• Food and beverage manufacturers: Improve the ROI of your sustainability program

Worker inspecting goats milk in dairy, food and beverage, machine control.
Food and beverage manufacturers: Improve the ROI of your sustainability program

Food and beverage manufacturers are now promoting corporate responsibility and delivering a clear return on investment through sustainability programs. In fact, compared to other industries, the food and beverage industry leads the way in meeting government regulations and disclosing carbon emissions information.

However, pressure is increasing for more operational transparency, driven by resource shortages, rising energy costs, and tougher regulations. Customers want to know more about the brands they buy, and regulatory agencies want to ensure food and beverage manufacturers preserve environmental and social responsibility.

Making the case for sophisticated sustainability programs
Estimates calculate that 10% of the world’s emissions originate from manufacturing, and industrial enterprises have the potential to improve emissions levels by 26%. A 2010 Accenture survey showed that 72% of CEOs believe strengthening brand reputation and trust among consumers and governments is the strongest motivator for sustainability actions. Moreover, 49% of food and beverage CFOs perceive a significant link between sustainability performance and financial performance, according to a 2012 white paper released by Deloitte.

A comparison of manufacturing companies listed on the Dow Jones Sustainability Index demonstrates that these companies earned a higher profit margin than their peers. A UC Davis study documented significant stock price increases for organizations that voluntarily announced carbon emission information via press releases. In a study on consumer behavior, researchers concluded that sustainability considerations drove or influenced the buying decisions of more than half the shoppers interviewed, according to Deloitte.

A proven approach: Integrating sustainability and energy managementSustainability and energy management are synergistic programs which, for best results, should be integrated and run together. Integrating these programs in a structured manner can yield benefits such as reduced costs, increased profitability, lower carbon emissions, mitigated business risk, and improved corporate image.

A best practice for elevating a manufacturer’s sustainability program starts with an approach used worldwide: “Plan / Do / Check / Act,” or PDCA. 

This method underlies the structure of the ISO 50001 quality standard (specification for an energy management system) and comprises these steps:

  • Plan – Develop a sustainability and energy management roadmap to define goals and targets, and formalize action plans.
  • Do – Implement ISO 50001 quality practices; prioritize and deploy efficiency initiatives; and track metrics for energy, water, waste, and supplier compliance.
  • Check – Monitor efficiency initiatives, reporting measurements, and KPIs to track progress.
  • Act – Conduct analysis to determine the cause of any significant differences between actual and planned energy savings results; identify new savings opportunities; share best practices across the organization; and ensure continuous improvement by incorporating energy and sustainability activities into business operations.

Removing obstacles that hinder sustainability planning
A number of challenges complicate the task of establishing an effective sustainability and energy management roadmap. For instance, energy performance varies widely depending on the processes used in food and beverage manufacturing, making it difficult to benchmark. Processes that already deliver efficiency gains require continuous support to maintain those gains. In addition, the “low-hanging fruit” of obvious efficiency gains have often already been picked. As pressure to increase efficiency increases, new efficiency improvements can be more difficult to find and implement.

Deploying PDCA best practices can overcome these challenges, as they emphasize ISO 5001 compliance to blend energy and sustainability management with corporate goals along with providing a guide to establishing internal processes for continuous improvement.

Energy and sustainability management programs mitigate the risk of increasing commodity and energy prices, and a well-executed program can reduce energy costs by 10 to 30%. Sustainability successes help organizations to outperform competitors in an environment characterized by difficult market conditions. 

Learn more about the Plan / Do / Check / Act method by downloading this Schneider Electric white paper: “Accelerating the Benefits of Food and Beverage Sustainability Programs: A Best Practices Guide.”
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