Numbers were similar this year, with 86 percent “moderately” or “severely” impacted and those finding energy cost increases to be more than they anticipated rising to 61 percent.
The steps processors are taking to manage energy costs are nearly identical to answers last year, including energy conservation (68 percent), energy audits (35 percent) and recycling/redirecting (23 percent). Multiple answers were allowed. Nearly 19 percent are looking at alternate energy sources.
For some, it’s the basics. One respondent wrote: “Simple things like finding and repairing compressed air leaks, steam leaks, leaking condensate traps. Also, matching the energy supply to the energy demand such as lowering steam and air pressure when the demand allows. Basically it’s keeping a vigilant watch over the resources.”
How We Do It
The early-2008 run-up in oil prices drove home how integral the price of energy is to nearly every facet of this business — not just to running the plant. While the recent, dramatic drop in oil prices is welcome news to all, apparently food and beverage processors are not seeing all the benefits they expect.
“The rapid rise of oil prices for the first seven months of 2008 impacted our pricing structure,” says Les Horowitz, plant manager for Colavita Inc., Linden, N.J. “But the rapid decrease in oil prices has not been matched by a decrease in raw material or transportation charges.”
Energy, of course, brings us to the environment. This year, we didn’t beat around the carbon-absorbing bush: “Given the state of the economy, how important are your company or plant's ‘green’ initiatives for 2009?” we asked. And 62 percent of you said green initiatives are becoming more important than they were in 2008.
We assumed economic constraints would weaken processors’ reserve, especially at the plant, but “only” 18 percent said the issue was less important.
However, more than two-thirds say their companies are not planning to implement any sort of alternate energy sourcing (solar, wind, biodiesel) for their facility in 2009.
All is not lost on the green front, however. The main area where processors are putting their money where their mouths are is solar power. Other strategies written in include: conservation, wind power and biofuels (biodiesel, waste burning, methane etc.).
The only significant non-energy initiative companies are using to make their facilities more green is recycling. A few respondents wrote in new lighting, eliminating or reducing packaging and even elimination of paper communications.
16 tons and whaddaya get?
Labor technically held down third place, although sourcing & materials got a few more first-place votes. Labor saw a change in focus compared to previous years. Immigration worries abounded at the end of 2007, and finding and keeping good workers was paramount the year before. While those two remain concerns, this year the biggest labor issue is layoffs.
On the positive side, more than half — 52 percent — say they plan to maintain their current workforce through 2009, and one in six actually plans to increase staff . Twenty-one percent anticipate workforce reductions, either actively (8 percent) or passively (i.e., through attrition — 14 percent – and we did some rounding here).
A snapshot of two job categories opens a narrow window on workforce trends. When asked to compare staffing levels now with those of three years ago for both engineering and R&D, “about the same” was the prevalent answer. But among those noting changes, engineering appears to be on the slide and R&D on the upswing. Sixteen percent see a reduction in engineering staffing while 14 percent report it growing. But in R&D, 20 percent see growth while only 14 percent see a decrease.
Perhaps the most surprising item in our labor picture is the 36 percent of companies planning to give pay raises next year. Although down slightly from last year’s 42 percent, fewer (9 percent) say they will decrease salaries, as opposed to last year’s 13 percent who did.