Green shoots in the tech sector

SALES OF catering equipment increased again in 2013 and a new focus on energy efficiency and waste is a major reason why, says Andrew Capstick.

Foodservice Footprint P17 Green shoots in the tech sector Comment Features Features Foodservice News Analysis  Key Note catering equipment Andrew Capstick

 

 

 

 

 

 

 

 

The demand for equipment across the hospitality and foodservice sectors has been much improved recently, with total manufacturers’ sales rising every year from 2010. Last year sales were up 2.1% to £683m, following a 1.5% rise in 2012.

 

Some of this is down to a recovery from the severely depressed levels during the recession. Prices have also increased on the back of increases in material costs and inflationary pressures.

 

The sector is evolving too: new fast-food concepts are emerging all the time, coffee- shop food sales are booming and so are sales of street food. But there’s also been renewed focus on energy efficiency and waste and this is now a major trend.

 

Tax breaks, fuel savings, minimum standards and the phasing out of “harmful” technologies have all played a part. Take refrigeration equipment. According to Key Note’s recent Catering Equipment Market Report this has been the “stand-out sector” over the past five years, with sales rising by just over a fifth between 2009 and 2013.

 

This performance has been fuelled by demand for greater energy efficiency in new equipment. And this shows no signs of letting up, not least because of increasing government scrutiny of energy consumption and greenhouse gas emissions from this type of equipment.

 

Measures to tackle the environmental performance of commercial refrigeration were announced last summer at the annual Consumer Goods Forum (CGF) Refrigeration Summit, with the launch of a taskforce designed to accelerate the rollout of “natural” refrigeration systems.

 

At the summit, the CGF – a collective of about 400 businesses, including a number of the big supermarkets and food and drink manufacturers – signed a resolution committing themselves to start phasing out hydrofluorocarbon (HFC) refrigerants from 2015 in favour of natural refrigeration technologies that use gases such as ammonia or carbon dioxide which have been shown to have significantly less impact and are often more efficient.

 

Such systems are costly to deploy and many in the industry have raised concerns about their effectiveness in particularly hot climates. Nevertheless, the supermarkets have led the way in natural refrigeration deployment over the past few years as they seek to reduce energy costs and improve their corporate social responsibility policies. The result? The cost of the systems is in decline.

 

From 2015 the CGF’s efforts in phasing out HFC refrigerants will begin in earnest. As this progresses, equipment and deployment costs of natural refrigeration systems are likely to tumble further. This trend could prompt small and medium-sized businesses – a sector traditionally slow in adopting green technologies due to budget limitations – to look towards the technology, particularly if the energy savings are significant.

 

This expansion of sustainable product lines will happen in other areas too, with “smarter” and more efficient equipment (for example smart cookers that provide more real-time feedback and functions to streamline the cooking process) expected to be the main drivers.

 

There are significant opportunities for the development and marketing of more energy-efficient, water-efficient or space- saving equipment. Uptake has, until recently, been sluggish thanks to the downturn. A report by the energy-efficient refrigeration supplier Gram this year indicated that 55% of foodservice firms said the main barrier to uptake of green catering equipment was cost; this was followed by confusion (43%) and availability (30%).

 

As more and more equipment is released, price competition will accelerate and the sector will become more comfortable with the new tech. Alongside the expected ongoing economic recovery this will ensure strong annual growth in the green equipment segment in the coming years.

 

Andrew Capstick is an analyst at Key Note

 

 

 

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