Food Firms Roll on Alternative Fuels

A food company’s energy costs don’t begin and end at the dock door. Transport of raw materials in and finished goods out is a significant part of the cost of goods sold, and food and beverage firms are taking the lead in exploring alternative fuels for their truck fleets, just as they are in the forefront of renewable energy sources to power their plants.

Alternatives to diesel often generate fewer pollutants and lend a green halo to company’s sustainability claims, but the real attraction is cost. Options like compressed natural gas (CNG) can slash fuel costs in half and provide greater price stability than diesel. Truck manufacturers are developing technology that ensures the same level of performance reliability as conventional vehicles, and a refueling network is being built to make the use of alternative fuels practical.

One of the oldest options is liquid propane, often referred to as propane autogas by proponents. The Schwan Food Co. began burning liquid propane in home delivery trucks in the 1980s, though its continued use was in jeopardy when vehicle manufacturers phased out carburetors and moved to fuel-injection systems. Fifteen years ago, Schwan acquired Eagan, Minn.-based Bi-Phase Technologies, which developed fuel-propulsion technology that kept propane below its -40° F flash point until it reaches a motor’s intake manifold.

More than 3,000 Schwan’s trucks run on liquid propane, Bi-Phase president Tim Koepel says, and he Bi-Phase technology is installed in the delivery trucks of El Milagro Inc., a tortilla maker based in Chicago’s Little Village neighborhood. “UPS is converting 1,000 delivery trucks to propane in 2014,” according to Koepel.

The city paid 80 percent of the conversion costs for El Milagro in the late 1990s under an alternative fuel initiative aimed at fleets with more than 10 vehicles. More recently, another Chicago-based firm, Alpha Baking Co., placed 22 Ford E-450 bread delivery trucks into service. But most of the propane-powered vehicles on American roads are light-duty trucks. When Anheuser-Busch began investigating renewable fuels for beer trucks, propane wasn’t part of the discussion.

“The options are limited when you’re involved in heavy-haul beverage transportation,” notes James Sembrot, senior director-transportation at Anheuser-Busch, St. Louis. Liquefied natural gas and CNG were considered when the brewery purchased two tractors equipped with 12 liter Cummins heavy-duty engines that can burn either fuel while hauling an 80,000 lb. beer load. When A-B took delivery in January, a trial using CNG began at its Houston brewery.

The cost of CNG is about half compared to diesel, A-B’s Billy Lawder told attendees at the Alternative Clean Transportation Expo in May, and pricing is less volatile. Decoupling of gas prices from petroleum likely will ensure long-term stability, and tax incentives can make either CNG or LNG even more economical.

Beer deliveries from Houston travel as far as Dallas and San Antonio, and the ability to refuel was a consideration in selecting CNG. “Texas has a very high density of compressed natural gas refueling stations,” notes Sembrot. “The maintenance is different and the technology is new,” he adds, so A-B contracted with Ryder Trucks to service the new tractors. Based on the Houston trial, the firm plans to replace 66 diesel trucks with Cummins engines. That represents about 12 percent of a 550 tractor fleet.

Carbon emissions are 23 percent less than diesel, which should help the brewery meet a goal to cut logistics emissions 15 percent by 2017, adds Sembrot.

Frito-Lay North America is another CNG proponent. Delivery trucks account for about one-third of F-L’s greenhouse gas emissions, and the company has purchased scores of electric vehicles for distribution in urban areas. Electric motors are impractical for longer hauls, and F-L has partnered with several builders of CNG fueling stations, guaranteeing minimum purchase amounts for those who build stations adjacent to its plants. About 14 stations have opened so far.

According to the Propane Education & Research Council, more than 143,000 propane-powered passenger vehicles and trucks are on America’s roads, with 70 percent growth predicted by 2020. In a shorter time frame, CNG has grown to a base of 135,000 vehicles. While the outlook for subsidies is hazy, it appears a critical mass of vehicles powered by alternative fuels is quickly approaching.