Aging Grid, Energy Costs Put Food, CPG Operations At Risk
The U.S. Food & Beverage and Consumer Packaged Goods (CPG) sectors are confronting unprecedented energy challenges, reveals a new survey jointly authored by AlphaStruxure, Schneider Electric, and Endeavor Business Intelligence. Grid congestion, soaring electricity costs, and macroeconomic uncertainty are delaying expansions and straining supply chains across the food processing sector, according to the Kilowatts into Calories: Surveying Food Processors on Energy Challenges report.
Key findings from 145 senior energy decision-makers include:
- 57% of food processors planning expansions face challenges securing grid power.
- 52% report their electric utilities lack sufficient capacity for growth.
- 7 in 10 are waiting at least three years for upgrades; some have reported wait times stretching beyond six years.
- 91% pay above the $0.08/kWh U.S. industrial average; nearly half saw costs rise 26% or more over five years.
- 81% use backup generators, yet 63% lack enough capacity for outages beyond a few hours.
For decades, food processing facilities secured large-scale utility interconnections with relative ease. After the artificial intelligence (AI) industry took off, food processors are now in competition with data centers to secure scarce electricity from the grid, and this scarcity is driving up wait times and energy costs. This is the first industry survey to measure how the U.S. F&B and CPG industries are adapting to the unfolding energy crunch. The results convey just how much these industries are facing energy disruption — and the ways they’re finding creative solutions.
“This survey data points to the reality of systemic energy risk,” said Juan Macias, CEO of AlphaStruxure. “The issues food processors are facing – delays, outages, and sudden rate increases — are now increasingly common. For instance, we know of food processors that have already broken ground on new facilities, only to discover they can’t get power to the site by the time their facility opens. That’s why we’re seeing the industry turning toward alternative energy solutions.”
“America’s aging grid and surging demand are creating new risks for energy-intensive industries,” said David Cooper, Director of CPG, North America, at Schneider Electric. “We’re seeing more frequent outages and higher costs, especially in regions like California. Our research shows that nearly half of processors have seen energy costs spike by more than 25% in five years.”
The report also highlights sustainability priorities: fleet and facility electrification and Scope 1 emissions reduction rank highest, even as confidence in achieving these goals varies.