A Canadian egg-producer discovers over $0.5 Million in annualized savings
The egg industry is one that has changed over the years from many smaller producers to one that is highly centralized and more specialized. Trade associations and industry groups have successfully campaigned to improve the image of the egg away from the high-cholesterol image that had struck a blow to the industry. The growth in egg consumption over the past decade occurred primarily in egg products, rather than in shell eggs. While recent studies show that while total egg production has surpassed 8 billion dozen in 2014, almost 90% of that is for what is termed “table eggs”, with the remaining eggs going into the hatching market.
It is a combination of increased attention to consumer health, to environmental concerns and increasing attention from animal welfare groups that has the focus moving to designer and specialty eggs, examples including omega-3 eggs, organic eggs, range eggs and cage-free eggs. It is anticipated that demand for shell eggs and egg products will continue to grow. The food service sector is viewed as driving this demand. Production costs for egg production continue to grow, including energy. Recent studies show energy costs per egg produced rising over 40%.
Our client is a major egg producer in Canada with an annual energy consumption of over 1.3 million kWh at many of its facilities. One of their facilities had 40 year old refrigeration systems for both refrigeration and space cooling needs that contributed to approximately ~50% of their energy costs. Maintenance cost of these systems was also increasing constantly year over year.
We identified ways to help them reduce their refrigeration expenses and lighting expenses. First, based on energy data and site visits, energy end-use distribution was established. Our test facility was then benchmarked with other facilities internally to identify significant areas for improvement. Second, a detailed consumption analysis, including weather and production normalizations, was conducted to identify the true trend in energy consumption. A new refrigeration system was designed to replace ageing systems. The new system utilizes free cooling and high efficiency compressors and evaporators. Overall, a 34% reduction in energy costs was identified. We delivered a solid business case with an IRR of 20% to help them understand the opportunities that exist. We then started helping the client implement identified solutions.