{"id":7504,"date":"2022-10-27T10:01:24","date_gmt":"2022-10-27T08:01:24","guid":{"rendered":"https:\/\/peruza.com\/?p=7504"},"modified":"2022-10-27T10:04:02","modified_gmt":"2022-10-27T08:04:02","slug":"global-energy-crisis-impact-on-food-processing-industry","status":"publish","type":"post","link":"https:\/\/peruza.com\/blog\/news\/global-energy-crisis-impact-on-food-processing-industry\/","title":{"rendered":"Global Energy Crisis Impact on Food Processing Industry"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"7504\" class=\"elementor elementor-7504\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-d269616 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"d269616\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-767f70c\" data-id=\"767f70c\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-e7b7508 elementor-widget elementor-widget-text-editor\" data-id=\"e7b7508\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>In terms of energy supply, the world is coming to a crossroads. Countries have continued to utilize coal, oil, and gas extensively to power their economy in spite of decades-long recommendations to lessen dependence on fossil fuels. <b>In addition to increasing carbon emissions that contribute to global warming, the burning of fossil fuels has also resulted in a globalized world with highly concentrated food and energy networks, making them particularly vulnerable to disruption. <\/b>The war in Ukraine highlights how our world&#8217;s energy and food systems are not diverse enough to support resilient livelihoods. People all throughout the world are unable to handle the escalating costs as energy, fertilizer, and food prices rise. As a result, the rise in energy prices is having an unprecedented impact on the humanitarian crisis and food shortages.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d30cca8 elementor-widget elementor-widget-heading\" data-id=\"d30cca8\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">The political situation has increased the pressure on the world's food supply chains<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-457bf2e elementor-widget elementor-widget-text-editor\" data-id=\"457bf2e\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Food prices have increased steeply over the last two years and appear set to go higher following Russia\u2019s invasion of Ukraine, putting millions of people at risk. While there are many causes of the current difficulties in the food supply chains, it is important to remember that the global energy crisis is also a crucial factor.\u00a0<\/p><p><a href=\"https:\/\/docs.wfp.org\/api\/documents\/WFP-0000138289\/download\/\">The World Food Programme <\/a>estimates that the number of people experiencing severe food insecurity more than tripled between <b>2017 and 2021 and may rise another 17% this year to 323 million<\/b> as a result of Russia&#8217;s conflict in Ukraine. The recovery in demand following the Covid-19 crisis, severe weather impacts on supply, an increase in trade restrictions on agricultural goods, and quickly rising input costs, particularly for energy and fertilizers, have all contributed to the spike in food prices since mid-2020.<\/p><p>Food supply chains, markets, and related inputs (agrochemicals, fertilizer, fuel, feed, capital, and labor) are all interconnected globally, which means that seemingly minor supply disruptions in one area or industry can have disastrous effects on another.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-fd2fb59 elementor-widget elementor-widget-heading\" data-id=\"fd2fb59\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">The developing food supply crisis shows how energy and food supply security are linked<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7f12ede elementor-widget elementor-widget-text-editor\" data-id=\"7f12ede\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Energy is used for a variety of things in the food and agriculture industries. <\/span><b>A few examples of direct energy use are the power used for automated irrigation systems, the gasoline used for farm equipment, and the energy needed for various steps in food processing, packing, shipping, and distribution. <\/b><span style=\"font-weight: 400;\">Since the production of pesticides and mineral fertilizers requires a significant amount of energy, their use results in significant indirect energy consumption. Direct and indirect energy expenditures can make up <\/span><a href=\"https:\/\/www.iea.org\/commentaries\/how-the-energy-crisis-is-exacerbating-the-food-crisis\"><span style=\"font-weight: 400;\">40% to 50% of the total variable costs of cropping in advanced countries like the United States<\/span><\/a><span style=\"font-weight: 400;\">, while the percentage varies greatly between regions and depends on things like weather and crop kinds. Therefore, increasing energy and fertilizer prices unavoidably result in greater production costs, which in turn result in higher food prices.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-408be1e elementor-widget elementor-widget-image\" data-id=\"408be1e\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"534\" src=\"https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/pexels-pixabay-209251-1-1024x684.jpg\" class=\"attachment-large size-large wp-image-7486\" alt=\"factory\" srcset=\"https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/pexels-pixabay-209251-1-1024x684.jpg 1024w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/pexels-pixabay-209251-1-300x200.jpg 300w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/pexels-pixabay-209251-1-768x513.jpg 768w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/pexels-pixabay-209251-1-1536x1026.jpg 1536w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/pexels-pixabay-209251-1-400x267.jpg 400w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/pexels-pixabay-209251-1-800x534.jpg 800w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/pexels-pixabay-209251-1.jpg 1966w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2dba142 elementor-widget elementor-widget-text-editor\" data-id=\"2dba142\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Source:<a href=\"https:\/\/www.pexels.com\/photo\/building-business-ceiling-empty-209251\/\"> Pexels<\/a><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f537c93 elementor-widget elementor-widget-heading\" data-id=\"f537c93\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Will energy bills force food processing factories to go dark?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f9637be elementor-widget elementor-widget-text-editor\" data-id=\"f9637be\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">By the end of\u00a0 2022, the previous state of affairs for food processing and logistics, as well as for ingredients, suppliers, labor, and other factors, may be long gone. The <\/span><a href=\"https:\/\/peruza.com\/blog\/general\/3-big-challenges-that-the-food-processing-industry-is-facing-in-2022\/\"><span style=\"font-weight: 400;\">food industry is facing new normal<\/span><\/a><span style=\"font-weight: 400;\">, that\u2019s for sure. And the energy crisis that is just around the corner, manufacturers are facing more and more pressure.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">First and foremost, since the production of food and beverages is an energy-intensive operation, this sector is particularly vulnerable to problems caused by energy shortages. Energy is required at every stage of the supply chain, typically in several forms (such as fuel and electricity), therefore direct and indirect energy expenditures can make up as much as <\/span><a href=\"https:\/\/www.iea.org\/commentaries\/how-the-energy-crisis-is-exacerbating-the-food-crisis\"><span style=\"font-weight: 400;\">40% to 50% <\/span><\/a><span style=\"font-weight: 400;\">of a company&#8217;s total variable costs.<\/span><\/p><p><b>However, there are other factors at play in our current situation that makes the food and beverage industries financially stressed.<\/b> The dilemma is exacerbated by a trickle-down effect from increasing oil and natural gas costs that affects other materials these businesses use. Here are the main components, that build the rising expenses:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-358ee9a elementor-widget elementor-widget-heading\" data-id=\"358ee9a\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Fertilizers<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0a3bfa8 elementor-widget elementor-widget-text-editor\" data-id=\"0a3bfa8\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Regarding farms, those that grow agricultural products are very dependent on fertilizer, the price of which has increased due to the need for ammonia, which is virtually entirely derived from natural gas. Since mid-2020, the cost of fertilizer has more than tripled, <\/span><a href=\"https:\/\/www.farmprogress.com\/commentary\/why-high-fertilizer-costs-could-linger\"><span style=\"font-weight: 400;\">hitting its highest point<\/span><\/a><span style=\"font-weight: 400;\"> since the recession of 2008 and 2009. <\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ad49617 elementor-widget elementor-widget-heading\" data-id=\"ad49617\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Plastics<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-052f347 elementor-widget elementor-widget-text-editor\" data-id=\"052f347\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Plastics are another resource that food and beverage business owners regularly require \u2014 usually for packaging \u2014 and they have become more expensive as a result of the demand for petrochemicals in their manufacturing. The rising expense of plastic has made the possibility of switching to more environmentally friendly packaging alternatives like cardboard, paper, and bamboo, whether they are used as bags, wrappers, clamshells, or in other capacities, even more appealing.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8789632 elementor-widget elementor-widget-heading\" data-id=\"8789632\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Carbon dioxide<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1f83133 elementor-widget elementor-widget-text-editor\" data-id=\"1f83133\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The vital byproduct of carbon dioxide (CO2) is also in shorter supply as a result of fertilizer being more expensive and scarce, making it yet another necessary resource that is now more expensive for the food and beverage industries. CO2 is essential for many product categories since it is used in a range of applications, from preserving packaged goods&#8217; freshness when they are sealed in containers to giving carbonated beverages their fizz. In order to achieve the world&#8217;s energy and climate goals, a combination of technologies known as carbon capture, utilization, and storage (CCUS) may be used. CCUS entails CO2 capture from significant point sources, such as industrial facilities or power plants that burn either fossil fuels or biomass as fuel. Now it\u2019s time to think about this kind of solution more than ever. <\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-04aaea7 elementor-widget elementor-widget-image\" data-id=\"04aaea7\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"800\" height=\"533\" src=\"https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/Peruza-DIO_27-1-2-1024x682.jpeg\" class=\"attachment-large size-large wp-image-7491\" alt=\"\" srcset=\"https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/Peruza-DIO_27-1-2-1024x682.jpeg 1024w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/Peruza-DIO_27-1-2-300x200.jpeg 300w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/Peruza-DIO_27-1-2-768x512.jpeg 768w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/Peruza-DIO_27-1-2-1536x1024.jpeg 1536w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/Peruza-DIO_27-1-2-2048x1365.jpeg 2048w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/Peruza-DIO_27-1-2-400x267.jpeg 400w, https:\/\/www.peruza.com\/wp-content\/uploads\/2022\/10\/Peruza-DIO_27-1-2-800x533.jpeg 800w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5e5e912 elementor-widget elementor-widget-text-editor\" data-id=\"5e5e912\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Source: <\/span><a href=\"https:\/\/peruza.com\/\"><span style=\"font-weight: 400;\">PERUZA<\/span><\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5ad24c2 elementor-widget elementor-widget-heading\" data-id=\"5ad24c2\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Final thoughts<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4b15142 elementor-widget elementor-widget-text-editor\" data-id=\"4b15142\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">As the world is facing new challenges and the global energy crisis is just around the corner, as the winter arrives, it\u2019s time to look over your expenses and ways to optimize them. And one of the solutions is automation. It will make the process more efficient and productive.\u00a0<\/span><\/p><p>If you\u2019re interested in learning more about how PERUZA can help you automate the manufacturing process, and implement some on-site food processing equipment, feel free to email us at info@peruza.com, and we\u2019ll gladly discuss the possibilities of working together to boost the productivity of your business, no matter the time of the year!<\/p><p>\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>In this blog post, you will learn about how the global energy crisis will impact the food processing industry.<\/p>\n","protected":false},"author":19,"featured_media":7495,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-7504","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.7 - 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