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Food and beverage manufacturing is a crucial sector, responsible for nourishing a global population expected to increase to 9.7 billion in 2050. The industry faces constant change, with the need to balance rapidly evolving consumer trends, growing market demands, and supply chain dynamics. 

Food and beverage manufacturers must navigate complex challenges. They operate under tight margins, there is fierce pressure from within to find cost efficiencies, stakeholders are demanding more sustainable practices and commitments, and they face intense competition.

All the while, they must ensure profitability and productivity, reliable production, and regulatory compliance. Food processing and packaging must be efficient and abide by high quality standards – the safety of people, products, and processes must be always maintained.

Add to the above challenges the fact that food and beverage manufacturing is an industry that is heavily reliant on critical assets and processes – like refrigeration, heating, air compressors, and other energy-intensive equipment across production processes. As a result, energy constitutes a significant portion of operating expenses.

An industry hungry for energy change

These factors are increasing the need for food and beverage manufacturers to find operational efficiencies, cut energy usage and emissions, and reduce costs. And strategic, flexible energy usage can be the secret sauce to unlocking financial advantage.

What if you were told that by strategically managing your energy-consuming assets, your facility could save on energy bills, reduce carbon emissions, and earn revenue? But to do this, you may need to temporarily switch off certain pieces of machinery at some point in time during the year. Pretty risky, right? 

Not so. Many food and beverage manufacturers are evolving from being energy consumers to energy suppliers, becoming active participants in energy flexibility programs, like demand response, to unlock new revenue streams and improve sustainability. 

The value of strategic, flexible energy use

With most commodities, value is determined by two key factors: price and quantity. But when it comes to energy, a third component – time – plays a big role. When a facility uses energy is just as important as the price they pay for it and how much they use – because energy flexibility is valuable to the electric grid, and the grid rewards that flexibility.

More and more, large energy consumers – like food and beverage manufacturers – are realizing that energy is no longer simply a line item on their budget. It’s an asset they can harness, control, and monetize. Strategic, more flexible energy use is a low-hanging fruit that not only makes an immediate positive impact across a facility’s energy infrastructure – it enables a cleaner, more sustainable electric grid as well. 

Energy flexibility is rewarding for:

• The electric grid: grid operators need to ensure electricity supply and demand are always matched. When there is not enough supply to meet demand (e.g., during heatwaves when demand surges), the grid has traditionally relied on peaker plants to provide needed capacity – but these assets are fossil-fuel powered and expensive to build and maintain. As a result, grid operators are focusing on more cost-effective and less fuel-intensive resources.
• Food and beverage manufacturers: grid operators incentivize facilities to be more flexible with their energy use – because flexible sources of capacity are proving to be more cost-effective and environmentally conscious methods for helping the grid ensure stability. Instead of firing up peaker plants, the grid pays large energy users to reduce consumption to help maintain the balance. 

Demand response: the classic example of energy flexibility

When a facility uses energy has value to the electric grid, and demand response programs help facilities realize that value. Demand response is an energy flexibility solution used by utilities and grid operators to help balance the supply and demand of electricity on the grid – instead of firing up a fossil-fuel powered peaker plant or buying electricity on the open markets. 

Demand response incentivizes large energy users – like food and beverage manufacturers – to be more flexible with their operations, enabling them to monetize their energy flexibility. When the grid needs support to ensure supply and demand are balanced, they ask demand response participants to temporarily reduce or modify their energy usage during grid stress in exchange for payments.

Through demand response, facilities can earn substantial payments for being on call to reduce energy use when the electric grid needs support – a win-win for both facilities looking to boost their bottom-line, and the communities they serve. 

For an industry that is heavily focused on productivity, up-time, and food safety, it’s completely understandable for food and beverage manufacturers to be initially concerned that reducing or shifting energy demand may affect day-to-day operations. However, a facility can tailor a unique plan that works with their operations – it all comes down to being strategic with energy usage.

Demand response strategies for food and beverage manufacturers

The good news is that facilities with heavy energy demands typically have flexible elements of their operations, and they can leverage that flexibility without significant disruption. Food and beverage manufacturing facilities are no exception.

In our new eBook, “Demand response: a recipe for success in food and beverage manufacturing,” we explore practical approaches for how food and beverage manufacturing facilities like yours are leveraging flexible energy usage to unlock new revenue, drive efficiencies, and advance sustainability. 

You’ll discover which assets in food and beverage manufacturing facilities are commonly included in demand response curtailment plans, inspiring you to consider similar assets within your own operations. You’ll learn how to strategically and flexibly manage these assets to earn revenue in demand response. And you’ll find the key to successful demand response participation. Get your copy of our eBook today.