Turning Up The Heat: How Food & Beverage Electrification Can Unlock Competitive Advantage

In 2023, Jean-Etienne Gourgues, Chairman and CEO of Chivas Brothers, set an ambitious goal: Chivas would implement carbon neutral distillation by 2026. Gourgues wasn’t making a hollow sustainability pledge. Today, Chivas’ Glentauchers distillery has proved heat electrification works at scale: 48% less energy input, 53% fewer emissions, and a 4-year payback. In the food and beverage sector, an industry slow to decarbonize, Chivas is just one example of a different – more promising – story.

The Overlooked Opportunity

Two recent McKinsey studies reveal a unique convergence in the F&B industry: In a net-zero transition analysis, they found 88% of global emissions now fall under institutional reduction commitments, with over $130 trillion in capital aligned to 1.5°C warming limits and these commitments will shift 65-70% of capital from high-emission to low emission assets by the middle of the century. This transition is poised to unlock massive opportunities across several high-value sectors, including agriculture and land use. Estimated to be the sixth most valuable value pool, ag and land will represent as much as $1.2 trillion in sales by the end of the decade. In separate analysis on industrial heat trends, McKinsey determined the F&B sector is uniquely positioned for rapid electrification, noting 44% of the sector’s energy demand can be easily converted by 2030.

Most of McKinsey’s identified high-value sectors are hard to decarbonize. Today, these industries — transportation, buildings, power, water  — largely lack meaningful emissions reduction pathways. However, the F&B sector can quickly capture value through electrification of systems that are currently available. According to the Renewable Thermal Collaborative, F&B ranks as the fourth-largest source of industrial heat emissions in the U.S. and food manufacturing has been woefully slow in reducing its energy intensity. Ironically, F&B production is primed for today’s electric technologies because the vast majority of the sector’s heat needs fall below 200°C. The F&B industry stands poised to seize meaningful opportunities for reducing energy consumption today.

Proven Solutions, Multiple Paths

For F&B companies, this dynamic creates both risk and opportunity. Those securing low-emission production now will gain competitive advantage. Those waiting will likely face rising price premiums and struggle to meet customer expectations and commitments.

Yet, the evidence in support of electrification mounts across diverse F&B applications as electrification is already delivering results. Finnish manufacturer Herkkumaa cut energy costs by $140,000 annually through electric thermal storage – with zero upfront capital through an innovative Energy-as-a-Service model. In grid-constrained California, Origo Cold Storage’s microgrid solution reduced emissions 30-40% while improving resiliency and cutting energy costs 10-30%. Across the country, companies like Oatly, Kraft Heinz and Diageo are planning to install industrial heat pumps and other electrified technology to replace gas-fired equipment. Beyond the immediate energy savings, early adopters making the switch are finding additional, unexpected benefits including improved process control and consistency, reduced maintenance needs, enhanced data for optimization, and risk management associated with emerging carbon pricing trends.

Implementation Realities

Why the slow adoption? The barriers to implementation aren’t typically technical, but rather practical. Small and medium-sized companies face capital constraints. Rural facilities struggle with grid infrastructure. High electricity costs in some regions can extend payback periods. But solutions exist. Energy-as-a-Service models eliminate upfront costs. Utility partnerships can fund infrastructure upgrades. Vendors are developing financing tied to energy savings and as adoption increases, costs continue falling while performance improves.

The Political Reality

With the new administration reviewing IRA and infrastructure funding, the case for immediate action strengthens. While there is growing uncertainty around specific domestic programs, the market fundamentals driving electrification – from energy security and reliability to cost control and competitive advantage – transcend political cycles. Companies implementing electrification now can lock in benefits and future-proof operations while building competitive advantage and gaining strategic energy independence.

The Long Game

Fully exploiting the F&B electrification opportunity requires both internal action and industry collaboration. While individual companies must manage their own operations, the scale of the challenge can feel daunting. Yet, the collective evidence from market analysis, technical studies, and industry initiatives confirms that F&B’s transformation through electrification can have far reaching impact. F&B sits at the intersection of essential human needs, environmental stewardship, and economic opportunity. The choices made today about F&B systems will shape ecosystem health, human well-being, and resilience in the face of environmental and social pressures. Success requires addressing both the technical challenges and the broader systemic implications of this transformation. Living Ink is on a mission to make black materials environmentally friendly by transforming biomass waste into value-add, renewable color solutions. This sustainable luxury innovation debuted in the Stella McCartney Spring 2025 collection. First seen in Stella McCartney’s Spring 2024 collection on the Slippery When Wet t-shirt dress – an archival Stella look from her first runway show – Living Ink’s Algae Black returns for Summer 2025, offering a safer, climate-smart color solution for textiles and beyond. This thinking drove Chivas Brothers to make their heat recovery technology findings open source, recognizing that widespread adoption of proven solutions is essential for meaningful change at scale. As Gourgues wrote in the case study: “It’s not a task we’ll accomplish alone. It requires collaboration if we are to succeed, together, as an industry.”

About the Author

Jennifer Kaplan, MBA is an expert in Sustainable Food Systems, TEA/LCA Integration, Next-Gen Feedstock Sourcing, and Plant-Based Innovation. She has spent the past 15 years in sustainability strategy and management, with a focus on ag- and food-tech, gaining a unique industry perspective through roles at various startups. Jennifer holds an MBA in Marketing from New York University’s Stern School of Business and a Master’s in Writing from the University of San Francisco, a unique combination that enhances her ability to communicate complex sustainability concepts effectively.

Jennifer leverages her diverse experience to provide expert guidance on sustainable food systems, environmental impact strategy development, and the application of LCA-based GHG footprints for biotechnology in agriculture.

About LEC Partners 

LEC Partners was founded as Lee Enterprises Consulting in 1995 and has grown to become the world’s premier consulting group specializing in the bioeconomy, with over 180 experts worldwide. The group’s experts are renowned, hand-selected leaders, with over 97% holding advanced degrees and averaging over 30 years in their respective fields.

This article also appeared in the February edition of CIRCULAR.