"From 'Convenience' to 'Co-Growing'" (FamilyMart Co., Ltd.)

JFS Newsletter No.37 (September 2005)
"TOWARD A SUSTAINABLE JAPAN - CORPORATIONS AT WORK" ARTICLE SERIES Article No. 30
http://www.family.co.jp/english/index.html

A convenience store--familiar and convenient

Convenience stores have proliferated all over Japan during the past 30 years, and today meet a variety of needs for busy modern consumers. They can buy box lunches and tea on the way to work. And even after the post office and large businesses have closed for the day, customers can send parcels, pay utility bills and insurance premiums, withdraw cash from automatic teller machines, and make reservations for weekend concerts and movies.

FamilyMart Co. is a major convenience-store chain in Japan with 6,500 stores in the country and 5,300 stores overseas. It plans to grow to 20,000 stores worldwide by 2008. A typical store in the chain has a floor space of about 120 square meters, carries some 2,800 stock items, such as foods and drinks, magazines and daily-use items, and is open 24 hours a day. Stores are operated under a franchise system, usually run by a store manager and a spouse, together with 15 to 20 employees working in rotation.

At these convenience stores, customers can find anything they need, but certain issues inevitably come with the pursuit of convenience; for example, waste from packaging and unsold food, and the use of electricity 24 hours a day.

From 'convenience' to 'co-growing'

FamilyMart is trying to depart from the image of being simply convenient and near to consumers. It upholds a corporate vision of "aspiring to be an indispensable and 'co-growing' company, offering a sense of abundance and friendliness to all customers." (Co-growing is meant in the sense of building mutually beneficial relationships.)

How can the company go beyond simply selling products, and contribute to society by making use of its nationwide network of stores that operate 24 hours a day? Based on this awareness, FamilyMart has started some initiatives to make it a chain of environmentally friendly convenience stores that serve as an important venue in their communities.

One of the initiatives is to be a community "safe station," offering a place of safety and security. For example, on a day-to-day basis, stores can serve as place for people to report emergencies, and can offer a refuge where people can run when in danger. When disasters like earthquakes happen, the stores can work as an essential lifeline that supplies daily necessities by utilizing the store chain's extensive network. The stores can also work as communication centers for disaster victims and displaced people. In addition, the network of 6,500 stores nationwide can start fundraising immediately after receiving notice by e-mail from the company headquarters. These are examples of the strengths of a company that has a nationwide information system network and is firmly planted in local communities.

In October 2004, after the Niigata-Chuetsu earthquake that affected many victims in Japan, the company's merchandise procurement and distribution functions were fully utilized to send relief supplies and to collect donations at its stores around the country. In December that same year, when a tsunami caused devastation after the massive Sumatran earthquake, FamilyMart in Thailand set up an emergency-response headquarters, and served as a lifeline to provide needed items. The company implemented special deliveries to ensure that the stores did not run out of supplies. It kept open its eight stores on Phuket Island that, miraculously, had remained intact, and continued to supply goods to local residents and tourists.

Delivering social messages

The company is also transmitting a variety of information with social messages through its stores nationwide. For example, the company works with Save the Children, a nongovernmental organization dedicated to work for children's rights in the world, by collecting contributions at stores. "We would like to continue this collaboration by sending out social messages," says Akira Takahashi who works at the company's Social and Environmental Promotion Department.

In these ways, in normal times and in emergencies, FamilyMart offers an infrastructure that contributes to the security and safety of communities. The company also embraces social campaigns using its nationwide store network. These are the initiatives of the company on the social front with the aim of "co-growing"--to be an essential partner for customers.

Environmentally conscious convenience store

A big environmental challenge the company faces is to become an environmentally conscious convenience store. The company's social and environmental report states that "FamilyMart believes that realizing a society that can permanently coexist with the global environment is the vision for an environmentally conscious convenience store of the 21st century."

How much environmental impact do the stores have? The report says the average annual consumption per store is 180,000 kWh of electricity, 360 cubic meters of water, and 662 litters of cooking oil. The average emissions per store includes 4.5 tons of food waste, 8 tons of burnable waste, and 1.5 tons of plastic waste, in addition to the fuel use and exhaust emissions from the transport of products. Compared with an average family of four people, the average store's electricity use is equivalent to that of about 40 households (at 4,000 kWh/household) and the food waste generation is equivalent of more than 150 households (at 25 kg/ household).

To become a more eco-friendly convenience store operator, FamilyMart first tackled electricity consumption. Because stores operate around the clock, much electricity is used for lighting. To help reduce this consumption, the stores adopted detailed measures of adjusting lighting to the levels required in each of five zones in stores. For example, magazine zones take advantage of daylight from outside, so the fluorescent lights installed above them can be less bright than in other zones.

In fiscal year 2004, FamilyMart became first in the industry to introduce white light-emitting diodes (LEDs) for their sign boards, a new lighting method that is extremely energy-efficient. Mr. Takahashi says, "Although initial installation cost is higher than conventional equipment, electricity consumption is cut to less than half. We are considering gradually introducing these signboards in all our stores." Moreover, the company adopted an "integrated heat-utilization system" that combines the functions of air conditioning, cooling, and refrigeration, in order to reduce electricity consumption.

And how about product logistics? The company has been using delivery trucks fueled by compressed natural gas (CNG) for some time, but was facing problems such as inadequate numbers of refueling stations and the short distance that could be traveled between fill-ups. It was the first in the industry to experiment with hybrid gas-electric trucks that could solve such problems. After reviewing the results, the company decided to replace its entire fleet with hybrid vehicles.

What about recycling of resources? Specialized dealers have been contracted to collect waste cooking oil (used for cooking deep-fried food) for recycling into livestock feed and other materials. FamilyMart now has about 5,500 collection points for waste cooking oil, the largest number in Japan for a single company. Furthermore, it has introduced a system to collect food items that have passed their freshness date, and recycles this food waste into fertilizer and feed. Currently, about 600 stores are part of this system, and coverage area will be expanded in the future.

FamilyMart is ahead of the industry in introducing various schemes, but the company sees its transformation into an eco-friendly convenience store operator as having only just begun. Future challenges will include the monitoring and reduction of CO2 emissions at all stores in the chain. While the company is working to introduce eco-friendly containers and packaging, a switch to completely biodegradable materials is yet to happen. In the meantime, the company is pursuing this goal by finding solutions to safety and reliability concerns about these materials.

Through its stores, the company hopes to offer staging points in local communities for a sustainable society, and serve as a disseminator for initiatives with social dimensions and for green lifestyles. It will be interesting to see what FamilyMart can do in the future, as it aspires to become an indispensable "co-growing" partner nearest to the hearts of customers.