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Ted's CEO: Green movement still growing despite recession

Ted's CEO: Green movement still growing despite recession

George McKerrow Jr. is as passionate about being eco-friendly as he is about the restaurant business itself. McKerrow, who founded LongHorn Steakhouse Inc. and its parent, Rare Hospitality, now owned by Darden Restaurants, is president and chief executive of Ted's Montana Grill, the 55-unit, eco-friendly, classic American dinnerhouse chain that he co-founded in 2002 with his partner, media entrepreneur Ted Turner.  At Ted's, McKerrow has overseen many initiatives that have helped make the Atlanta-based chain a leader in the green-restaurant movement. Recently, he and Turner have taken their show on the road, spreading the gospel of green to other industry members. The two are committed to preserving the environment and showing operators how to be more efficient businessmen, environmentally and economically.

Has the recession affected the green-restaurant movement?

Ithink people are still willing to be involved and willing to realize that there's practicality behind the things that are being done. And while people are still being cautious with those things, they're clearly seeing that there are simple things they can do — from changing light bulbs to recycling trash.

Do you see building costs and prices of green materials going down at all as a result of the recession?

We haven't built a restaurant this year, but we are seeing more technology and more recycled materials being used in building. Demand for environmentally friendly materials is starting to build, so that should lower costs for sure. I don't think people are spending aggressively, but they're not cutting back entirely either.

What about purchasing restaurant equipment?

The cost to replace existing products with energy-efficient equipment isn't any greater, which tells me that prices are either coming down or people are buying more of them. At Ted's, if the equipment is not energy-efficient, we're not even looking at it.

How expensive is it to actually turn a traditional restaurant into a green facility?

That's really tough to say. I'm not trying to duck the question, but it depends on how the restaurant was built in the first place, what materials are already there. Most likely there's a front-end cost of at least 20 percent more, but you get it back in energy usage, sustainability and the entire way you do business. If you're looking to build LEED [Leadership in Energy and Environmental Design-certified], the restaurant will cost significantly more at the onset but will save more throughout the lifetime of the restaurant.

 What is one simple thing an operator can do to be more eco-friendly and save money, too?

At Ted's, after changing the light bulbs, we've saved 3 million kilowatt hours at 10 cents per kilowatt-hour. That's $300,000 in the last 20 months, and the return on investment was seven and a half months. That's what it took for us to pay for the light bulbs. Those are numbers that turn peoples' heads. Of course you have to make an initial investment, but it's not only good for the environment, it's good for the morale of the people who work for you and for your customers. There's the reality of financial savings, too.

 What other eco-friendly changes have you made at Ted's?

 We've installed 17 water-free urinals with a savings of approximately 40,000 gallons of water per unit per year. We are testing now at our South Windsor, Conn., location, a retrofit system for our urinal that converts it to a water-free urinal. The retrofit cost is $350, with a water-saving estimate of 35,000 gallons per year. We will test that for the remainder of the year and, if successful, present it to the executive team for approval of installing at all locations in 2010. Another thing we're doing is putting in bamboo flooring at the same cost we were paying for our hickory wood floors. The installation cost was the same and we're saving on [not having to re-oil] the hickory wood. That was costing us between $200 and $250 a month at each unit. But with bamboo floors you just [clean] with a damp mop. We've also installed four tankless water heaters that have saved us about $1,500 a month each.

 What other green initiatives currently interest you?

I'm charged up. When we build our next round of restaurants, I'd like to look at LEED certification, but I'm even more interested in looking at using geothermal heat and air-conditioning.

What are the biggest reservations you've seen restaurateurs express about going green?

Ithink there's a fallacy there in the thought process that it's extremely expensive to do. Yes, there are certain things that cost more, but there is a balance when you end up saving money. People are leery of change and tend to have preconceived notions.

Are you are making progress in getting the word out about how going green makes business sense?

 We've been doing this for the last couple of years now, and the NRA and the leaders in our industry are doing good, engaging people in conversation about the realities of [being more eco-friendly]. The restaurant industry is relatively fragmented, so we have to continually have conversations internally and externally so everyone will be open to things that ultimately will cause change to happen. Lots of small actions cause big reactions.

What one big advantage of going green would you point out to other operators?

Now, after several years, we can tell them it's not just hocus-pocus; this will give back financial results.

 Why have you decided to go out and spread the word about going green?

What we're trying to do is give people the facts to back up the notion that green is a good idea. It always helps if statistics prove what you're doing.

What is the biggest challenge for energy efficiency?

 We definitely need a new grid. Our system right now is so old. It's going to take years and a tremendous amount of ingenuity and money to change the system in this country, but it can be done. It's happening every day in small steps. On one of the Turner ranches, there will be a solar farm. But we need a new smart grid. Right now, the problem is that where you can generate solar and wind power, is in the middle of nowhere and there's no practical way to carry it over to urban areas, like New York City.

 Last, but not least, are you environmentally friendly at home?

 Absolutely. I've changed out all my light bulbs at home, and my home is built out of enviro-blocks. All of the equipment is energy-efficient, and I also am digging a well this summer. I have a victory garden outside and am looking to convert to geothermal heat when my current HVAC pumps need to be replaced. The message is not to run out and convert everything you have, but if you have something that needs replacing, why not start there and end up saving significant money? A lot of this is a journey, not a destination.

Contact Elissa Elan at [email protected].

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