Reducing energy costs while driving decarbonisation in the food & beverage industry

Energy consumption and cost have become some of the most visible line items in the Food & Beverage sector’s operating costs. In an environment where margins are already under pressure, rising energy and carbon costs, along with volatility in energy markets, are creating an additional layer of unpredictability.

Many companies built their decarbonisation strategies with the primary goal of reaching net zero ambitions. But in today’s context, the decarbonisation agenda is often being reframed. Executives are increasingly asking a simple question: what initiatives can mitigate energy cost impacts now, while still contributing to the overall decarbonisation trajectory?

What leading companies are doing to mitigate energy costs and drive decarbonisation

Leading companies are refining their approach to energy efficiency interventions. Rather than managing isolated site-level initiatives, businesses are implementing coordinated energy efficiency programmes. These programmes typically identify and quantify opportunities in terms of energy, carbon, and cost savings, as well as OPEX, CAPEX, and ROI. This approach includes:

• Incremental improvements to improve current processes, e.g. switch off, controls, and CIP (Clean In Place) optimisation
• Planning optimisation to minimise unproductive changeover, downtime, and CIP, e.g. production scheduling and handover
• Behavioural changes to optimise operator, engineer and maintenance activities and behaviours, e.g. operator interventions, predictive maintenance, and training
• Procedural improvements through standard operating procedures and CAPEX processes, e.g. sustainability integration in CAPEX procedures, startup/shutdown, changeover, and maintenance
• Planning of CAPEX and asset care, e.g. thermal integration and storage, heat pumps, high efficiency motors, and new technology
• Consideration of game changers and other new technology and infrastructure changes with longer payback, e.g. CCUS, embedded renewables, production geographies, and disruptive technologies.

Companies are also integrating energy efficiency with carbon, water, waste and productivity, recognising that all of these aspects are interdependent and not mutually exclusive.

This approach makes it possible to prioritise measures that offer the most attractive paybacks and to bundle those with longer paybacks. Focusing on the business case for a combined set of measures enables approvals that individual projects would not get. Additionally, a structured, systematic approach allows the identification, approval and implementation of measures more rapidly, allowing cost savings to materialise faster.

Many companies are now turning their attention to the untapped potential of on-site energy flexibility, uncovering opportunities that go beyond efficiency alone. By targeting key value pockets such as:

• Future-proofing electricity grid connections through load shedding and load profiling, avoiding costs and delays of grid expansion while accommodating future electrification needs
• Considering alternative fuels, through cost comparison and technology alternatives, e.g. electric heating
• Maximising energy recoveries to make the best use of what is available, e.g. heat recovery, storage, and heat pumps
• Reducing OPEX through more accurate load forecasting, smarter dispatch of on-site assets (e.g. thermal and electric storage) and better alignment of production needs and utilities
• Being ready to tap into new revenue streams, whether through market mechanisms or bilateral contracts (e.g., capacity markets, Power Purchase Agreements, Demand Side Response), where these opportunities become accessible

Additionally, leading companies are increasingly seeking to better coordinate energy procurement and on-site asset investment decisions, which have traditionally been handled by separate teams with differing objectives. There will be an ever-growing need as the energy sector moves into a world where hourly time matching of green electricity supply with site demand increasingly becomes the norm. Integrating these decisions enables more efficient on-site energy asset sizing and utilisation, reduces exposure to energy market volatility, and ultimately lowers the total cost of ownership.

Case study: Energy optimisation and decarbonisation for a Food & Beverage company

Facing increasing competition and a dynamic demand and product mix, a Global ready meal, bakery and snack manufacturer decided to restructure its energy optimisation and decarbonisation programme.

Initial energy audits had highlighted that only a limited proportion of individual energy efficiency measures would have passed the internal payback approval threshold and that the local team’s engineers did not have the bandwidth to implement projects.

To unlock progress, the decarbonisation team structured a comprehensive programme aiming for:

• Integrating energy, carbon, water, waste, and productivity measures
• Harvesting non-CAPEX improvements (behavioural, procedural, energy management information systems)
• Organising training and coaching to boost behavioural engagement
• Setting an internal carbon pricing to highlight the benefit of decarbonisation and integrating carbon costs benefits such as reduced carbon tax, incentives and grants
• Bundling of improvement measures to achieve an overall acceptable ROI
• Sharing best practices across all sites globally
• Developing dynamic modelling of the impact of the mitigation measure portfolio against changing demand and product mix

In addition to energy efficiency, the company has also pursued demand-side flexibility opportunities at its largest production site and successfully prioritised a “heat storage as a service” model that allows it to shift part of its energy demand to off-peak hours and reduce energy costs.

The programme has proven to be flexible and agile enough to cope with the volatile production market and product mix and has exploited the energy markets to achieve more than 5% reduction in energy costs per year and more than 4.5% reduction in carbon emissions per year in line with SBTi.

Energy cost volatility and rising carbon pressures are no longer future challenges. Leading Food & Beverage companies are proving that coordinated energy efficiency programmes, integrated resource strategies, and digitally-enabled flexibility measures can deliver immediate cost savings while accelerating decarbonisation goals.

Many projects in the sector highlight significant untapped potential in energy optimisation and efficiency initiatives that both reduce costs and advance carbon objectives.

Drawing on our experience with leading F&B companies, we would be happy to share market insights and best practices, and discuss how similar approaches could help you capture quick wins and longer-term energy efficiency opportunities that withstand payback scrutiny.