Supermarkets in southern Florida prepare for the next hurricane.
After a hurricane strikes, households in its wake need to replenish supplies of food, potable water, and ice—and so do their local supermarkets.
With electric utility power unavailable for days or even weeks, supermarket managers face major challenges in trying to reopen for business and meet customer demand. With only enough backup generating capacity to run the cash registers and a few emergency lights, the typical supermarket—like most of its customers—must throw away tons of meat, dairy products, and frozen food.
That’s why two grocery chains in southern Florida—Milam’s Markets and Publix Super Markets Inc., both hard-hit by the disastrous 2005 hurricane season—have made an unprecedented and costly commitment to install total backup generation capacity at many of their stores. The next time a hurricane strikes the region, they hope to avoid losing perishable food at those stores and to reopen for business as soon as the winds subside and their buildings are deemed safe.
Milam’s is a small family-owned chain with four stores, all in Miami-Dade County. Publix is the nation’s largest employee-owned supermarket chain, with 902 stores: 652 in Florida, 167 in Georgia, 38 in South Carolina, 28 in Alabama, and 17 in Tennessee. All of the Florida stores and many of the others are in hurricane-prone locations.
Backup Generation Issues
Despite their difference in size, Milam’s and Publix had to confront the same backup generation issues:
- Will total backup generation be cost-effective? The expense to install, maintain, and operate the equipment must be measured against a potential loss of merchandise and business that seldom or never may be realized at a particular store.
- What brand and model of generator, and what type of fuel, is best for the stores and the company’s budget?
- What’s the best place to install a generator, considering a given store’s site layout, the security of the equipment, and the safety of the surrounding community?
- Does each store have an established support system of fuel and merchandise suppliers, with alternative sources in case the prime suppliers can’t respond to the store’s needs?
- Which employees at each store are responsible for the generator’s operation, what must those key employees know about the generator, and who will train and qualify them?
Exceeding Requirements
Thomas Milam had 10 children and a career in food distribution and wholesaling before founding Milam’s Markets in 1984 with his son Allen. Today, the family business is owned and operated by four of Thomas Milam’s 10 children—Allen, Mike, Max, and Marie.
Each of the Milam’s stores has less than 30,000 square feet, and each previously had a 35-kW or 40-kW generator providing limited alternative energy generation to run emergency lights and cash registers, satisfying both the old and new Miami-Dade County requirements. Two of the four stores recently installed a new 350-kW Katolight D350FPJ4T2 generator powered by a John Deere 6125HF070 diesel engine sitting on a 1,500-gallon tank containing enough fuel to run continuously for three to five days. Reagan Equipment Co. Inc. in Pompano Beach, FL, supplied the new generators. (In April 2007, Katolight, a closely held family business based in Mankato, MN, was acquired by Tognum GmbH of Friedrichshafen, Germany. Tognum is owned by MTU Friedrichshafen GmbH, which also owns MTU Detroit Diesel Inc. in Detroit, MI. Tognum plans to continue using the Katolight brand name in the United States.)
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| Milam’s Markets has installed 35-kW Katolight generators at two of its locations in southern Florida. |
Max Milam says all of his company’s stores face the challenges of developing a plan to prepare for storms: knowing what to order and what not to order; developing a close relationship with providers of ice, fuel, and nonperishable foods so if local suppliers are down they have out-of-town suppliers lined up to help; and—most important—knowing what their customers will need before the storm, immediately afterwards, and later during the recovery period.
“All of this is easier,” he says, “when we have power to operate our stores, avoiding expensive outages and brown-out periods when food that can spoil has to be thrown out. The hurricanes experienced these past several years have necessitated that all retailers take a more proactive approach in providing for emergency generation to meet the needs of the community during periods of extended power outages.”
Neighborhood Stores
Milam’s stores serve four very different neighborhoods. In the Redbird Shopping Center, a strip mall built in 1955 at Southwest 57th Avenue (Red Road) and Southwest 40th Street (Bird Road), just outside the city limits of the upscale Miami suburb of Coral Gables, Milam’s opened its first store in 1984. In April 2007, installation of a diesel generator to run the entire store was completed.
The second Milam’s store, in a standalone 17,558-square-foot building, was constructed in 1962 in the heart of Miami Springs, a working-class community north of Miami International Airport. This store also received a new total backup diesel generator; the installation was completed in October 2006.
The Miami Springs store is a few blocks from the Miami Canal, an artifact of the early 20th-century effort to drain the Everglades. “The canal is not a major problem,” says Brian Haggerty, Reagan Equipment’s regional sales manager. “The generator sits on top of the fuel tank, and is higher than some of the electrical wiring in a major panel inside the store that would go out before the generator if flooding occurred.”
The third Milam’s location occupies space in the Grove Gate Shopping Center on the edge of Miami’s eclectic Coconut Grove community. Milam’s took over this store in 1999 after several other supermarket companies had abandoned it. Milam’s is remodeling and upgrading the store and intends to install a total backup generator there as part of that project, which should be complete during 2008.
The fourth Milam’s store opened in 2001 in a two-story strip shopping center, RK Plaza, built in 1990 in Sunny Isles Beach, FL. The building is in a hurricane evacuation zone that is subject to flooding. “We hope to install a new generator to meet that entire store’s backup power needs in the next two years,” Max Milam says.
Hurricane Planning
Milam’s has an 18-page hurricane preparedness document that includes a five-phase emergency plan and a checklist. “Our employees know their responsibilities,” Milam says. “We meet before every storm and review our plans.”
The firm’s early hurricane preparations begin each May 1, before the start of hurricane season, at the corporate office. Items that must be completed before the season starts on June 1 include:
- preparation of a hurricane order for Associated Grocers, a supplier;
- pre-ordering truckloads of bottled water;
- testing of generators;
- topping off fuel;
- checking employees’ rain gear;
- updating management’s emergency phone list;
- stockpiling enough heavy plastic to cover refrigeration cases;
- verifying that the stores have enough wet-floor signs; and
- reviewing supplies in the hurricane tools supply box.
“When the National Hurricane Center issues a tropical storm warning four to seven days before a storm is expected, we schedule a department managers’ meeting and make sure everyone learns what needs to be done and who should do it,” Milam says. “Other lists are maintained and checked for each subsequent alert level announced by the Hurricane Center.”
This list includes sending hurricane supply boxes to all four stores and canceling frozen-food orders (but not orders for ice).
Inventories in the Miami Springs store’s coolers and freezers are reduced so that, if necessary, it can store inventories from the other stores. Employee phone lists for the stores also are updated, and managers are instructed to schedule refrigeration trucks to hold products in case power goes down.
“After the 2005 storms passed, one of our suppliers sent us refrigerator trucks with ice for our customers,” says Norm Orths, president of retail operations for Milam’s Markets. “We will always be grateful. Ice was a commodity in short supply, and Milam’s customers appreciated that they were able to get it.”
“In 2005 we lost power at two stores following Katrina and at all four stores following Wilma,” says Milam. “Our product loss for all four stores was in excess of $500,000. Nothing like this had happened in Milam’s Markets’ 20 previous years in business. Just like automobile insurance, perishable product loss insurance carries a high deductible, and with two power losses in three months it’s now very difficult to get such insurance. We had to be proactive, even before our insurance renewal, and tell our provider what we are doing to mitigate losses and ensure our doors could reopen as soon as possible after a storm had passed. The year 2005 was very stressful for us as well as our customers. Hurricanes can’t be stopped, but hopefully we can prevent our loss of power and position ourselves to better serve the community.”
Fuel Arrangements
The original generators used by Milam’s were propane-powered, but the new ones run on diesel fuel.
“We chose to go with diesel because diesel generators are more efficient,” Milam says. “Concern for gas interruption due to storm-damaged trees also helped to influence our choice of generator fuel. The areas around our Coconut Grove, Miami Springs, and Redbird stores have heavy tree canopies, and uprooted trees can break gas lines. In 1999, Hurricane Irene, a minimal Category 1 storm, caused our Miami Springs store to be without power for three or four days, and we had a significant loss of perishables.”
Through Reagan Equipment Co. Inc., Milam’s contracted with a supplier of fuel for commercial and industrial clients, Port Consolidated Inc. in Fort Lauderdale, FL, to replenish diesel fuel supplies as needed for the generators’ standby operation and for prime-power operation in the wake of a hurricane.
“We take care of our contract customers first,” says Janet Hoose, general manager of Port Consolidated. “It is important to have a contract in place before a hurricane and avoid the problems of trying to find a source of fuel after the storm. We have the ability to send fuel from all of our plants to where it is needed. First we service emergency rescue and our hospital clients, and then the rest of our contract clients.”
Port Consolidated has bulk plants in Fort Lauderdale, Fort Pierce, Jacksonville, Miami, Tampa, and West Palm Beach, FL. The company receives fuel at three major terminals—Port Everglades in Fort Lauderdale, the Jacksonville Port, and the Port of Tampa—and the smaller fuel terminal at Port Canaveral in Cape Canaveral, FL.
“The Bird Road store has only one electrical feeder, so we designed a system with only one 1,200-amp transfer switch,” says Haggerty. “The Miami Springs store has two electrical feeds, so we designed two transfer switches. One is 800 amps; the other is 1,000 amps. The generators come on automatically once a week and exercise themselves. We provide quarterly maintenance.”
Both new generators were ordered in December 2005. “The total investment for our two new generator systems is about $350,000,” Milam says. “Our Miami Springs generator was supposed to be installed by March of 2006, but the installation wasn’t actually complete until October. Installation at the Redbird store, including inspections, was completed in April 2007. The application and permit process takes a very long time.
“Both of our generators are installed behind high barbed-wire fences, with locked doors and security cameras.”
Publix’s Two Solutions
Publix is meeting the total backup generation challenge with permanent generators at some stores, while at other stores it is installing docking stations to which temporary trailer-mounted generators can be attached.
Publix was founded in 1930 by George W. Jenkins, a Lakeland, FL, grocer. The company grew with Florida’s population during a relatively benign period of hurricane incidence. South Florida was spared major hurricanes for 27 years, from Betsy in 1965 to Andrew in 1992.
Andrew devastated several Publix stores in southern Miami-Dade County, damaged stores elsewhere in the county, and caused widespread power losses.
Publix’s learning curve took another leap following four major 2004 storms—Charley, Frances, Ivan, and Jeanne—which collectively affected stores everywhere in the state except southern Florida. Together those storms cost Publix more than $60 million in perishable-food losses.
In 2005, Mother Nature battered South Florida from August through October with three storms—Katrina and Wilma, both of which struck the South Florida mainland, and Rita, which brushed the Florida Keys en route to a landfall on the Texas-Louisiana border.
These storms collectively affected 227 Florida Publix stores from Key West to Vero Beach. After Hurricane Wilma alone, Publix had to discard more than 1,200 truckloads of food worth several hundred million dollars, the largest single storm loss in the company’s history.
Prompted by these losses and by county and municipal ordinances requiring supermarkets to have total backup power, Publix announced on March 13, 2006, that it planned to install 400 stationary and mobile generators at hurricane-prone stores (including 146 at stores in Broward, Miami-Dade, and Monroe counties). Another 175 stores in areas with lower hurricane probability (primarily on Florida’s southeast and southwest coasts, the Florida panhandle, coastal Georgia, and South Carolina) will receive quick-connect docking stations. These stores serve some 575 communities.
Publix said it expected to complete the installations by July 2007 at a cost of about $100 million.
The permanent generators are 500-kW Caterpillar units obtained through PowerSecure in Wake Forest, NC, a provider of interactive distributed generation products and services. The diesel generators have automated turn-on sensors and come with double-lined 1,000-gallon fuel tanks. The trailer-mounted mobile generators have self-contained double-lined 860-gallon diesel fuel tanks.
Typical Publix Installations
Publix’s permanent generators typically are installed close to the store buildings, protected by bollards and security cameras, but they are not fenced and can be easily approached.
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| Publix Super Markets is using 500-kW Caterpillar generators for backup power at many of its stores. |
At Publix’s South Miami store (which actually is in Coral Gables), the generator is in the parking lot, with connections between the generator and the store buried in the ground under fresh blacktop.
At a Publix on Southwest 27th Avenue in Miami, the generator is in the loading dock area, separated from the store by a large cardboard baling machine. A concrete wall shields the area from adjoining homes, but it is open to and visible from the parking lot behind the store.
Other Publix stores have installed generators in their product delivery areas, or used other available space, sometimes out of public view.
One Publix store that doesn’t yet have a generator is on LeJeune Road in downtown Coral Gables. It won’t get one until a planned remodeling is complete, which could take years due to stringent local building and zoning requirements. Space at the rear of this store is limited, so it most likely will require a docking station rather than a permanent generator installation.