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As energy costs remain volatile and sustainability expectations intensify, food and drink manufacturers are being forced to rethink how they manage power. Tim Foster, director of energy for business at Conrad Energy, explores why the traditional 'fix and forget' approach to energy procurement is no longer fit for purpose and how businesses can instead use smarter, data-driven strategies to cut costs, reduce carbon emissions and build long-term resilience.

Energy has long been treated as an unavoidable overhead cost for food and drink manufacturers, typically managed through fixed-price contracts and revisited only when renewal approaches. But in today’s market, that 'fix and forget' approach is rapidly becoming outdated.

The sector is uniquely exposed to energy volatility. From refrigeration and cold storage to processing, bottling and packaging, energy consumption is both intensive and continuous. Even small fluctuations in electricity prices can have a material impact on margins.

Simultaneously, businesses face mounting pressure to decarbonise, driven by retailer requirements, investor scrutiny and ESG commitments. Scope 2 emissions reporting is becoming standard practice, while supply chain transparency is increasingly expected by both regulators and consumers.

The challenge, then, is no longer simply securing supply at a competitive rate – but rather managing energy as a dynamic, strategic input that underpins both profitability and sustainability. This is all the more important now with energy prices subject to such volatility, with the World Bank forecasting a 24% surge in prices this year due to the conflict in the Middle East.

The limits of fixed energy strategies

For many businesses, fixed-price contracts have long been the default approach. They offer predictability and simplicity, and a set unit rate over a defined period, typically one to three years. In volatile markets, that certainty can be appealing.

However, this model comes with clear limitations. By locking in a price, businesses lose the ability to respond to market movements. When wholesale prices fall, they cannot take advantage. When operational demands shift, the procurement strategy remains static. Reinforcing a passive mindset, energy becomes something that is 'bought and forgotten,' rather than actively managed. Without visibility into when and how energy is consumed, opportunities for optimisation are often missed. In a market that is increasingly shaped by real-time dynamics, this lack of responsiveness can come at a cost.

From passive procurement to active optimisation

A growing number of food and drink businesses are now rethinking this approach – adopting a more active, integrated strategy; one that combines purchasing, consumption and sustainability objectives.

At the centre of this shift is data. Half-hourly metering, real-time monitoring and advanced analytics provide a far more granular understanding of energy use. Businesses can see not just how much energy they consume, but when they consume it and the cost.

This visibility enables a move from passive procurement to active optimisation. Rather than simply buying energy at a fixed rate, businesses can begin to align their consumption with market conditions, adjusting usage patterns to take advantage of lower prices and lower carbon intensity.

Why granularity matters

Granular energy data is particularly valuable in the food and drink sector, where operational processes often have some degree of flexibility. While certain processes must run continuously, others, such as cleaning cycles, batch production stages, or pre-cooling, can often be scheduled with greater precision.

By identifying peak demand periods and understanding wholesale price signals, businesses can shift non-critical loads to times when electricity is cheaper. Increasingly, these periods also coincide with higher levels of renewable generation, meaning they are lower in carbon intensity.

For example, a manufacturer might adjust refrigeration cycles to avoid peak evening demand, or schedule energy-intensive processes during periods of high generation, delivering meaningful savings over time.

The principle is simple: use the right energy at the right time. But achieving it requires the visibility and flexibility that traditional procurement models do not provide.

Power purchase agreements: More than a sustainability badge

Power purchase agreements (PPAs) are becoming an increasingly important tool for food and drink businesses looking to address both cost and carbon. By securing electricity directly from renewable generators, PPAs offer long-term price stability while supporting the development of new clean energy capacity.

For brands with strong consumer-facing sustainability commitments, PPAs also provide a credible, transparent route to reducing Scope 2 emissions. They can strengthen relationships with retailers and enhance brand value in a market where environmental credentials are under growing scrutiny.

To maximise value, PPAs need to be integrated into a broader energy strategy, such as one that considers flexibility, demand patterns and complementary procurement approaches to ensure that energy use and generation are aligned with as high a degree of matching as possible.

Aligning cost and carbon

One of the most important developments in the energy landscape is the increasing alignment between cost and carbon. Historically, businesses often faced a trade-off: lower-cost energy options were not always the most sustainable, and vice versa.

Today, that relationship is changing. Periods of high renewable generation, such as windy nights or sunny afternoons, tend to correspond with lower wholesale prices: shifting consumption to these periods can reduce both costs and emissions.

By embedding flexibility into operations and aligning procurement strategies accordingly, food and drink businesses can turn sustainability from a requirement into a competitive advantage.

Taking the first steps

The first step to moving beyond 'fix and forget' is visibility. Access to detailed, half-hourly consumption data and the tools needed to interpret it is the foundation of optimisation. The second is a review of procurement strategy, moving away from fixed contracts towards flexible or blended approaches. The third is operational, identifying where flexibility exists within processes, and how they can be time -shifted to periods when energy is cheaper.

Finally, partnerships matter. Navigating energy markets, structuring PPAs and integrating on-site assets requires specialist expertise. Working with providers who can bring these elements together into a cohesive strategy is critical.

A strategic opportunity

Energy has become a strategic lever for transformation. Food and drink businesses that embrace data-driven, flexible approaches will be better positioned to control costs, reduce emissions and build resilience in an increasingly complex market.