3.7.1 Structure and economic contribution
The EU food and beverage sector group has over 280,000 enterprises, over 4.3 million persons employed and contributed to over €1,000 billion in turnover and over €200 billion in value added for 2012. The sector group represents 14.6% turnover and 12.5% value added of EU’s manufacturing sector [EU Food and Drink, 2014] and 10.4% of final energy consumption by the eight sector goups under the scope of this study. SMEs accounted for 51.6% and 64.3%
of the sector’s turnover and number of persons employed respectively. The EU food and drink sector accounts for 16.1% share of global exports in 2013. Key economic indicators for the food and beverage sector are summarised in Table 3.61. Although EUROSTAT includes manufacture of tobacco products (NACE C12) under the same grouping of energy statistics,
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this sector is excluded from the remaining parts of the study as it is not economically significant in and the energy consumption is estimated to be less than 1% in comparison with production of food and beverage, based on national statistics from other Member States.
Table 3.61 Key economic indicators on food and beverage sector division and group level for EU 28 in 2012
Description
NACE (Group)
Number of enterprises
[n]
No. of persons employed
[n]
Turnover [mil EUR]
Value added [mil EUR]
Production value [mil EUR]
Manufacture of food
products C10 264,699 4,096,033 914,000 170,000 837,000
Processing and preserving of meat and production of meat
products C10.1 39,012 936,213 216,977 30,688 205,325
Processing and preserving of
fish, crustaceans and molluscs C10.2 3570 109,487 24,672 3,988 22,873 Processing and preserving of
fruit and vegetables C10.3 10,500 257,525 64,119 12,912 59,384
Manufacture of vegetable and
animal oils and fats C10.4 8,100 60,359 55,509 3,917 45,673
Manufacture of dairy products C10.5 11,998 354,079 140,000 20,000 130,000 Manufacture of grain mill
products, starches and starch
products C10.6 6,000 105,852 45,718 7,167 42,186
Manufacture of bakery and
farinaceous products C10.7 155,219 1,530,972 114,523 39,524 108,199 Manufacture of other food
products C10.8 25,100 599,926 171,869 42,505 155,170
Manufacture of prepared
animal feeds C10.9 5,100 122,339 77,500 9,530 66,000
Manufacture of beverages C11 23,956 384,849 148,000 36,700 140,855 Distilling, rectifying and
blending of spirits C11.01 5,077 39,432 23,845 7,087 23,005
Manufacture of wine from
grape C11.02 11,039 95,707 29,797 6,328 29,637
Manufacture of cider and other
fruit wines C11.03 619 4,307 1,835 369 1,738
Manufacture of other non-
distilled fermented beverages C11.04 175 585 143 27 433
Manufacture of beer C11.05 3,050 108,371 43,620 11,955 40,394
Manufacture of malt C11.06 146 3,586 3,944 533 3,733
Manufacture of soft drinks;
production of mineral waters
and other bottled waters C11.07 3,851 134,829 44,010 10,375 41,914 Manufacture of tobacco
products C12 260 41,800 44,762 7,335 -
Source: EUROSTAT, accessed on Dec 2014
125 3.7.2 Subsector share of energy consumption
The final energy consumption data reported in EUROSTAT is aggregated for all 3 NACE divisions, i.e. production of food, beverage and tobacco (C10, C11 and C12) are reported as an aggregated figure. Due to the diversity of products and processes involved within the sector, it is extremely difficult to estimate the share of subsector energy consumption without reliable statistical sources.
Table 3.62 provides a breakdown share of energy consumption between manufacture of food products (C10) and manufacture of beverages (C11) based on national statistics in Germany, Spain and Finland. Table 3.63 provides further details on the energy intensity within the sub- groups based on Spanish data.
Table 3.62 Share of energy consumption between food and beverage sector *
Sector NACE
(group)
Germany Spain Finland
Manufacture of food products C10 89% 89% 84%
Manufacture of beverages C11 11% 11% 16%
Source: German Federal statistics, National Statistics Institute of Spain and Statistics Finland
* Note: Germany and Finland (2013 statistics), Spain (2011 statistics)
The National Statistics Institute of Spain provides statistics for energy statistics provided data on energy cost (in million EUR) expensed by each of subclass of the Spanish food sector.
Table 3.63 provides a summary of the energy intensity, expressed in a ratio of energy cost per value added generated, for the subclasses within the food sector in Spain. In comparison, EU’s average energy intensity for the food sector ranges from 9 – 12% (see Section 3.7.5.1).
The intensity for the subclasses of the Spanish food sector falls around the same range, apart from Manufacture of grain mill products, starches and starch products (C10.6), manufacture of prepared animal feeds (C10.9) and Manufacture of vegetable and animal oils and fats (C10.4) with a higher intensity range of 15 – 16%.
Table 3.63 Spanish subsector energy intensity expressed in a ratio of energy cost per value added generated (Energy Cost / Value Added) in 2011.
Sector Description NACE Energy cost
[mil EUR]
Value added [mil EUR]
Ratio [%]
Manufacture of food products C10 1,676 15,992 10%
Processing and preserving of meat and production of meat products
C10.1 362 3605 10.0%
Processing and preserving of fish, crustaceans and molluscs
C10.2 73 768 9.4%
Processing and preserving of fruit and vegetables
C10.3 222 2037 10.9%
Manufacture of vegetable and animal oils and fats
C10.4 136 916 14.9%
Manufacture of dairy products C10.5 209 1926 10.9%
Manufacture of grain mill products, starches and starch products
C10.6 89 546 16.3%
Manufacture of bakery and farinaceous products
C10.7 205 2480 8.3%
Manufacture of other food products C10.8 245 2866 8.6%
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Sector Description NACE Energy cost
[mil EUR]
Value added [mil EUR]
Ratio [%]
Manufacture of prepared animal feeds C10.9 134 847.5 15.9%
Manufacture of beverages C11 209 4,558 4.6%
Source: EUROSTAT, National Statistics Institute of Spain
3.7.3 Key products
The food sector is categorised into 9 groups and the following section here highlights the product scope of the key groups extracted from the EUROSTAT statistical classification [NACE rev2, 2008].
Processing and preserving of meat and production of meat products (NACE C10.1). The activity of this group involves slaughtering of livestock for the production of fresh meat and poultry in cuts, which could be chilled or frozen. This also includes rendering of animal fats and production of non-edible products (originating from the slaughterhouse) like hide, skin, wool, feathers and down.
Processing and preserving of fish, crustaceans and molluscs (NACE C10.2). The activity of this group involves preparation, processing and preserving of fish, crustaceans and molluscs. The processes include freezing, drying, cooking, smoking, canning and etc for human consumption or animal feed.
Processing and preserving of fruit and vegetables (NACE 10.3). The activity of this group is categorized into 3 classes. (1) Processing and preserving of potatoes, which includes production of frozen potatoes, dehydrated mashed potatoes, potato snacks, crisp, potato flour and meal. (2) Manufacture of fruit and vegetable juice. (3) other processing and preserving of fruit and vegetables or food products primarily containing fruit and vegetable (salads, jam, marmalade, nuts, paste, bean curd, etc.)
Manufacture of vegetable and animal oils and fats (NACE 10.4). The activity of this group involves manufacture of crude and refined (blowing, boiling, dehydration, hydrogenation, etc.) oils and fats from vegetable and animal feedstock (olive oil, soya bean oil, palm oil, sun flower seed oil, cotton seed oil, rape, linseed, extracted fish and marine mammal oil, margarine, spreads, compound of cooking fats, etc.). This also includes non-edible animal oils and fats.
Manufacture of dairy products (NACE 10.5). The activity of this group involves manufacture of dairies and cheese products including fresh liquid milk (pasteurized, sterilized, homogenized or heat treated), milk based drinks, cream from fresh liquid milk, dried concentrated milk, solid milk or cream, butter, yogurt, cheese, whey, curd, casein and lactose). This group also includes the manufacture of ice cream and edible such as sorbet.
Manufacture of grain mill products, starches and starch products (NACE 10.6). The activity of this group involves milling of flour or meal from grains of vegetables, production (milling, cleaning and polishing) of rice and flour mixes or doughs from these products. This group also includes wet milling of corn and vegetable and production of starch and starch products (glucose, glucose syrup, maltose, inulin, gluten and tapioca.
Manufacture of bakery and farinaceous products (NACE 10.7). The activity of this group is categorized into 3 classes. (1) Manufacture of bread, fresh pastry goods and cakes (bread, rolls, pastry, cakes, pies, tarts, pancakes, waffles, etc). (2) Manufacture of rusks and biscuits, preserved pastry goods and cakes. (3) Manufacture of macaroni, noodles, couscous and other farinaceous products.
Manufacture of other food products (NACE 10.8). The activity of this group includes production of sugar, confectionary, prepared meals, coffee, tea, spices, perishable and specialty food products. This is categorized into 7 classes. (1) Manufacture of sugar. (2) Manufacture of coca, chocolate and sugar confectionery. (3) Processing of tea and coffee. (4)
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Manufacture of condiments and seasoning (spices, sauces, mayonnaise, mustard, vinegar, salt, etc). (5) Manufacture of prepared meals and dishes. (6) Manufacture of homogenized food preparations and dietetic food (infant formulae, baby foods, low energy food intended for weight control, gluten-free food, foods intended to meet the expenditure of intense muscular effort, etc.). (7) Manufacture of other food products (soups, broth, perishable prepared foods, food supplement, yeast, extracts of meat / fish / crustaceans or molluscs, non-dairy milk, cheese substitutes and artificial concentrates.
Manufacture of prepared feeds for farm animals (NACE 10.9). The activity of this group is the production of prepared feeds for farm animals, including concentrated animal feed, feed supplement, preparation of unmixed feeds and treatment of slaughter waste to produce animal feeds.
The beverage sector is categorized into 7 of the following groups:
Distilling, rectifying and blending of spirits (NACE 11.01). The activity of this group includes manufacture of distilled and potable alcoholic beverages (whisky, brandy, gin, liqueurs, etc.), manufacture of drinks mixed with distilled alcoholic beverages, blending of distilled spirits and production of neutral spirits.
Manufacture of wine from grape (NACE 11.02). The activity of this group involves manufacture of wine, sparkling wine, wine from concentrated grape must and low or non- alcoholic wine. This includes blending, purification and bottling of wine.
Manufacture of cider and other fruit wines (NACE 11.03). The activity of this group includes manufacture of fermented but non-distilled alcoholic beverages (sake, cider, perry and other fruit wines), mead and mixed beverages containing fruit wines.
Manufacture of other non-distilled fermented beverages (NACE 11.04). The activity of this group includes manufacture of vermouth and like.
Manufacture of beer (NACE 11.05). The activity of this group includes manufacture of malt liquors (beer, ale, porter and stout). It also includes low or non-alcoholic beer.
Manufacture of soft drinks, mineral waters and other bottled waters (NACE 11.07). The activity of this group includes manufacture of non-alcoholic beverages including production of natural mineral water, other bottled waters, soft drinks and non-alcoholic flavored or sweetened waters (lemonade, cola, fruit drinks, tonic waters, etc.)
3.7.4 Key sector processes
The key energy intensive processes in production of food and beverage can be categorised into the following 9 categories extracted from IPPC Best Available Techniques Reference Documents (BREF) in food and beverage sector.
Materials reception and preparation. This includes materials handling and storage, sorting and screening, peeling, washing and thawing.
Size reduction, mixing and forming. This includes cutting, clicing, chopping, mincing, pulping, pressing, mixing, blending, homegenisation, conching, grinding, milling, crushing, forming, moulding and extruding.
Separation. This includes extraction, de-ionisation, fining, centrifugation and sendimentation, filtration, membrane separation, crystallisation, removal of free fatty acids by neutralisation, bleaching, deodorisation by steam stripping, decolourisation and distillation.
Product processing. This includes soaking, dissolving, solubilisation/alkalising, fermentation, coagulation, germination, brining, curing, pickling, smoking, hardening, sulphitation, carbonation, coating, spraying, enrobing, agglomeration and ageing.
Heat processing. This includes melting, blanching, cooking and boiling, baking, roasting, frying, tempering, pasteurisation, sterilisation and Ultra High Temperature processing.
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Concentration by heat. This includes evaporation (liquid-to-liquid), drying (solid-to-solid) and dehydration (solid-to-solid).
Chilling processes. This includes cooling, chilling, cold stabilisation, freezing, cryoextraction, concentration (through chilling), freeze drying and lyophilisation.
Post processing operations. This includes packing, filling, gas flushing and storage under gas.
3.7.5 Energy metrics
3.7.5.1 Energy intensity based on sector energy cost
Table 3.64 provides an indication of the sector’s energy intensity for selected EU Member States expressed in 2 ratios134 from 2008 - 2012. The food and beverage sector ranks 7th most energy intensive, second least energy intensive sector in comparison with the 8 industrial sectors evaluated in this Study in terms of energy cost spent per value added generated Table 3.64 Energy cost intensity ratios per unit of VA and Turnover generated for selected MS *
Ratio 2008 2009 2010 2011 2012
1 Energy cost/ Value Added 12% 11% 9% 10% 10%
2 Energy cost/ Turnover 2% 2% 2% 2% 2%
Source: ICF analysis on EUROSTAT SBS, accessed Dec 2014
* Note: Data covers Bulgaria, Germany, Estonia, Spain, France, Italy, Hungary, Netherlands and Portugal.
3.7.5.2 EU final energy consumption for production of food and beverage
Table 3.65 and Figure 3.64 provides a summary of the final energy consumption and fuel mix for manufacture of food and beverage in EU28 as a whole. As detailed in 3.7.4, electrical energy appears to be the second largest energy type consumed within the sector as most of the key processes are powered by electrical energy, as expected for food processing and utility equipment (ovens, chillers, pumps, electrical machinery). Natural gas consists of almost half of the sector’s final energy requirement.
Table 3.65 Final energy consumption for EU food and beverage sector in 2012 EU primary energy consumption for the
sector
kTOE % of total
Gas 12,755 45%
Electricity 9,457 34%
Solid fuel 1,416 5%
TPP 2,373 8%
Other 2,055 7%
Total final energy demand 28,056
Source: EUROSTAT, accessed Dec 2014
134 (1) Ratio of energy cost per unit of value added and (2) Ratio of energy cost per unit of turnover, i.e. the monetary value paid by manufacturers on energy products for every unit of value added or turnover generated by the sector.
129 Figure 3.64 Energy mix for EU food and beverage sector in 2012
Source: EUROSTAT, accessed Dec 2014
3.7.5.3 Energy end use profile
Based on the estimated share of energy consumption amongst the food and beverage sector, and the fuel mix profiles, the following figures present an aggregate energy use profile for the primary energy sources, including electricity, natural gas, total petroleum products (i.e., oil), coal, and other categories135.Referring to the processes as detailed in Section 3.7.4, cooling and refrigeration consumes the largest share of electrical energy, followed by pumps and compressed air. The main power consumers for natural gas are steam boilers and ovens for heat processes.
Figure 3.65 Electricity use profile
Source: ICF International
135 Based on ICF energy efficiency studies within the food and beverage sector Gas
46%
Electricity 34%
Solid fuel 5%
TPP 8%
Other 7%
Cooling &
Refrigeration 28%
Other Motors 18%
Pumps 17%
Compressed Air (Utilities)
14%
HVAC 8%
Fans/Blowers 7%
Lighting 3%
Furnaces/ kilns/
ovens/ dryers 2%
Other 1%
Steam boilers/
systems 1%
Process specific 1%
0%
Electricity
130 Figure 3.66 Natural gas use profile
Source: ICF International
Figure 3.67 Total petroleum product (e.g., oil) use profile
Source: ICF International Figure 3.68 Coal use profile
Source: ICF International
Steam boilers and steam systems
71%
Furnaces/ kilns/
ovens/ dryers 23%
HVAC 4%
Other 2%
Other 6%
Natural Gas
Steam boilers and steam
systems 86%
Other 9%
Furnaces/ kilns/
ovens/ dryers 5%
Steam boilers and steam
systems 50%
Furnaces/ kilns/
ovens/ dryers 50%
Coal
131 Figure 3.69 Energy use profile for other sources; i.e., biomass
Source: ICF International
3.7.6 Projection of energy consumption trend
The following details are an extracted summary of the sector profile in Annex 1.
The food and beverage industry is traditionally strong in the EU and has a dominant position in the world market. As the EU market is mature, it benefits from positive, long term relationships across the value chain and fully developed integrated processes, from agriculture sector to production and quality assurance systems. Regulation on food and drink sector will become more stringent pressuring the sector to further innovate on their production processes.
The demand in high value-added, niche markets such as natural foods and convenience foods continues its strong growth. The high fragmentation of consumer segments continues to increase a wide range of food enterprises to operate, ranging from multinational, multiproduct manufacturers to one-product micro enterprises. However, the medium, small, and micro enterprises will not be able to compete on cost to the same extent as large companies, and therefore the only option for these companies is product innovation. Growing consumer demand for locally sourced products will retain the growth of the 2 largest group (in terms of turnover), which is production of meat and dairy products. In summary, the sector will continue to grow on par with EU’s long term economical trend.
Figure 3.70 provides a comparison of EU GDP trend vs. the sector’s turnover for the period of 2006 – 2012. While EU’s GDP fluctuates over the financial crisis period, the sector’s turnover trend maintains a relatively steady growth. The sector’s historical linear growth trend, limited to available statistics from 2006 to 2013, indicates a growth rate of 4.86% p/a.
Steam boilers and steam systems
71%
Furnaces/ kilns/
ovens/ dryers 23%
Process Specific 4%
Other 2%
Other
132 Figure 3.70 EU GDP trend vs. Food sector turnover from 2006 - 2012
Figure 3.71 provides a projection of EU’s food and drink sector turnover assuming this growth rate maintains on par with the Commission’s reference scenario of EU’s GDP growth of approximately 1% p/a to 2050 [EC, 2013].
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
11,000,000 11,500,000 12,000,000 12,500,000 13,000,000 13,500,000
2006 2007 2008 2009 2010 2011 2012 2013 Machinery Sector Turnover [mil EUR]
GDP [mil EUR]
GDP vs. Sector Turnover
EU GDP Sector turnover
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
11,000,000 11,500,000 12,000,000 12,500,000 13,000,000 13,500,000
2006 2007 2008 2009 2010 2011 2012 2013 Machinery Sector Turnover [mil EUR]
GDP [mil EUR]
GDP vs. Sector Turnover
EU GDP Sector turnover
133 Figure 3.71 Projected EU food and drink sector turnover vs. EU GDP trend
European companies are technological advanced and at the forefront of product innovation, resulting in continuous improved productivity and high standards for food safety and quality.
This becomes increasingly important as incomes rise across the world in emerging economies, such as China, India and Central and Eastern European countries. Consumer choices are shifting towards higher quality, healthier products, organic, locally sourced, fair trade and sustainably produced products, driving enterprises to further improve on its production process.
Figure 3.72 provides a historical trend for energy consumption and EU GDP for the past 17 years (1995 – 2012). The energy consumption trend fluctuates year-on-year primarily due to the production fluctuation in the wide range of product scope within the sector, in which the specific energy intensity and energy consumption is fully dependent on the product output type and the associated processes in manufacturing the finished product to the specification as dictated by the consuming market on the specific year. However, analysing the longer term linear trend line, it can be observed that energy consumption has reduced by approximately 0.6% despite an increase of 85% in EU GDP over the same 17-year period. The sector has demonstrated a good track record in reduction of energy intensity and consumption, effectively de-coupling all of these aspects from production growth. There are also very limited emerging technologies within the sector and energy intensity is primarily driven by innovation of new products and quality, which may not necessarily result in lower energy consumption.
- 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000
2013 2020 2030 2040 2050
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000
EU GDP Forecase [mil EUR] Projected Machinery Sector Turnover [mil EUR]
GDP Sector turnover
134
Figure 3.72 Historical trend of Energy consumption for Food and Beverage sector vs. EU GDP
Source: ICF analysis on EUROSTAT, accessed Dec 2014
On the balance of the above factors, the energy consumption will remain volatile but it is expected that the sector will continue its strong reduction trend in energy intensity in the longer term, resulting in a constant reduction in energy consumption trend as production continues to increase as projected in Figure 3.73.
Figure 3.73 BAU projection for food and beverage sector
0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000
25,000 26,000 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 EU GDP Forecase [mil EUR]
Energy Consumption [kTOE]
F&B energy consumption vs. GDP
Sector En consumption GDP Linear (Sector En consumption)
0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000
10,000 15,000 20,000 25,000 30,000 35,000
2010 2020 2030 2040 2050
Sector Turnover [mil €]
Energy Consumption [kTOE]
Turnover Energy consumption
135 3.7.7 Projection of energy saving potential
Figure 3.74 presents the energy consumption projections from 2011 through to 2050 under the BAU, technical and economic scenarios136 from the modelling outputs of IEEM.
A total of 93 ESOs which are technically feasible to the sector were accounted for in the modelling process. The projected savings under the technical137 potential scenario is 6.8 million TOE (26% saving) in year 2030 and 5.7 million TOE (24% saving) in year 2050 with reference to the BAU projections.
A total of 42 ESOs were included under economic scenario 1, resulting a projected saving of 1.4 million TOE (5% saving) in year 2030 and 2.4 million TOE (10% saving) in year 2050 with reference to the BAU projections.
An additional 19 ESOs, i.e. a total of 61 ESOs, were included under economic scenario 2, resulting in a projected saving of 1.7 million TOE (6.5% saving) in year 2030 and 3.2 million TOE (13.5% saving) in year 2050 with reference to BAU projections. The additional savings for economic scenario 2 is mainly attributed to the following additional ESOs:
Premium efficiency control with Adjustable Speed Drives (for pumps and motors)
High efficiency burner
Advanced heating and process control (oven)
Process heat recovery
Variable Speed Drives on chiller compressors
The full list of Energy Saving Opportunities are listed in Annex 3. The list of ECOs under economic scenario 1 and 2 is presented in Annex 4.
Figure 3.74 Projected economic and technical potential scenario energy use
136 The economic scenario 1 assumes an uptake of ESOs which fulfils the less than 2 year simple payback criteria, whereas the economic scenario 2 assumes an uptake of ESOs of less than 5 year simple payback.
137 Under the technical potential scenario, it is assumed that all technically feasible ESOs relevant to the sector is implemented regardless of economic viability.
15,000 17,000 19,000 21,000 23,000 25,000 27,000 29,000 31,000
2 0 1 1 2 0 1 5 2 0 2 0 2 0 2 5 2 0 3 0 2 0 3 5 2 0 4 0 2 0 4 5 2 0 5 0
Annual Energy Consumption (kTOE)
BAU Consumption Technical Scenario Consumption Economic Scenario 1 Consumption Economic Scenario 2 Consumption