To stay competitive, food producers must stay on top of rapidly-changing consumer attitudes and market trends, technological advances, changes in regulations and safety issues. Finding ways to remain profitable, without sacrificing the quality of finished products, is a constant challenge. While it may not seem obvious, using Energy as a Service to upgrade energy systems can provide the competitive advantage food producers need to stay ahead.
Yes.
The choices food producers make about energy consumption can profoundly influence their bottom line. Using energy more efficiently can reduce overhead costs, streamline operations, reduce carbon emissions, and increase profitability. How they manage environmental impacts such as carbon emissions is an increasingly important differentiator for both consumers and investors.
Getting food from farm to fork requires a staggering amount of energy. Most recent estimates suggest that food production accounts for approximately 17% of the energy budget for the U.S. – and produces an equivalent share of the nation’s greenhouse gas emissions.
On average, food production consumes more than twice the energy of other commercial businesses. Long hours of operation and highly-specialized equipment account for much of energy consumption, but overall the energy consumption by food service buildings is excessive and often wasteful. Inefficient energy systems and equipment can waste up to 80% of the energy consumed. As the food industry relies more and more upon energy-intensive technologies to increase production, energy consumption continues to grow.
With every facet of the business under strict guidelines, food processing plants need to create an environment which is both safe and productive. Upgrading to LED lighting is an obvious and effective solution. On average, LED lighting technology can save 60% - 70% in energy costs over traditional lighting technology such as CFL and metal halide bulbs. In addition to substantial cost savings, LED lights provide several other important benefits for food processors:
HVAC is both process and product specific in the food production industry. As commercial HVAC systems age, they become less efficient, draining more energy and increasing operating costs. They also break down more often, causing costly unscheduled downtime, maintenance, and repair. The tangible benefits of upgrading HVAC equipment include:
Unfortunately, since energy is typically viewed as peripheral to the business of production, cost-saving energy efficiency upgrades face an uphill battle for capital and attention. Facility managers and engineers simply lack the time to tackle quick energy fixes, evaluate energy efficiency technology options, and analyze potential payback data. And, of course, finding and diverting capital from revenue-producing programs to energy efficiency programs is always a struggle. When asked about the barriers to energy efficiency, around 28% of the respondents in a recent survey identified 'capital expense' as the biggest roadblock to making improvements.
The simple truth is that food production companies need to invest in smart energy solutions to maintain a competitive edge. Energy as a Service provides the means for food producers to improve energy systems without up-front costs. Rather than trying to manage energy equipment and systems in-house—which consumes valuable human and financial resources— relying on third parties, who are expert in this space, to help manage energy services eliminates the risks and hassles associated with technology evaluation, project implementation and, most importantly, the up-front capital needed for energy upgrades.
For plant executives, the prospect of a service company assuming responsibility for their energy assets is often a welcome development. They’ve had to cope with the mounting safety, health, and the operational risks associated with aging energy equipment for years. It’s a daunting task. Outsourcing this responsibility to a third party allows food producers to mitigate risk, overcome funding issues and, most importantly, focus on their core mission.
Energy as a Service allows food producers to shift energy from a capital expense – one in which they must purchase, maintain and depreciate assets – to an operational expense. Much like a ride-share service, you don’t have to buy the car to enjoy the ride – and you don’t have to purchase your energy assets to enjoy the savings they deliver.
Energy as a Service is a performance-based financial solution that delivers immediate and ongoing energy savings- guaranteed. Under an Energy-as-a-Service agreement, the energy program developer secures third-party funding. That funding partner pays for all upgrade assets/equipment and covers all implementation costs. Since the funding partner finances the program and owns the energy savings assets the food producer has absolutely no capital expense – and none of the worries that come from equipment ownership.
The energy savings are calculated – and guaranteed – using agreed-upon measurement and verification protocols. A portion of those savings is simply charged back to the food producer each month as an operating expense.
In addition to guaranteeing cost savings, Energy as a Service agreements specify and guarantee performance-based outcomes such as light and temperature levels, water reduction, operating efficiencies, and maintenance reductions.
A growing number of Fortune 500 companies are capitalizing on emerging options for controlling energy costs – using Energy as a Service to accomplish their sustainability and energy efficiency goals. They’ve discovered that, in addition to the cost savings, becoming more strategic about energy enhances overall business performance and delivers a tangible competitive advantage.
For food producers, Energy-as-a-Service provides a risk-free opportunity to improve production environments, reduce operating expenses and increase profits – without any initial capital investment.
