Renewable Energy Drives Sustainability in the Food Industry

The paradigm shift in consumer behavior toward health-conscious and environmentally sustainable products presents a compelling opportunity for companies to implement renewable energy solutions, thereby enhancing their market position and competitive advantage.

The food and beverage industry is transforming consumer preferences. Market data indicates an accelerating shift toward sustainable, health-conscious products, with consumers increasingly allocating capital toward enterprises demonstrating environmental stewardship.

GlobalWebIndex’s comprehensive market analysis reveals that 61% of millennial consumers demonstrate significant price elasticity for environmentally sustainable products. This trend manifests across demographic cohorts, with 58% of Generation Z, 55% of Generation X, and 46% of baby boomers exhibiting comparable purchasing propensities.

A joint McKinsey-NielsenIQ analysis of the U.S. market—a key indicator of global trends—demonstrates that over 60% of consumers are willing to absorb premium pricing for sustainable packaging initiatives. The research also uncovered a compelling market dynamic:  “Products with claims related to sustainability achieved an average cumulative growth of 28% over the last five years, compared to 20% for products without such claims.”

World Economic Forum data underscores the sector’s environmental impact, attributing one-third of global greenhouse gas emissions to food production in 2022. This trajectory aligns with historical metrics: UN data from 2015 quantified food system emissions at 18 billion metric tons of CO2 equivalents, representing 34% of aggregate global emissions.

In this evolving landscape, sustainability initiatives have become imperative for maintaining market competitiveness. Research and Markets forecasts indicate sector revenue of $3.71 trillion in 2023, projecting a CAGR of 5.7% to reach $4.88 trillion by 2028.

The Central Role of Renewable Energy in Food and Beverage Companies

In response to shifting market dynamics, industry leaders are accelerating ESG implementation, with renewable energy emerging as a cornerstone strategy. The American Chamber of Commerce (AMCHAM) emphasizes the multifaceted benefits of clean energy adoption. Beyond carbon footprint reduction, it offers substantive economic advantages through decreased fossil fuel dependency and enhanced price stability. Furthermore, it strengthens corporate positioning as stakeholders increasingly prioritize environmental sustainability metrics.

Industry leaders have established aggressive carbon reduction targets, incorporating renewable energy transition strategies into their operational frameworks.

Nestlé’s strategic roadmap includes emissions reductions of 20% by 2025, 50% by 2030, and net-zero operations by 2050, benchmarked against their 2018 baseline of 113 million metric tons of CO2.

PepsiCo has implemented a comprehensive carbon reduction strategy targeting a 40% reduction in value chain emissions by 2030 relative to 2015, including a 75% reduction in direct operational emissions. Their strategic framework extends to net-zero operations by 2040, leveraging renewable energy as a critical enabler.

Mondelez International has articulated a net-zero value chain commitment by 2050. The conglomerate reported exceeding environmental targets in 2021, achieving a 24% reduction in manufacturing emissions, 33% in water utilization, and 31% in waste generation. The organization identifies renewable energy as crucial to sustaining this trajectory.

Grupo Bimbo’s environmental strategy targets net-zero emissions by 2050, with intermediate objectives including eliminating indirect emissions by 2025, reducing direct emissions by 50%, and reducing value chain emissions by 28% by 2030, primarily through renewable energy procurement agreements (PPAs).

Beyond market leaders, emerging players in specialized market segments are also executing renewable energy strategies.  For instance, Goya Foods, a leading provider of authentic Latin cuisine in the United States; GrandyOats, which produces small batches of organic granola, muesli, trail mix, roasted nuts, and hot cereals; HimalaSalt, a seller of Himalayan salt certified as organic, non-GMO, and gluten-free; and Farmers Hen House, which produces, processes, and markets organic, pasture-raised, and free-range eggs, have all incorporated clean energy into their production processes. Their motivation goes beyond cost considerations, aligning closely with their ESG policies.

PPAs: Strategic Cost Management Through Energy Procurement

Power Purchase Agreements (PPAs) represent sophisticated financial instruments enabling organizations to secure long-term price stability and competitive energy procurement strategies.

While these financial instruments have demonstrated historical efficacy, 2022 marked an inflection point amid unprecedented energy price volatility catalyzed by geopolitical tensions in Eastern Europe. Global natural gas prices reached an apex of $9.44 per MMBTU, necessitating strategic recalibration of energy procurement.

Despite inflationary pressures, the International Renewable Energy Agency’s (IRENA) analysis reveals a countercyclical trend in renewable energy costs during this period. Global weighted average costs for solar electricity demonstrated a 3% reduction, while onshore wind installations achieved a 5% cost optimization. IRENA’s analysis quantifies aggregate cost avoidance in the global electricity sector at $520 billion through renewable deployment.

Pexapark’s June market intelligence indicates European PPA valuations averaged €50.8 per MWh in May, with Iberian market metrics reaching €56.08 per MWh in June. This correlates with accelerated market adoption, evidenced by 32 executed PPAs in Europe during May 2023, aggregating 1,537 MW of renewable capacity—representing a 14% month-over-month increase in contract execution.

In Latin America, the adoption of PPAs is also on the rise. For example, Atlas Renewable Energy was listed by BloombergNEF as the top clean energy developer for corporate buyers in Latin America in 2021. Globally, it ranked sixth, with over half a gigawatt contracted by private companies in the region. Since then, Atlas has continued to grow, offering various PPA contracts. Its most notable agreement, signed in late 2023, was Latin America’s largest PPA. This agreement involves constructing the 902 MWp Vista Alegre solar park in Brazil, which will supply clean energy to Alumínio Brasileiro (Albras), preventing 2.4 million metric tons of CO2 emissions over 21 years.

Sustainable Energy and Competitiveness for a Sector in Growth and Transformation

The food and beverage sector stands as a primary contributor to global carbon emissions, accounting for approximately one-third of aggregate CO2 output. This environmental impact is closely tied to the industry’s substantial energy needs – according to the International Renewable Energy Agency (IRENA), the food and agribusiness industry consumes around 30% of the planet’s energy production. While market projections indicate a continued growth trajectory, these significant environmental footprints have sparked emissions reduction imperatives, driven by both corporate environmental stewardship and evolving consumer preferences for sustainable products.

The implementation of renewable energy in the food industry is gaining unprecedented momentum, driven by both market opportunities and environmental imperatives. According to Introspective Market Research, the sustainable food market is projected to grow from USD 1066.2 million in 2023 to USD 1,945.38 million by 2032, with a compound annual growth rate (CAGR) of 6.91%. To capitalize on this growth, organizations are increasingly adopting structured renewable energy procurement strategies that serve multiple objectives: reducing operational carbon footprints, enhancing corporate reputation, and securing price stability in volatile markets. This strategic approach not only advances sustainability goals but also creates lasting competitive advantages by aligning financial performance with environmental stewardship in an evolving market landscape.

This article was created in partnership with Castleberry Media. At Castleberry Media, we are dedicated to environmental sustainability. By purchasing carbon certificates for tree planting, we actively combat deforestation and offset our CO₂ emissions threefold.