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KKR ESG & Citizenship Report

Eco-Efficiency: US Foods

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Improving Facility and Fleet Efficiency

Key Environmental Performance Areas:

  • Greenhouse Gas Emissions (Facilities)
  • Greenhouse Gas Emissions (Fleet)

Avoided $50.4 million in electricity costs through improvement in its distribution centers since 2008.

Avoided $52.5 million in fuel costs through improved performance of its distribution fleet since 2007.

Monitors and manages driving practices, such as idle time, to improve efficiency of its fleet.

All data and information in this case study are as of December 31, 2015, unless otherwise noted.

Challenge

Storing and distributing food and food products to customers throughout the United States requires a significant system of distribution centers and distribution vehicles. Many food products must be maintained at specific temperatures, requiring 24-hour cooling in warehouses and on delivery trucks, both of which have a considerable energy demand and associated greenhouse gas emissions.i Therefore, managing energy and fuel use during these operations is a key issue for foodservice distributors.

US Foods is the second-largest broadline foodservice distributor in the United States, providing food and related products to independent restaurants, healthcare and hospitality customers, educational institutions and prominent multi-unit restaurant companies.

Response — Greenhouse Gas Emissions (Facilities)

US Foods is committed to raising the bar in foodservice by developing more efficient facilities wherever possible and has demonstrated this by achieving a LEED Silver designation for its Austin, Texas, distribution center and by pursuing a similar designation at its new facilities in Jackson, Mississippi, and Seabrook, New Hampshire.

In 2015, US Foods continued improving the energy efficiency of its distribution centers by implementing or continuing a number of practices, including:

  • Developed an energy auditing approach to identify future energy efficiency improvement opportunities.
  • Began replacing current R-22 refrigerant units with R-407, which will reduce related emissions.
  • Continued transitioning to more efficient batteries and chargers for lift equipment.
  • Continued installing efficient lighting and refrigeration in new facilities.

Results — Greenhouse Gas Emissions (Facilities)ii

Since 2008, absolute greenhouse gas (GHG) emissions from distribution centers have increased by almost 8 percent, primarily due to the addition of 20 facilities to the data scope starting in 2013. Meanwhile efficiency has improved by approximately 22 percent (GHGs/square foot) against a 2008 baseline. The improvement in efficiency helped US Foods to avoid almost $50.4 million in electricity costs and approximately 274,200 metric tons of GHG emissions since 2008.

US Foods — Distribution Center GHG Efficiency (2008 Baseline)
ESTIMATED RESULTS 2009 2010 2011 2012 2013 2014 2015 TOTAL
Avoided GHGs (metric tons) 24,900 25,800 31,400 33,000 51,300 52,200 55,700 274,200
Avoided costs $4.6 $4.6 $5.3 $5.9 $9.1 $9.7 $11.0 $50.4

Response — Greenhouse Gas Emissions (Fleet)

US Foods operates one of the largest private trucking fleets in the country and continues to reduce the environmental impact of its operations by investing in infrastructure, technology, and protocols that help reduce vehicle emissions.

In 2015, US Foods improved delivery fleet efficiency through a number of practices, including:

  • Continued right-sizing vehicles to use the most efficient vehicle, such as Class 7 trucks or sprint vans, for each type of route.
  • Continued focusing on driver behavior through a scorecard system and driver coaching.

Results — Greenhouse Gas Emissions (Fleet)iii

In absolute terms, GHG emissions from US Food’s distribution fleet decreased by approximately 9 percent, compared to 2007, while efficiency improved by approximately 5 percent (GHGs/ton of product moved) over the same time period. The improvement in efficiency helped US Foods avoid approximately $52.2 million in fuel costs and almost 169,000 metric tons of GHG emissions since 2007.

US Foods — Fleet GHG Efficiency (2007 Baseline)
ESTIMATED RESULTS 2008 2009 2010 2011 2012 2013 2014 2015 TOTAL
Avoided GHGs (metric tons) 20,000 18,600 19,900 19,900 19,700 24,600 23,700 27,600 27,600
Avoided costs $7.3 $5.2 $4.6 $4.1 $6.0 $8.7 $8.2 $8.3 $52.4

US Foods has participated in KKR’s green program since 2008 and is communicating results in the eco-efficiency category for the sixth time. For more information on US Foods’ commitment to corporate responsibility, please visit its Corporate Citizenship program website.

i Hernandez, Jorge. "Foodservice Distribution: Maintaining the Cold Chain." FoodSafety Magazine. 2009. Web. 25 July 2016.

ii Self-reported portfolio company data is not calculated, reviewed or independently verified by KKR or KKR Capstone. For more information regarding the results methodology for companies evaluating their own data, please see the methodology section. There is no guarantee that any GSP-related avoided costs or added efficiencies will positively impact the portfolio company’s valuation or performance.

iii Reported results are based upon data provided by the portfolio company, and have not been reviewed or independently verified by KKR or KKR Capstone. KKR may calculate the figures presented in an effort to ensure calculation methodologies are consistently applied across companies in the Eco-Efficiency category. For more information regarding KKR’s calculations, please see the methodology section. There is no guarantee that any GSP-related avoided costs or added efficiencies will positively impact the portfolio company’s valuation or performance.

Unless otherwise noted, portfolio company data represents 2016 results, published in October 2017. These case studies may contain forward looking statements including descriptions of planned projects and projected results and savings. These statements are subject to the risk that the projects will not develop as planned or at all or that projected results and savings are not realized.