‘If you grow X crop for us, we will take 100percent of your capacity,’” says Topper. “I getto work with growers and farmers and be apart of that lifestyle, and I love the freshnessof that,” he says, noting how he draws fromhis strong agricultural roots and 29 years inthe produce business, including almost 19years at H-E-B.

“We sit down with these local suppliers


“One of the primaryfeatures of ourcompany is the longview, and thatsupports ourpartners; it supportsour stronger businessmodel and it supportsthe community.”— Hugh TopperGroup vice president of freshprocurement and merchandising


Houston and turn around and ship it back outfor small quantities. But if they are moving ina truckload, those opportunities do exist.”

Embracing DiversityH-E-B’s supplier diversity program in its

simplest form is really enabling smalland minority companies to engage incontractual business or service rela-tionships with H-E-B, preferablylocally, explains James Harris,director of supplier diversity. “Ninetypercent is done with Texans becausewe are a Texas-based company, andover 50 percent of that is actuallydone with women,” he says, pointingout that H-E-B was founded in 1905by a woman, Florence Butt.

Often, small vendors confrontbarriers breaking into a larger chain,such as burdensome financial

requirements including millions of dollars inliability insurance. “We lower those barriersand even the playing field,” says Harris. “Wedo require certificates of insurance, but thepolicy is not that exorbitant. As long as theyfollow good agricultural practices, we end upbeing in a very good place.”

sensitize the storesthat when growersshow up at theirbackdoor, they arewelcome as family members, and for the mostpart, stores already know them. They go toschool with their kids, they sing in the choirtogether. If they have a pallet or a truckload,they can go to the backdoor. Certainly it doesnot make sense to drive it all the way to oneof our distribution sites in San Antonio or

and talk about their crops and the variousyields coming in. They even give us granularinformation: ‘We are planning to rotate thecrops and get nutrients back to the soil.’ Sothat actually does take place, but there aresafeguards, and we cannot over-promise toeveryone,” says Topper.

“In some of the localized markets, we haveregional produce buyers who really work withsmall suppliers to build relationships,” saysTopper. “They do the forecasting and they


Part of H-E-B’s locallygrown efforts extends tothe company’s outdoorgarden centers, called TexasBackyard, where many ofthe plants and foliage itemsare grown in Texas. Part-ners at the Texas Backyardsection of the H-E-B Plus!store at Stone Ridge Marketin San Antonio are (left toright): Steven Valencia(6 years), Brandon Janes(6 years), Brian Milner(1 year) and Jennifer Floyd(5 years)


H-E-B, and that part-nership can really change their life and theirfamily’s life, and those in their surroundingneighborhoods,” adds Harris. “These changesfuse back into the communities that we serve.So it is full circle.”

H-E-B’s minority business outreachinvolves a robust partnership with the TexasDepartment of Agriculture and its extensionoffices in five different regions throughout the

A strong educational outreach effort openscommunication between H-E-B and potentialsuppliers and those farmer-partners wantingto reach new plateaus. “We provide them thatopportunity to get in front of the decision-makers and the buyer, and we make sure theycomplete all the paperwork and are ready todo business,” Harris continues.

“Our reward is that we can create oppor-tunity for a company to do business with


state. Harris rolls up his sleeves and hits farmsacross the state with a guy he and localfarmers affectionately call “Big Mac,” who, inmore formal circles, is known as EdwardMcGowan, marketing specialist at the Austin-based Texas Department of Agriculture.

“He is about 6’4” or 6’5”, 280 pounds andknows every farmer around. He actually goesout pitching to farmers on what crops toplant based upon what is indigenous to thearea and when to actually plant it,”

describes Harris. “When we dothose local outreaches, I call BigMac and say, ‘Let’s go on the road;let’s do a road show.’”

According to McGowan, who isstationed in Houston, when H-E-B isbuying local, it is boosting economicdevelopment, creating jobs, bringing

product and people in and helping thecommunity. “I’m not supposed to be biased,but H-E-B thinks along those lines. I have aspecial place in my heart speaking on behalfof James and his work at H-E-B,” admitsMcGowan.

“When producers grow for a chain store, abetter deal from Florida can come in and thatretailer will drop them,” McGowan continues,

Putting the finishingtouches on a pepperdisplay is Adrian Ortega(2 years), who works at theH-E-B Plus! store at StoneRidge Market in SanAntonio.


vegetables to H-E-B from various regionssouth and west of San Antonio, agrees. Inthe farming business many generations, thegrower started his deal with H-E-B about 11years ago. “We grow for a couple of chainstores, but H-E-B is our baby,” he says. “Wecan count on them and they can count onus. I began with almost nothing, just over20 acres, and now have at least a couplethousand acres exclusively for H-E-B,” hesays proudly.

“HEB is No. 1 to me, and really cares. Theteam works very well with us on supply issues.‘At Easter time, will we be good on greenbeans?’ they will ask us. The buyers reallyunderstand weather issues and ask us to letthem know if it looks like we’re getting into agap, so they can turn to Florida or otherplaces to fill in supply,” he continues.

While other chains get bogged down inlayers of bureaucracy, H-E-B can react on adime. “All they ask for is three- or four-day’snotice. That’s where H-E-B whips everybody’sbutt. H-E-B can react in 24 hours, where thebig chain stores have to go through fivedifferent people,” says the grower, who keepsexclusive acreage for H-E-B, knowing that thechain will remain good on its word and help

“H-E-B is very good at being loyal,” hecontinues. “A lot of chain stores will leaveyou for weather or quality issues until nextseason. H-E-B understands that, and assoon as you’re ready, they’ll come back toyou,” he says, adding, “They don’t try tobeat up the local farmers with pricing

because they want long-term relationshipsand know they have to support us over timeto keep us in business.”

Another grower who supplies a variety of

“but H-E-B, and people like James look outfor the local farmers and will find a place forthem. James will make sure it happens.”

Empowering Local FarmersOne only needs to speak with local growers

working with H-E-B to grasp the depth of thechain’s commitment to the environment andoverall corporate social responsibility. [Torespect proprietary relationships, growers’identities have been protected.] “In myhistory in the produce world, I’ve been with alot of different chains, including Wal-Mart,and nobody is better than H-E-B in supportingthe local grower,” says one local farmer in theWinter Garden area, who has significantlyexpanded his business and prospered by part-nering with H-E-B for 14 years.

H-E-B helped guide the cabbage andonion shipper to branch out into growingother products to fill voids in the chain’slocal assortment. “We’re a family businessstarted by my grandfather,” says the farmer.“We’re not the farmer with 20 acres and apick-up truck delivering to H-E-B, which thechain also welcomes, and we’re not the sizeof Fresh Express in California. We do about4,000 acres of produce a year,” he says.


One only needs tospeak with localgrowers working withH-E-B to grasp thedepth of the chain’scommitment to theenvironment andoverall corporatesocial responsibility.


when we are over,” he says. “I can pick up aphone if I have different items, or a localfarm near me has something else, and thebuyer at H-E-B will try it and support thebuyer at the local community.”

Even if H-E-B has to pay the farmer more,they’ll do it to support the deal, according tothe Winter Garden farmer. From advertisingand promotions to working with individualstores on special merchandising programs thatmay include a visit by the grower, H-E-Bmakes a point this product comes from a localfarm, he explains.

“H-E-B does a lot locally, not just for sales,but also shows the community who thesefarmers are and helps consumers understandthe whole supply chain and the growingissues we face. Consumers see produce has aplace in this area from a labor standpoint, awater standpoint and an environmentalprotection standpoint.”

As far as food safety is concerned, H-E-Bhas instituted a comprehensive program.“From the start of our relationship,” says theWinter Garden grower, “they came to ourfacility, testing critical control points andworking with us, and from there it evolvedinto a whole system. To be an H-E-B supplier,you need to be certified and get third-partyaudits. You also must go through an educa-tional food safety training program specific toH-E-B, which includes Best Practices for foodsafety and sustainability long-term for ourarea.” The grower describes his experience:“With other chains, it’s my way or thehighway, but H-E-B takes more of an educa-tional approach and works with local growersto get them up to speed.

“We were already doing these food safetyrequirements, but some of the small growerslearn from H-E-B what needs to be done. Theyguide you,” says the south/west San Antoniogrower. “When you’re a little local farmer, youget nervous when you get a call from HughTopper, but fortunately, I’ve always beenrecognized for a job well done.”

In Your BackyardLocally grown also extends to H-E-B’s

outdoor garden section, called Texas Back-yard, a unique subsection of the supermarketthat features many plants and foliage itemsgrown in Texas.

“We’ve Got Texas Roots,” displayed on aprominent welcoming sign, parlays a familiarH-E-B theme, figuratively and literally. Theconcept maximizes specialized knowledge ofthe Texan terrain, highlighting unusual plantvarieties and informing customers on how to

the Winter Garden shipper and asked if hewould be willing to work with H-E-B inbuilding a broader assortment. “We wouldn’thave several product lines if not for H-E-B,and a big portion of those go to the chainand support the local deal. In times wherewe have good supply and weather cooper-ates, we’ll supply 75 percent of their needson that item. We know H-E-B will be thereto buy 60 or 70 percent of those items sowe don’t have to worry about our livelihood.We don’t have to try and sell to other places

him out in challenging times.“If I have oversupply, I call the corn

buyer, ‘I’m in trouble... I’m going to have15,000 boxes of corn staring me in the facein a week.’ The buyer reassures me, ‘Justkeep me informed and we’ll run a 40-storead and clean your corn up.’ No other chainstore can do that. It takes two weeks to getan answer back from the other guys,” heemphasizes.

H-E-B was having a shortage of localproducts in certain categories. It went to




Anymajor green initiative requires topleadership support, but to really gainmomentum, you have to have the

bottom-up groundswell and take a very grass-roots approach, according to Winell Herron,group vice president of public affairs, diversityand environmental affairs.

To generate passion at the store level for recy-cling initiatives, H-E-B is formalizing a program toidentify a green champion for each store, notonly to communicate and educate partners oninternal strategies, but to elicit partner ideas, feed-back and spawn a surge of support at the locallevel.

Cross-disciplinary sustainability teams function very closely together onany project the chain undertakes to make it happen, explains Susan Ghertner,director of environmental affairs. “If it’s composting, we have leaders fromproduce, from the stores, from procurement, from environmental affairs, andthen also what’s critical, getting store partners involved.”

“With the economic volatility of the last few years, we have really put thepedal to themetal on recycling, minimizing waste and our impact on the envi-ronment because it’s smart, not only because it’s the right thing to do,” saysHerron. But from a business standpoint, it generates revenue for our companyand gives a great return on investment.

H-E-B’s early embrace of Returnable Plastic Containers (RPCs) depended onits broad, interdisciplinary cost/benefit analysis, as well as visionary thinking,

according to Bill Reynolds, group vice presidentof facility alliance. “When RPCs first startedmoving forward in the industry, everybodylooked at this as a cost. But we looked at packingproduct in an RPC versus a corrugated box, func-tioning better in the cooling system, generatingless trash, spending less labor hours going backto the compactor, and now I’m able to keepmoreof our partners in the produce department.

“Another eye-opener was our ability toreduce shrink. Getting buy-in from suppliersrequired showing them what could happen totheir product after spending all this loving care togrow it,” he explains.

RPCs get cleaned and reconditioned next door to H-E-B’s bustling, central-ized recycling facility, also known as the Reverse Logistics facility, where themotto, “WeDo Everything Backwards,” written on its front door, celebrates thetask of taking products back to their beginnings.

Last year’s recycling numbers tell the story: H-E-B recycled over 303millionpounds of materials in 2010, according to Ghertner. “Total recyclables haveincreased by 11.5 percent compared to 2009, and we continue to add morecommodities each year,” she says.

“Produce recycling is big,” says Maggie Hernandez, environmental projectleader. Every produce pallet has a corner on it, and composites are not goodfor recycling, she says. Her plea to the produce industry is to redesign palletsto eliminate composite materials that are not environmentally friendly. pb

RECYCLING BUY-IN

Reverse Logistics’ Charles Barba (14 years), warehousecoordinator, Ted Lechner, (37 years), manager, and MaggieHernandez (14 years), environmental project leader, standnext to a recycled-materials statue of mascot H-E-Buddy.


care for them.According to Brandon Janes, manager of

the Texas Backyard at the HEB Plus! storelocated at Stone Ridge Market in San Antonio,“Product has to be native and hardy to survivethat strong Texas sun and 100-degree heat,”he says, noting the advantage of cultivatingrelationships with growers in the area.

Employee PartnersThe concept of “locally grown” is equally

important to H-E-B’s internal operations as itis to its external suppliers. Partners mirror themakeup of the community. This commitmentto hiring flows through the company. “Wemake a conscious effort to have partnersreflective of and connected to the diversemarkets in which we compete,” says Harris.

The other hat Harris wears is the diversityhat, and that is focusing on the workforce andmarketplace. “If you have people in manage-ment and in the store who understand theculture and speak the language, it breaksdown barriers and enhances the shoppingexperience,” he explains.

“You have to know your market, or it comesoff disingenuous,” continues Harris. “We have11 diversity counselors strategically placed inall of our regional markets to educate partnerson product handling and drive awarenessupward on cultural nuances so we do not offendanyone,” he says, adding, “We also do diversitytraining. It does not mean you are able to teachdiversity, but that you have a working under-standing of what it means so if someone wantsto engage in a diversity conversation, you donot have to run away from them; you can actu-ally embrace it, and it puts everybody in a morecomfortable position.”

Partner EmpowermentH-E-B empowers its employee partners

through incentivized health and wellnessprograms, as well as innovative educa-tional/leadership classes that create anenergetic work ethic but also a more balanced,happier life, according to Leslie Sweet, publicaffairs director for the Central Texas region.

Partners actively participate in sustain-ability initiatives and devote hours of theirweekends volunteering in charitable commu-nity events, adds Sweet. “We have personalconversations with our partners for everydollar donated. This way, H-E-B allows storepartners to take charge of funding to supportcharities that are dear to them. At the sametime, H-E-B is diligent to vet the organiza-tions to ensure the charities are solvent andabove board with their services,” Sweet


assures. For example, “We have a partner withan autistic child, and she was organizing awalk for Autism. H-E-B lent financial supportand resources for the event, and the effortmotivated 40 more partners to join the walk,stimulating awareness to help the cause,while creating new collaborative friendships.

“Our partners have their fingers on thepulse of folks in Texas,” says Winell Herron,group vice president of public affairs, diver-sity and environmental affairs. “We havecorporate initiatives that run across all of our

stores. We have regional community outreachinitiatives that are focused on particularmarket areas and then we have very targetedgrass roots initiatives store-by-store, lookingat what matters to our partners and whatpeople care about in their community,” saysHerron, adding, “It’s not just about writing abig corporate check.”

H-E-B builds a powerful synergy betweenits partners, suppliers, customers and thecommunity, the foundation for award-winning sustainability. pb



Store Level SustainabilityWhere no two stores are alike, “My H-E-B” is not just a slogan. BY MIRA SLOTT

Continually adjusting to demographic shifts, H-E-B focuses on highly tailored product assortment and how each store is designed andmerchandised. H-E-B frowns on a “peanut butter approach,” says James Harris, director of supplier diversity.“There is a tendency over the years for large chains to put in stores that are really the same no matter where you go,” says Bill

Reynolds, H-E-B’s group vice president of facility alliance. “There is a value there on economies of scale, but it does not really fit each andevery neighborhood.

“At HEB, no two stores are the same; in fact you will see very different looking stores, from the physical presence to customized formattingand assortments depending upon the demographics. Merchants tailor the store so that everything is customer- and community-centric. I thinkwe have a real strength there,” says Reynolds, adding, “I work with Hugh Topper and the team on layout... Produce is our calling card. We have

PHOTOS BY TOMMY HULTGREN

Low wattage lighting,reusable signage,concrete floors andlocally grown produce areamong the many sustain-able aspects of the H-E-BAlon Market store in SanAntonio. Displays arebeing merchandised byproduce manager BobbyWojcik (partner for 16years).


it upfront to make a first impression, and italso has to have flexibility to adapt toseasonal and product changes and set thetone for the customers of that shop.”

Adds Hugh Topper, group vice president offresh procurement and merchandising, “Oneof our mottos is, ‘We buy Texas first,’ so wework hard with large to mid-size to smallgrowers to deliver. First and fore-most is getting everyone alignedwith our strategy on what we wantto accomplish from a merchan-dising perspective.

While walking through twoLEED-certified stores in SanAntonio, it becomes obvious thatpartner input is an integral part of thesustainability movement. One clevermerchandising idea epitomizes a multi-faceted solution that marries people, profitsand planet. As a starting point, manyproduce displays use Returnable PlasticContainers (RPCs), notable in itself, as H-E-B was a pioneer of RPCs — one of the earlyadopters on a chain-wide basis when therewas a lot of industry resistance.

These streamlined RPC display racks areresourcefully designed for rear loading, whichincreases efficiency, uses less space and keepsaisles clear for shoppers, explains BobbyWojcik, produce manager at the LEED-certified,but traditional H-E-B store at Alon Market.

The merchandising concept goes one stepfurther in looking out for the well being ofH-E-B’s partners. Ease of loading lightens theworkload and the back pain. “We’re alsoconverting to banana box pods, so we don’thave to bale cardboard or spend money on adisplay fixture,” says Anna Chandler, regionmerchant of produce and floral. “Pods areflexible and easy to set up. The display lookslike a farmer’s market, puts focus on theproduct and our customers like it,” she says,noting that the team is working on trans-lating the concept to other produce items.

In addition, “We’re transitioning out of our


While walking throughtwo LEED-certifiedstores in San Antonio,it becomes obviousthat partner input isan integral part ofthe sustainabilitymovement.

Four-year partner DylanPetterson demonstrates arear-loading display ofRPCs at the Alon MarketH-E-B store.



Forthe fresh produce industry, where perishableproduct devalues exponentially with time,supply chain transportation logistics is its life-

line.WhenMikeMoynahan, distribution asset design

and procurement, came on board, Charles Butt, H-E-B’s Chairman and CEO, had just taken over thereins. According to Moynahan, “Charles really is aperson who aspires to greater heights, challengingthose throughout the organization to follow his lead:What canwe do tomake our systems superior, raisesafety standards, and become faster, more efficient,more competitive and more sustainable?”

Whether it’s navigating changing federal andstate transportation regulations, improving driversafety, designing more proficient/ergonomic trucks,tackling cold chain issues or forecasting fuel options,H-E-B takes it on, all within a sustainability mandate.

To be truly sustainable, it has to be economical,says Bobby Greene, director of fleet maintenance. “Ipersonally think electric is more efficient, but it’s expensive, so it’s not effi-cient now.”

“Very little — some 20 percent — of our Houston fleet runs on alter-native fuels,” addsMoynahan. “We have had up to half our fleet inHoustonthat was on biodiesel before, but the quality levels are not consistent. It hasto be at least as competitive.” H-E-B has since set up a pilot program in

Houston, where it is testing liquefied natural gas.What really holds potential are hydrogen fuel

cells, according to Greene. “We’ve been given theopportunity to try products and they do work, butnot without problems,” he says. H-E-B, for example,is creating its own hydrogen. “Wewere the very firstretailer to launch fuel cells in a forklift fleet,”contends Greene.

“We generate our own hydrogen reformed outof natural gas. It’s not an economic gain but it is abreak-even,” he acknowledges. “It was a doableprogram, although we had lots of bugs to beginwith, but now it’s up and running. Eventually, wewant to power our refrigerated diesel trucks withhydrogen, take the diesel engine out and put a fuelcell in. It would be simpler, easier and safer thanfueling your car,” says Green.

“H-E-B is way ahead of the curve on fuel cells,”says Green, “but we’re not quite there yet. It takestime to get all the kinks out. Our goal is to replace

all batteries with fuel cells.” In the interim,H-E-B has installed high frequencycharges in batteries to boost power and reduce labor demands.

Moynahan relishes the learning process. “We’ve dramatically changedhowwe do business because of the culture at H-E-B,” which allows its part-ners to experiment with new technologies, and take chances to gainsustained leverage.” pb

H-E-B’s forklift fleet is powered by hydrogenfuel cells. According to Bobby Greene, directorof fleet maintenance and partner for fouryears (in background), H-E-B will soonattempt to power its refrigerated diesel truckswith hydrogen.

FUELING ALTERNATIVES


wasteful paper signage in theproduce department and the restof the store, and converting toreusable, efficient signage thatmerchandisers can flip,” adds MikeWillis, general manager of the H-E-B Plus! LEED-certified store atStone Ridge Market.

Another sustainability win ismoving to concrete floors from linoleum, whichare easier to clean with fewer chemicals, whilebeing more durable, according to Chris Clutter,engineering design manager, design andconstruction.

“We’ve gone to a continuous dimmingsystem on some of our more recent stores sothat it is not as abrupt or noticeable to thecustomer,” says Reynolds. “We wanted tomake it more transparent and something thatis not a distraction.

“We must always remember that our part-ners and our product and the services aroundthose are what we offer,” Reynolds empha-sizes. Using less energy, for example, is areally good consumer cost model. “Customersneed good prices, and the fact is, if we do notmanage our cost well, we cannot supportthose demands.”

Behind The ScenesThat strategy pursues all aspects in the

sustainability journey, with an unyieldingpush to cut out waste, reduce energy, alleviateinefficiencies and innovate both businesssavvy and environmentally friendly solutions.

“Being a supermarket, we use a lot ofenergy through refrigeration, high-intensitylighting and air conditioning required to keepthe humidity out,” says Joe Lopez, H-E-B’s


“We must alwaysremember that ourpartners and our prod-ucts and the servicesaround those are whatwe offer. Customersneed good prices, andthe fact is, if we do notmanage our cost well,we cannot supportthose demands.”— Bill ReynoldsGroup vice president of facility alliance

Twenty-one years as apartner, Anna Chandler,region merchant forproduce and floral, spendsmuch of her time lookingfor ways to enhancedisplays while finding effi-ciencies and better ways tolighten partners’ workloads.



energy manager, who focuses on demand-sidemanagement in stores, distribution centers,manufacturing facilities and warehouses.

“H-E-B spends a lot of money on not justelectricity, which is a big part of the pie at anoverwhelming percentage of the store’s oper-ating cost, but we still spend quite a bit onwater and natural gas. So my job is to helpreduce our energy consumption, which goesright to the company’s bottom line,” he says,adding, “Electricity is a huge expense; I thinkit is No. 3 behind labor and rent.”

Lighting retrofits, which Lopez calls thelow-hanging fruit, reduced wattage 41percent. “With over 200 lights on average perstore, we saw a four to six percent reductionin our total electricity use, in addition tolowering maintenance and labor costs. But thebenefits translate to the produce departmentas well, improving color rendition and visualappeal on the retail floor,” says Lopez. Oneadded benefit of new lighting is that thosehigher wattage fixtures generated more heat,which was bad for produce.

Open cases in stores use a significantamount of energy to keep products cold. Forstores that are not open 24 hours, nightblinds keep the cool air in the cases for a twoto six percent reduction on the meter, but alsolead to less shrink, Lopez explains.

In the pipeline, H-E-B would like to installLED lighting in refrigerated cases throughoutthe store, says Lopez, noting, “We have testedsome in produce cases here in town.” Oneadvantage of LED is lower energy, but the reallybig advantage is much lower maintenance.However, there are challenges in cold climatesin keeping their full brightness. H-E-B is alsotesting innovative air-conditioning technologythat reuses existing water condensation.

Water is a big issue, albeit still relativelycheap when prioritizing initiatives, saysLopez, noting challenges in the hot Texasweather. Many variables impact alternativeenergy results, he explains, noting that exper-iments with solar power still only amount toone percent of H-E-B’s total annual consump-tion, and wind energy purchases requiring abigger upfront investment are a hedge. “Weare hoping that over the life of the purchase,there is a kind of breakeven point,” he says.

“We are very open to trying new things,”says Reynolds. “With research and develop-ment, some things work, some things do not,but there is a willingness to explore whatmakes sense.”

From the partners on the front lines to thepartners at headquarters, everyone at H-E-Bseems in sync with this strategy. pb


Documents

HEB Cover Story PDF