A new 300-page report, “Water for Food & Beverage: Opportunities in Water Efficiency and Gaining Value from Wastewater” is the latest in GWI’s primary research series, a strategic guide to creating value from wastewater.
"Despite being highly fragmented, the food & beverage (F&B) industry is still one of the top three industrial water markets," said Lola Arowoshola, the report's chief author. "This study highlights the core challenges, such as market access and presence; the primary market drivers, which include sustainability goals, scarcity and brand reputation; and the many opportunities open to players participating in the market." It focuses on the industries that are most water-intensive, and those that generate highly loaded wastewater streams including breweries, distilleries, dairy manufacturers and the sugar industry.
The report’s findings-using research drawn from the larger commercial producers, with particular reference to the top 50 global companies in the sector-include nearly 40 in-depth interviews with water technology companies and major food and beverage companies, such as Cadbury, Coca-cola, Nestle and Carlsberg. The F&B industry, it says, is now an important growth market for water technology companies because it's at the sharp end of a number of global trends:
1) Global water demand is rising, against fixed supply, as is the awareness of the need for adequate wastewater treatment
2) Awareness of corporate risk for F&B companies is rising; paying attention to operational and environmental issues is vital to protect their brand reputation
3) As demand for F&B brands increases, so does demand for water technologies to provide safe and dependable water supplies
4) Water technologies can now provide value, allowing water stewardship to go hand in hand with profitability. Energy recovery, water efficiency and nutrient recovery ensure that investment will benefit the bottom line
The report predicts that these drivers will increase capital expenditure on water technology from $3.3 billion in 2011 to $6.0 billion in 2020, representing a compound annual growth rate of 6.7%. It shows that European and North American markets will be more sluggish, but emerging markets including China, India and Brazil will grow at double-digit rates.
However, the market’s future growth is not without challenges. The report warns that even within the F&B sector the plant locations, processing steps, ingredients and final consumables vary significantly between subsectors (meat, dairy, soft drinks, etc.) and consequently, the water and wastewater needs will differ at the plant level, making universal adoption of technologies less straightforward. Despite being open to new innovative technologies and solutions, F&B companies will still require technologies to be proven to minimize their operational risks.
Importantly, water treatment has become a crucial aspect of brand and image management: in maintaining product consistency across different plants/countries, in the implementation of social responsibility programs, and for the elimination of micro-pollutants to ensure food safety. “If food and beverage companies don’t follow global best practice in water efficiency, or if they don’t clean up their wastewater properly, then their brand can be permanently impaired within days,” said Christopher Gasson, publisher of Global Water Intelligence magazine.
Established players will always be best positioned in this market due to their existing relationships and process guarantees so a smaller company’s route to market will be either to partner with a global player or offer particular local knowledge and understanding to provide a better competitive advantage - thus gaining a toe-hold from which to build credentials.
The report describes the value proposition for business in F&B in three main areas:
1) Through increased water efficiency, in addition to gains in corporate social responsibility by reducing the amount of water companies use per unit of product there will be reduced water bills;
2) Reduced wastewater charges. Treating wastewater in-house rather than paying for the local municipal plant’s services could reduce bills, and the general tightening of regulations for effluent treatment will also encourage investment in technology; and
3) Energy recovery and other value from-waste propositions. Anaerobic wastewater treatment is now a stronger proposition than ever before and besides energy recovery, there are other emerging technologies that offer value from waste propositions. These include producing bio-polymers, using wastewater as a feedstock and recovering phosphorus from wastewater. The high biological load found in F&B waste means that it is one of the richest industrial waste streams in terms of the value-from-waste proposition.
Currently, the top ten countries in the F&B market in terms of capital expenditure on water technologies comprise over 60% of the market, and aerobic technologies, sludge management and filtration and softening systems account for the majority of this expenditure. However, it is expected that anaerobic systems (including biogas collection) and ultrafiltration- and microfiltration-based solutions will show the greatest growth between 2011 and 2020.