IGA Market Central opts for CO₂ transcritical

Conscious of the HFC phasedown and the importance of energy efficiency to a food retailer’s bottom line, Petar Lujic, owner of IGA Market Central, opted for a CO₂ transcritical HVAC&R system in the new supermarket to secure his business for the future and gain a competitive advantage. Accelerate Australia & NZ reports.

Lujic is the CEO of Kamen Group, a business involved in the development of supermarkets, liquor outlets, hotel accommodation and other various types of property.

With over 25 years of experience in various segments of the retail industry, Lujic established the Kamen Group in 2012 and entered Australia’s independent retail sector, opening IGA Market Central at Wentworth Point, western Sydney, in November 2017.

Independent Grocers of Australia (IGA) is an Australian chain of supermarkets. Metcash owns IGA itself, but individual IGA stores are independently owned. The Kamen Group owns the IGA store at Wentworth Point.

As an independent retailer, Lujic's decision to use natural refrigerants at the IGA store is instructive and inspiring to others. Though thoroughly experienced in the retail and property development industry, Lujic's knowledge of refrigeration technology was limited at the outset of his work on IGA Market Central.

Starting nearly from scratch, Lujic learned about the current state of HVAC&R technology, its impact on the environment and ultimately its future impact on his business.

This resulted in an opportunity to future-proof his business – with the help of trusted partners – while at the same time reducing the energy consumption of the HVAC&R side of his business.

Competitive advantage

For any small and medium-sized enterprise, seizing any competitive advantage over larger-sized companies is crucial for business success. Using natural refrigerants is one of the ways to do so – and Lujic found it.

"It's simple. Being a small player in the pack here, as we've tried to expand, what we've tried to look at is to say, ‘well, we can't compete with the size and what not. But what we need to do is to try and be smarter about the way we not only operate our existing business, but to try and expand our business where possible’," Lujic said.

Phasing out HFCs

His journey began by identifying what is traditionally the largest portion of a food retailer's operating costs: the refrigeration system.

Lujic, by his own admission, has little technical knowledge with respect to refrigeration systems. As he conducted his own research, however, he found that certain types of refrigerant gases were going to be phased out, possibly exposing his business to the risk of costly equipment replacement in the near future.

On 1 January 2018, the Australian government began implementing a phase down of HFCs under its Ozone Protection and Synthetic Greenhouse Gas Management (OPSGGM) programme. As Lujic looked into the phasedown, it became clear that there was an opportunity to be gained from selecting a CO ₂ transcritical system for the Wentworth Point store.

"There's no crystal ball obviously," Lujic stated, "but I think ultimately it’s about how much you can invest today to offset for the future".

For businesses that are heavy users of refrigeration in Australia, the cost of HFC-based systems will inevitably rise over the next several decades as supplies become scarcer.

For the IGA Market Central store, finding the right partner was key for Lujic, who could only dedicate limited resources to the implementation, management, and maintenance of new technology.

"In this instance, it was Baker Refrigeration," said Lujic, referencing Perth-based installation contractor AJ Baker & Sons Pty Ltd. The company has been very active with natural refrigerant system installations in Australia over the past few years, especially with transcritical CO ₂ systems.

"They have assisted us and guided us to give us the direction of where we should go and how we should approach this."

In November 2017, the IGA Market Central store opened at Wentworth Point. One transcritical CO₂ rack system provides the refrigeration and freezing needs for the entire 1,460m² of store trading area.

Lujic is proud of the installation and encourages his staff to communicate this pride in harnessing natural refrigerants to customers as much as possible.

"Natural refrigerants are being used across the whole store," Lujic said in an interview conducted at ATMOsphere Australia.

"For every component of refrigeration, from back of house to front of house in our signature pieces like the delicatessen, we are encouraging our staff not only to reinforce the message but also to educate the customer that we are doing the right thing for the environment by making sure that we implement and execute the delivery of natural refrigerants," he said.

However, Lujic reflects, continuing changes in external circumstances are inevitable.

"The reality is that there's always going to be constraints, changes of government, and there probably will be a reintroduction of a carbon tax at some point," he said.

"The only way to try and counter attack that is to be proactive and do what we've done. That's why we've gone down the path of natural refrigerants."

"It means that we can focus far more on running our business as opposed to worrying about the efficiency or replacing the equipment and changing refrigerants. That's it."

Click here to read the full version of this story in the winter 2018 edition of Accelerate Australia & NZ magazine.