Rising electrical costs impact Food and Beverage Industry

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France, as well as most of the EU countries are announcing a significant rise in electricity costs over the next few years. From 2013 to 2017, France can experience up to a 30% increase in electricity.  What does this mean for industry such as Food and Beverage?

Food and Beverage factories typically are not using as much electricity compared to other industries. For example 10% of the cost of producing yogurt comes from energy … but the margin on this final product is very low and can be down to 2%!  Even a small increase in electrical costs can impact the margin on finish goods and drive it even lower.

The Food and Beverage industry is also being pushed from consumers to focus on “green” solutions that include showing a reduction in carbon foot print over the next several years.

What are the opportunities to keep this business sustainable?

 – Reducing the costs by buying abroad will generate transportation costs and could generate a negative impact on the carbon foot print.

 – Producing in low cost countries to import into Europe will be difficult due to the cold temperature chain, carbon and cost impacts

 – Moving from electricity back to fossil energy is expensive and not sustainable

  But 2 sources of progress seem to come to light…

 1)       Reducing the electricity consummation seems to be the best ROI and long term choice. In short, the cheapest kW is the one you don’t use!  This general idea means being able to produce locally as much as before, but with less energy.

 2)       Moving from large centralized factories to smaller distributed, movable plants that can go from the farm directly to the local supermarkets. Does this sound like a sustainable idea to you?

 I am interested in any other ideas or comments from your side?