Cutting Carbon Across a Brand with Stop & Shop’s Jihad Rizkallah

June 21, 2013

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so excited and honored to have with us on the line Jihad Rizkallah. He’s the Vice President for Responsible Retailing at Ahold USA, which is the parent company of Stop & Shop Supermarkets. Welcome to Green is Good, Jihad. How are you today? JIHAD RIZKALLAH: Very good, John. Thank you for having me. JOHN SHEGERIAN: Hey, Jihad, we’re so happy you’re here because this is such an important topic what you’re doing in terms of greening the retail world, greening the supermarket world. But before we go into it, you have a bio that literally would take up the whole show if I was to sit here and read it. It is so impressive on where you’ve been, how you’ve gotten to where you are today. Your journey is so fascinating. Could you share with our listeners a little bit your journey and how you became who you are today? JIHAD RIZKALLAH: Oh, thank you. Thank you, John. Thank you for the kind words. Absolutely. Well, I grew up in Lebanon until I turned 21. I moved to this country basically to finish my studies. Then, as my bio indicated, I’m a graduate of Wentworth Institute of Technology. I got a Bachelor’s degree in Architectural Engineering, and then I went on to get my Master’s degree in Engineering Management from Tufts University. I started my career in store planning, which was related to architectural engineering, at Brigham’s Ice Cream and restaurants in Arlington, Massachusetts. Two years later, I joined the Stop & Shop supermarket company, and I went through different positions, from construction to engineering to design to store planning. Last but not least, a year ago I had the opportunity to change careers into something that I honestly love as much as I love the design and engineering, which is responsible retailing for us at Ahold USA, but also known to the rest of the world as corporate and social responsibility. The shift – some people say, “What is an architectural engineer doing in corporate responsibility?” A few years back, back in ’07, I got involved in energy conservation and I led the team that was assigned to reduce our carbon footprint by 20% by the year 2015, based on 2008. That basically was an Ahold global initiative and commitment. So, as I got involved in energy conservation and sustainability, I grew, in all honesty, to love the field in addition to what I was doing in engineering. So, as we implemented more and more initiatives and as we saw the results of our work and hard work, we have a team of dedicated folks who have nothing to do but to implement energy conservation across our fleet of 758 stores, and look at technology to make sure that we are basically amongst those who are best in class in sustainability in the retail world. So that’s in a nutshell, I hope wasn’t too long and wasn’t too short. That summarizes it. JOHN SHEGERIAN: No, it’s perfect because there are so many young people out there that listen to our show across the United States and across the world that want to become the next Jihad Rizkallah and want to follow in the footsteps and help change the world, so that’s why it’s so important that our guests share their journey from their perspective. That’s so helpful. So, let’s talk about what you’re doing here and the role of supermarkets with regards to climate change. What is the real role here? You’ve got 758 stores. How do supermarkets fit into this whole equation with regards to climate change and what’s going on with the whole sustainability revolution? JIHAD RIZKALLAH: Well, for us and for the Ahold retail divisions, John, it is an exciting time because we have committed to, as part of our responsible retailing commitment, we have committed to be a better neighbor. What a better neighbor means to us, the promise of better neighbor, means that one of the promises is that we care for the environment. What it means is, as I mentioned earlier, a continuous commitment and dedication to looking at implementing and implementing environmentally friendly solutions in our operations in order to achieve our goals, which I referenced earlier, which is reducing our carbon footprint by 20% by the year 2015. JOHN SHEGERIAN: Got it. I hadn’t heard this before I had the chance to speak with you today. What does it really mean to you, the term responsible retailer, and why is it important for your company to be a responsible retailer? JIHAD RIZKALLAH: Well, responsible retailing means – it underpins our vision. It’s our values and our strategy to create and accelerate growth. It helps us deliver value to our customers and other stakeholders, customers and associates, because we strongly believe that our associates play a big role in our big plan, in our big commitment. They are at the forefront of dealing with our customers and taking everything that we believe in and making it happen at store level, making it happen with the customers who are part of our community and we are part of the community because that’s where our associates come from, our customers come from, and we want to be that good community member. At the end of the day, it’s something that we strongly believe and that is the right thing to do. JOHN SHEGERIAN: Got it. Got it. It’s one thing for you to really enjoy this or some of your other leadership members at Stop & Shop. But then how do you make it a cultural and DNA opportunity with regards to the Ahold brand and the Stop & Shop Supermarkets. How do you drive this? How does management continue to show their support for responsible retailing and then translate it to all the employees at all of the stores? JIHAD RIZKALLAH: Well, one of the things that we’re trying to do, John, and it’s a great question actually, is we wouldn’t have been able to do it without a strong commitment from our executive leadership. What we’re trying to do is to embed all what we believe in into the business, embed it into everyday practices, and that’s why this year we’ve introduced, as part of our responsible retailing commitment, three promises. The first promise is to make us a better place to work, make us a better place to shop, and make us a better neighbor. So, it’s a strong commitment from the top leadership all the way down to associates at store level. Now, I’m not saying that it is easy. I’m not saying it’s all behind us, John. I’m not saying it’s all, as they say, fait accompli; it isn’t yet. It’s work in progress and it’s hard work. It doesn’t happen overnight to take all these initiatives and great thoughts and flip a switch and suddenly you are a sustainable, responsible company. It’s a lot of hard work, and again, we’re making progress every day. One of our great slogans, actually, is all these promises to make us better every day. As days go by, we will get better by basically the commitment and dedication that we get from our associates and, quite frankly, our customers also have to be engaged. Our customers hopefully one of these days, sooner than later, will be our great supporters also. Many of them have. I have seen, and continue to see, a lot of the great things that we’re doing, and we will, in the very near future, start engaging more of our associates and customers. Up until now we have been, quite frankly, very shy at telling our story and very shy at telling our customers and our associates about all the good things that we’ve been doing because it wasn’t part of our culture, meaning we’ve been doing it because we’ve been doing it and because we believed in it. JOHN SHEGERIAN: Rizkallah, you know, I see guys like you and me and leadership companies like the Ahold brand and Stop & Shop as the sustainability immigrants of our times. We’re the first ones in the United States really getting involved. Our children, our grandchildren, will become the sustainability and environmental natives because they’re going to have a lot more experience behind them and they’re going to grow up in this society that’s going to be culturally really more part of the culture and DNA than what we grew up in. So, my question to you is who do you look at for inspiration, since we’re the first line here, since your company is really one of the first line movers in this as a supermarket chain? What other retailers or food companies are doing it right that you draw inspiration on or you like their paradigm, that you are drawing some new ideas from to implement at your great chain? JIHAD RIZKALLAH: Great question, John. We’re not the first, and I hope that we’re not going to be the last either. I mean, our industry, there are a lot of industry retailers that are doing good just like we are, although albeit at different commitments or levels of commitment and different success, so to speak. But in general, I think across the board in the U.S., you’ve got a lot of big names, folks such as Walmart is doing good stuff, Whole Foods. Across the ocean, you’ve got Marks & Spencer in the UK that’s also doing a great job; they have part of their CSR program something that says, “Plan A because there’s no Plan B.” You know, basically they’re saying, “You know what? You have to do this. You’ve got no choice, so to speak.” Another example is Ben & Jerry’s. Their mission statement is built on sustainable corporate concept of laying prosperity across their social mission, product mission, and economic mission. Their focus is on children and families, the environment. I mean, we share those values with these companies. Our commitment, again, of being a better a neighbor is caring for our communities by supporting all the causes, food banks, fighting hunger, child obesity, providing healthy choices for our associates and our customers, caring through the environment through all the initiatives that I mentioned earlier, and also last but not least is being socially responsible and sourcing our products responsibly. There are a lot of values being shared amongst these companies, including ours. JOHN SHEGERIAN: Great. And we’re going to get some of those. For our listeners that just joined us, we have a fantastic guest on the line with us right now. We have Jihad Rizkallah, and he’s with Stop & Shop. If you want to read more about the great things that Stop & Shop is doing, I’m on their website right now. It’s www.stopandshop.com. I’m on their recycling and environment space on their website. You know, Rizkallah, talk a little bit about carbon footprint and the bold plans that you have to reduce the carbon footprint by 20% by 2015 for Stop & Shop, for your 758 stores. How are you going to execute that, and what are the steps you’ve taken in that direction already? JIHAD RIZKALLAH: John, our journey started back actually long before we made the commitment to reduce our carbon footprint. Back in 1999-2000, we had a partnership with the Rocky Mountain Institute, also known as the RMI, and they were and still are the country’s leading team on sustainability and green practices. We partnered with them at the time to develop what we called back then “the less store,” or low-energy superstore. The design back then called for that particular store to be 35% more energy-efficient than the store that it was replacing, the older design, so to speak. So, the store was developed and built in Foxboro, Massachusetts and opened back on November 8, 2001. Since then, we have taken all the energy-efficient designs and implemented them in every new store that we’ve built since. We’ve also taken part of those technologies and implemented them in what we call our remodel program, so every store that got remodeled back then. That’s how we’ve taken some of those sustainable and energy-efficient initiatives and put them into our stores. So, in reality, also we’ve got a holistic approach to reducing our carbon footprint. We’ve got investments in energy conservation every year now for the last few years we’ve averaged maybe $13-14 million at what we call energy conservation initiatives that get implemented into the existing fleet. Added to that are what we do as part of that is lighting, retrofit, energy management system, commissioning, we install energy-efficient motors in all of our refrigeration and walk-in coolers. We also have a commitment to build all of our new stores to be LEED-certified, and also have committed to investing into renewable energy. We have one fuel cell in place already in one of our Stop & Shops in Connecticut, in East Torrington, to be exact, and we also have invested in installing 30 solar systems on the roof of 30 of our stores, and we’ve got currently six under construction, so we’ll have a total of 36 plus 5 that were existing, so 41 stores by the end of this year that will draw on average 8-9% of their electricity demand from the sun. JOHN SHEGERIAN: And using all different types of methodologies, as you say. JIHAD RIZKALLAH: Yes. And, you know, again, we also have in addition to that, there is another issue that we address as a supermarket company that is not common to other retailers, John, is refrigerant. We have invested into installing leak detectors on our refrigerant systems, so that way we can get to the refrigerant leaks quicker because refrigerants do contribute to greenhouse gas emissions and global warming. We’re in the process of testing different technologies, and hopefully sooner than later we’ll be testing what they call natural refrigerant, which is the ultimate refrigerant to be used because it’s friendly to the environment, and if and when it leaks, the net contribution to global warming is zero. So, again, as I mentioned, a comprehensive approach. JOHN SHEGERIAN: Rizkallah, I want to ask you where we’re speaking from today, I’m in New York and you’re in Massachusetts, talk a little bit about your partnership with the Environmental League of Massachusetts, and how does that partnership work and meet your goals? JIHAD RIZKALLAH: We are on the Corporate Counsel Board of the Environmental League of Massachusetts. The ELM and Stop & Shop and Ahold USA share the same values. The environment is their main concern, and the environment is one our main concerns, so our values are the same. The ELM looks out for those similar to us, they bring businesses together to promote the environmental causes. They support the same causes that we do. They bring to us the latest legislations that impact our business, and they take to the legislation our concerns when it comes to bills and/or legislation work that has an impact on the businesses that are trying on their own to support the environmental causes around the state of Massachusetts. So, there are common values, common goals, and they’re great partners for the businesses in Massachusetts that are promoting that. JOHN SHEGERIAN: Hey, you know, like I told our listeners earlier, I’m on your great website now, www.stopandshop.com, and I clicked onto the recycling and environment portion, and I’m just fascinated by all the things you’re working on, Rizkallah, and your great brand is working on. Talk a little bit about, besides carbon footprint reduction, which we now know you’re doing in so many different ways, talk a little bit about the other programs you’re working on. Some of these that I see on this great page with regards to transportation and reusable bags and recycling initiatives and things of that such. JIHAD RIZKALLAH: Alright. That’s a loaded question, John, but I’ll be happy to answer it. In addition to the carbon footprint as I’ve mentioned, we’ve got other initiatives that are underway. We’ve got a great community engagement program and dedicated to helping children. We support health clinics across the 13 states where we operate from, Dana Farber to the Children for Miracle Network hospitals, Johns Hopkins I believe also, Sloan-Kettering in New York. We support the fighting hunger initiatives across all of the states and the communities where we operate. We work closely with food banks. We are also committed to building healthy communities, so this past year we’ve announced a three-year plan to raise $9 million for our family foundation program to reduce childhood hunger. So, that’s a big target for us, big goal, because we strongly believe in it. In addition to the community engagement efforts and fighting hunger, we also, as you mentioned, we have a very aggressive waste reduction goal that basically calls for us to be at zero waste by 2020, and that means that zero waste is not actually zero waste; it’s diverting 90% of your waste out of the landfill. So, for that, we’ve got so many initiatives underway. Currently we recycle cardboard, we recycle plastics, we recycle organic waste that now is diverted also from the landfill. It goes into animal feed or composting. We also have an initiative that we announced last year which is to reduce the use of plastic bags in our stores by a billion bags by the year 2015. JOHN SHEGERIAN: It’s just amazing. For our listeners out there that want to learn more, they just got to go to your great website and see all these great things you’re working on. I just want to squeeze in a couple more questions here, because we’re last down to the last three minutes or so, and you’re such an amazing guest and you’re doing so many great things, touching so much. You touched on it earlier, but I want to hear one more time. Explain to our listeners how Stop & Shop is also making it easier for your great clients and customers to choose healthier or more sustainable products. JIHAD RIZKALLAH: Thank you, John. Another great subject too. For that, we have also numerous steps and initiatives in place. Recently, we introduced a sustainable choice logo for products that we consider safe, sustainable, and also produced responsibly. The first category that applies to that is seafood, and the plan is to roll this program over to other products such as coffee, tea, and others. What it means, basically, sustainable choice at least for seafood, it means that the fish has been responsibly farmed and/or fished. In addition to that, we do have health and wellness education programs throughout the year, whereby we have what we call healthy store tours. We take kids on a store tour to promote healthy foods, healthy ideas, healthy eating habits, and better hygiene, because we believe that, as you mentioned earlier about our future generation, we believe that if we educate our kids now on healthy practices, I think it’s one of our great investments to the next generation as they grow to be healthy. We have a shelf bags program that helps customers identify healthy idea products across the store, be it our own brands and/or national brands. It’s a logo that tells our customers that this product is healthy. We also have healthy idea magazines that your listeners should be able to find that on our website. So, we have a wide spectrum of initiatives that are in place, John, that would help promote that. JOHN SHEGERIAN: Perfect. We’re down to the last minute or so, and I just want to ask as we sign off, any personal green things that you that you want to share with our listeners as you inspire them as we say goodbye? JIHAD RIZKALLAH: Yes. Thank you. You know, as they say, I have to walk the talk, so to speak. I can’t be promoting health and these initiatives and not practice them or not be a believer in them. So, personally, we’re very big in my household in recycling. What I do for the company I do at home, recycling cardboard and plastic and bottles and newspaper, and I also encourage our customers and our listeners to do that. It becomes part of your daily chores, so to speak. One of the things that we’ve been pushing and I started doing at home lately, believe it or not, is also as part of our commitment to reduce plastic bags, why don’t we use reusable bags when we go grocery shopping? I think it’s the best thing that we could do to the environment. It may be a modest step, but collectively, it becomes elite for all of us to reduce the amount of plastic bags that we use. One of the things that I do at home also is something that I implement for the company is energy conservation. All of the lighting in my house is compact fluorescent lamps. Lately, I’ve switched at least the kitchen to LED lighting because it’s the next generation of energy-efficient lighting. The kitchen and the living room are basically where most of us spend our time, so I encourage our listeners and our customers to look at these technologies. Last but not least, one of the things that may be somewhat of a new idea, maybe not, but let’s look at reducing our food waste at home. I have three grown boys, and so we’re a family of five, and one of the things that I discussed with my wife a couple weeks ago is when I noticed that we had maybe three or four garbage bags on a weekly basis, when I look around my neighborhood and I see two for most households. I’m saying there’s something wrong in this. We need to get to the bottom of this. Why are we generating so much waste? One of the things that we looked at is meals. I encourage folks to think about the size of the meal that they cook on a daily basis. If we have a household of two, maybe we should cook for two and not three or four. I mean, I come from a big family, and we’re always used to cooking for seven or eight people thinking that somebody is going to stop by one day or today and have lunch or dinner with us, so we’re always thinking of… JOHN SHEGERIAN: Bigger is better. JIHAD RIZKALLAH: Yeah. So, I encourage folks to just cook the right-sized meal. JOHN SHEGERIAN: I love it. Jihad, you’re the best. What a great interview. You’re always welcome back. For our listeners out there to learn more about what he’s doing at Stop & Shop, go to stopandshop.com. Jihad Rizkallah, you are a responsible retailing leader and truly living proof that green is good. JIHAD RIZKALLAH: Thank you very much. JOHN SHEGERIAN: Thank you.