Green is here to stay. It’s the color of savings when utilities are conserved and production is peaked.

Keystone Foods’ new 185,000-sq.-ft. processing plant in Gadsden, AL will produce fully cooked chicken for foodservice customers. The project is expected to be complete in September 2009. Source: Stellar.

The weakened economy has slowed plant construction projects in 2008 compared to 2007, and total new, expansion, renovation and distribution/storage projects were also down a little from 2005 and 2006 data, according to Food Engineering’s 32nd Annual Plant Construction Survey (see graph below). The survey on pages 50 to 71 lists all projects valued at $1 million or more in the planning stages, underway or completed in 2008.

New projects decreased by 23% in 2008 compared to 2007 (195 in 2008 and 253 in 2007), were down slightly (4%) compared to 2006, but were up 22% from 2005. Total projects in 2008 (493) were down 19% compared to 2007 (613), decreased slightly from 2006 (506), and were down 5.5% compared to 2005 (523).

Cold storage, warehousing and distribution center project numbers include all new construction, expansions and renovations in this arena. While projects dedicated to warehousing and distribution in 2008 (60) were down 36% compared to 2007 (94), they were up 122% over 2006 (27). In 2008, warehouse/DC projects comprised 12% of the total number of projects; in 2007, 15.3% and in 2006, 5.3%.

Nestlé Waters North America’s new Breinigsville, PA facility received USGBC LEED Gold Certification for sustainability. Located near Allentown, PA, the plant constantly monitors water, chemical and energy use and solid waste production per 1,000 liters of water produced at the facility. Source: Haskell.

Save and conquer

Today, squeezing savings out of new projects and existing plants/processes is paramount. According to architectural and engineering firms interviewed for this article, there is a strong consensus that food and beverage processors want to reduce energy costs, increase throughput, improve product quality and be “green” in their customers’ eyes. The catch is, being green has to pay for itself.

“Reducing energy consumption and [maintaining] sustainability are two aspects that play a major role in the design and operation of facilities,” says Harlan VandeZandschulp, president of Gleeson Constructors LLC. “Environmental friendliness and energy-efficient construction has become a marketing tool [for processors] as well as a vehicle for increasing the bottom line.”

According to Haskell Director Darryl Wernimont, the slow economy is fueling two major trends in the food and beverage industry. First, sustainability-whether it is associated with packaging, energy optimization or formal LEED (Leadership in Energy and Environmental Design) certification programs-will keep growing. Second, with limited capital, many processors are focusing on facility modifications, optimization and relocations as opposed to large greenfield projects.

Economy dictates investments

The only viable projects at present seem to be those that provide a value-added product that will return investment very quickly, or products that are necessary to maintain franchises, says William Vaughn, principal at VCP&A. “The economy is driving the investment decisions,” he adds.

Vince DiPofi, senior vice president at SSOE, says many processors are re-evaluating needs versus wants. Capital is at a premium, and what is spent must be spent wisely and have a good return.

In many cases, the “needs versus wants” discussion translates into selecting an expansion project over a greenfield site, says Tyler Cundiff, business development at Gray Construction. But, he says, it is a good time for expanding the size of refrigerated warehouses to accommodate more prepared frozen meals as consumers opt to economize by eating in more often.

With expansions, there is a continued trend to increase focus on asset utilization for existing systems, says Donald C. Oberlies of Alberici Constructors. In addition, line expansion projects continue to lengthen the time between cleanup/sanitation and/or product changeovers.

To keep costs down, processors are resorting to skidding and modularization of equipment, says Jonathan Marshall, VP-food and beverage business stream leader at Faithful + Gould. In unit ops and utility systems, this method allows equipment to be pre-commissioned off site to reduce in-plant construction and commissioning activities.

To get the production and process improvements rolling, much more attention is being given to value engineering, says Allen Baiamonte, project manager with Burns & McDonnell Engineering Co. Owners and engineers are looking to use networking and technology to optimize the materials and labor that go into the installation. For example, the use of smart devices that are Ethernet communications capable instead of traditional hardwired homeruns back to a remote cabinet or central I/O point.

Creating automation solutions that increase capacity and improve flexibility are keeping CH2M HILL’s lean manufacturing consultants and lean sustainability implementation teams very busy, says John Anderson, business development manager. Processors are placing more emphasis on flexible production and packaging lines, enabling them to respond more quickly to consumer demands and to multi-task their equipment whenever possible.

Utility monitoring systems are becoming a popular solution to allocate energy consumption to specific manufacturing lines or products, says Joe Bove, Stellar’s VP of design, food & beverage/distribution facility services. This helps the processor ensure that it’s covering the cost of goods sold, including labor and utility burden depreciation. In addition to monitoring energy, these systems will be useful in the future when “green legislation” will require allowed emission ratings and carbon credit programs.

Investing in food safety

Jack Michler, VP-preconstruction services with Miron Construction, says processors are emphasizing food safety systems and the implementation of safe quality foods (SQF) management or similar food safety systems. These projects involve renovation or replacement of existing, outdated production facilities to comply with current and forthcoming standards.

 “No one is naive enough to think they can get away without doing these projects,” adds William Sander, senior VP/project manager, Hixson A&E. Food safety-related projects keep in-house maintenance and engineering teams busy when other projects slow down. At the same time, he sees capacity and production/process improvements taking center stage in construction projects as processors fill the void left by other smaller processors that have ceased operation.

Even security is becoming more automated to improve food safety. According to Bove, food processors are installing more fencing, cameras and card readers that screen employees when they enter or exit the facility (logging in/logging out). In addition, processors are using GPS-based employee location systems to ensure workers are in the right work zone.

Energy costs dip

Last year’s wake-up call on energy prices should be ample warning for the future. The memory of the recent pain hasn’t gone away, and most processors anticipate rising energy costs over the long term, says DiPofi. However, the payback on energy conservation measures was tough before and is even tougher now to justify.

Interstates’ Director of Business Development David Krahling says many of his clients want to be well positioned for the future  For those with a retail brand, committing  to energy efficiency is partly about doing the right thing and partly because it plays well with their customers.

“I believe that uncertainty over energy costs has not affected the manufacturer’s commitment to energy efficiency,” says Karl Landgraf, principal at The Dennis Group. “Companies either fully embrace energy-efficient design because they recognize the payback and the advantage to their corporate image, regardless of first time cost, or they are fixated on minimizing the cost of construction and only adopt those strategies that have an immediate or very short term (e.g., six months) payback.”

Besides sustainability, a good reason to conserve energy is budget, says Sander. When the costs to buy and transport oil, petroleum and gas were higher, his clients definitely were more interested in finding ways to reduce costs. Process-driven projects typically have more risk factors and inherently are more complex than energy-driven projects. The cost savings of energy reduction projects, says Sander, go straight to the bottom line, but the unpredictable nature of energy pricing has complicated the ROI considerations.

Wernimont thinks the industry has only scratched the surface when it comes to plant energy optimization. Cogeneration, carbon footprints and facility optimization will continue to be key methods to cut energy costs. But, according to Gary Smith, chairman of Webber/Smith Associates, one cogeneration study/project that was expected to start in 2008 never went forward when energy prices came down.

While a cogen project may seem daunting, the long-term benefits can pay off. Ten years ago Maple Lodge Farms (Norval, ON), which processes 300,000 chickens daily, needed to replace aging boilers and reduce its electric power consumption, which peaked at 9.5 MW in summer months. Alan Wassens, Maple Lodge engineering/services manager, saw a solution to both problems in installing a cogeneration system. Wassens wanted to generate about 5 MW of electricity (representing half the plant’s peak demand), 4 million pounds of steam weekly at 125 psig and about 125 million gallons of hot water annually. He installed a Solar 5.2 MW natural gas turbine/generator to meet the electrical needs and an ERI heat-recovery system steam generator to meet the plant’s steam requirements. Still in operation today, the system cut electrical power costs from $0.065 to $0.05 per kWh and reduced the annual consumption of natural gas by 680,000 cubic meters.

Considering conservation

Last year saw an increase in construction material costs, primarily due to the cost of fuel and raw materials, says Cundiff. Surprisingly, construction material costs have remained high in spite of lower energy prices.

Fortunately the same model doesn’t apply to shipping the materials. “Eight months ago when fuel prices were higher, we were running into a situation where our vendors would not guarantee freight to the project,” says Wyatt Payne, Stellar VP of construction, distribution and facility services. Shippers didn’t want to get saddled with the high costs of fuel to deliver materials to the site. Now that fuel prices have come down, the shippers have returned to guaranteeing freight prices, says Payne.

Payne sees some energy-conserving opportunities with new uses for some building materials. For example, he visited a California operation that makes insulated metal panels for lining the walls of low-temperature facilities. The manufacturer is investigating the possibility of using these panels for roofs by laminating solar film to the panels.

“Intelligent buildings” is a trend that Humerto Lopez says is moving forward. Lopez, Stellar divisional VP, food and beverage process engineering, says building management systems can be used to monitor rooms and equipment to pinpoint areas of high energy consumption in the facility. With these systems, processors can determine areas with leaks, excess energy usage, motors that need to be changed, processes that should be modified, etc.

Many owners still are committed to environmental sustainability, but they are choosing to implement the methods that really demonstrate cost savings, continues Lopez. Some processors apply the concepts of LEED, but don’t apply for certification due to the cost.

LEED: Does it fit?

The problem with LEED, says Tim Rice, Burns & McDonnell construction manager, is a gap between the LEED standards and food and beverage manufacturing. As far as a manufacturer is concerned, most LEED standards affect buildings and not necessarily process or production. Several of Rice’s projects don’t involve new facilities so LEED certification is more difficult to obtain.

“LEED increases time and money required for a project,” says Steven Peterson, VP with Case, Lowe & Hart. “Building performance can be improved without LEED requirements.”

Others, too, are skeptical. “LEED is simply a way to pay an additional amount for the ‘best practices’ and ‘efficient’ designs that A&E firms have been designing to for the last 50 years,” says Jim Bales, senior project manager facility development at Food Facility Engineering.

Just how much extra does LEED certification cost? Vaughn thinks it typically adds 3% to project costs. Mike Golden, executive vice president, Food Tech LLC, thinks LEED certification can run as high as 10%. But he adds, “The reality is that most food facilities are extremely energy efficient, recycle, use recycled materials, are water efficient, have some degree of sustainability and have struck air quality controls. So LEED certified or not-the food industry is head and shoulders above most others.”

Cundiff, however, thinks food and beverage industries are still behind other industries in seeking LEED-certified projects, although momentum is gaining. Cost is still the big issue, but he has found that basic LEED certification adds very little or no additional cost to a project.

Food and beverage customers are continuing to seek “green” or “sustainable” design ideas that make sense for their operation and facility, adds Smith. Since the LEED certification was developed primarily for commercial spaces, food facility owners are showing interest in incorporating LEED credit ideas; however, they are voicing reservations about the cost of LEED certification, especially when many of the credits may not be achievable. Food facility owners also are voicing concerns that LEED does not provide adequate credits for incorporating process-related energy/water conservation methods, says Smith.

According to The Dennis Group Principal Dan McCreary, LEED can be challenging in food and beverage design because it is difficult to take that which is ultimately sustainable (food production), and not make it less sustainable via processing, packaging and distribution activities. Much of wholesome and safe mass food and beverage processing is centered on heat exchange, an inherently inefficient principle.

For these reasons, McCreary doesn’t see too many processors seeking LEED Gold certification without a quantifiable economic return. While LEED Version 2.2 standards are not always a good fit for industrial projects, LEED 2009 may be better. McCreary adds, “It may behoove the USGBC to consider the needs of specific industries as it further develops the LEED point system.”

More specifically, the challenge continues to be with Energy and Atmosphere Credit 1-Whole Building Energy Simulation. The difficulty is in establishing proper baselines to compare achieved efficiency and in evaluating the impacts of process energy versus building energy, according to David Dixon, executive VP of the Facility Group. The discussion is not final and will continue with the roll out of LEED 2009 and ASHRAE 90.1-2007.  In addition, reliance on the innovation credits for more energy efficient food processing also will be affected. The discussion in the food industry is striking a balance between force fitting our process and facility designs to LEED and doing the “right thing right” regardless, adds Dixon.

When LEED and the right things are done, the result is a sustainable plant. Stay tuned for debut of Food Engineering’s Sustainable Plant of the Year award in the September issue. A food or beverage plant will be featured that exemplifies reducing a plant’s impact on the environment and decreasing its operational costs.  

The following companies assistedFood Engineeringin compiling this survey:

Alberici Constructors
Donald C. Oberlies

The Austin Company
Robert Graham

Andrew W. Booth & Associates
Curtis Manns

Burns & McDonnell Engineering Co.
Paul Menne

Case, Lowe & Hart Inc.
Steven Peterson

John Anderson
The Dennis Group
Alyssa Boudreau

A. Epstein and Sons
Noel Abbott

Facility Group
David Dixon

Faithful + Gould
Jonathan Marshall

Food Facility Engineering Inc.
Jim Bales

Food Technology Structures
Mike Golden
Gleeson Constructors LLC
Harlan VandeZandschulp

Gray Construction
Tyler Cundiff

Darryl Wernimont

Bill Sander

David Krahling

Middough Inc.
James Bingham

Miron Construction Co. Inc.
Jack Michler
POWER Engineers
Jana LaRosa

Shambaugh & Son
Mark Shambaugh

Vince DiPofi

Joe Bove

Stuart Kendig

William O. Vaughn

Webber-Smith Associates
Gary Smith