At Pepperidge Farm, diverse strategies yield results

October 26, 2005
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"Nobody has ever liked the price of energy, but now we are really trying to do something about it," says Tom Rieth, manager of infrastructure in environmental engineering for Pepperidge Farm, Inc. The company's strategy for managing energy breaks down into two major initiatives. The first initiative targets usage reduction for both purchased electricity and natural gas. The second initiative aims to drive down per unit energy costs which have been rising rapidly.



Pepperidge Farm's energy program is decentralized. "The plants themselves come up with ideas," says Rieth. The corporate office reviews plant energy data monthly, as well as energy initiatives at each plant, and will assist as needed with more complex energy related projects. Corporate also has a monthly conference call with plants concerning energy. "We try to get everybody involved, whether they are an operator, an engineer in the plant, or an accountant. Energy has always had a high priority because it was accounted as a cost of the plant. Now the priority is a lot higher and energy gets more recognition first because the price is going up and also because we can do something about it."

Pepperidge Farm takes a careful look at opportunities for electric cogeneration. None of its eight US plants now generate any of their own electricity, but that may change soon. Its Bloomfield, CT plant is installing an experimental fuel cell generation system. The company is also considering other combined heat and power technologies such as micro-turbines. The fuel cell project had sponsorship by the state of Connecticut and Rieth keeps a close eye out for incentives provided by government for saving energy. The company is actively reviewing the recently passed US national energy bill in order to understand the impact of new tax credits on Pepperidge Farm's energy-related future investments. A combination of both rising energy prices and new tax credits may improve the return on some energy-saving investments to the point where they pass Pepperidge Farm's corporate ROI requirements.

Pepperidge Farm wants to reduce its energy consumption by 20 percent over the next 10 years as well as drive down the out-of-pocket costs of the energy it does use. Energy projects are evaluated using the same financial requirements as all other capital projects. "We don't do anything special for energy projects," says Rieth, "but we find that a lot of energy projects are passing our internal ROI hurdle. A lot of these involve new ways of doing things such as better utilizing waste heat." The new cogeneration capacity will help, but to reach their goal Rieth and Pepperidge Farm will have to adopt many more new ways of doing things.

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