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Balancing costs and energy efficiency in the Food and Drink Sector

Every business faces the challenge of balancing the three separate elements that make up the so-called ‘Energy Trilemma’; the need for energy to be cost-effective, reliable and sustainable. This is particularly pronounced for energy-intensive sectors such as manufacturing, and many of the issues that arise surrounding the energy trilemma are particularly pronounced in the food and drink industry.

Energy Affordability

Figures from the Office for National Statistics showed that the UK’s food and drink industry has been more significantly impacted by rising energy and raw material costs than any other sector. During a survey earlier this year, 60% of businesses in the food and drink sector said they had been negatively affected by energy price rises, compared to an average of 38% across businesses as a whole.

With inflation at a 40-year high and prices in retailers already increasing, many major food and drink sellers are reluctant to pass additional costs onto consumers, while also being unwilling to absorb them themselves. This heaps more cost-pressure onto manufacturers who are struggling to maintain their profitability.

Fortunately, the most substantial step available for many food and drink producers is also one that delivers benefits to the other aspects of the trilemma. Improving energy efficiency not only reduces costs but improves sustainability and can help to make a site’s energy infrastructure more resilient to disruption. Put simply, the cheapest and cleanest units of energy are the ones that you don’t use.

Energy Sustainability

Consumers are increasingly aware of the carbon footprints of the products they buy and make purchasing decisions that reflect that performance. Over the past five years, there has been a 71% increase in searches for sustainable goods. This is particularly prevalent amongst younger generations, with 75% of millennials indicating that they consider sustainability when making a purchase.

Major food and drink retailers are already well aware of this and have entered into an ongoing arms race to demonstrate their sustainability credentials. On a weekly basis, one of the UK’s supermarket chains will announce a new measure that reduces energy consumption, emissions, or waste.

As the retailers themselves improve, they are subsequently turning to their supply chains to play their part in reducing their own emissions, thereby reducing the retailer’s Scope 3 emissions, those generated by its supply chain rather than its direct operations or energy use. Tesco was the first to mandate a minimum sustainability standard from its suppliers, and other retailers are increasingly following suit. To continue to deal with these important partners, improving energy sustainability is becoming compulsory.

Energy Reliability

Power disruption can be hugely costly for manufacturers and distribution centres, and the food and drink sector is no exception. What starts as a small power disruption can quickly snowball into a major outage lasting a significant amount of time as sensitive equipment needs to be shut down and restarted. Throughout this, wastage can quickly accumulate as cooking and production lines are disrupted, while overall productivity slumps.

Power disruption is steadily becoming more frequent in the UK, as we go through the necessary but difficult process of decarbonising our energy generation mix. Solar and wind energy is low cost and plentiful, but its inflexible nature can add significant additional stress to an already stretched grid.

While challenging, the right combination of technologies, advice and planning can allow a business to balance the varying elements of the trilemma effectively, reducing costs and carbon emissions while protecting their site from the risk of power disruption.