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General Mills Focuses On Energy Efficiency, Hopes to Save $25M a Year

(Credit: General Mills)

General Mills is one of the world’s biggest and best-known food processors. It operates in more than 100 countries spread out over six continents, and it owns such brands as Betty Crocker, Cheerios, Nature Valley, Pillsbury, and Yoplait. Since the early 2000s, it has been on a mission to reduce its environmental footprint, which includes using less energy at its plants and running those same facilities on cleaner fuels. 

In 2012, General Mills set a 10-year goal to improve energy efficiency in the company’s 26 largest US-based plants by 20%. But the US Department of Energy said that the company had achieved that goal well ahead of this year.

“We started this journey by looking within our walls back in 2005 and have extended our commitments and work across our entire value chain,” John Church, chief supply chain officer and global business solutions officer at General Mills, said. “We have to own the entirety of our impact, and this is one of the many ways General Mills is working to reduce our impact on the environment.” 

What steps did General Mills take?

The company says that its 20% improvement represents more than 2 million MMBTUs of energy (combined electricity and natural gas) between 2012 and 2018. In fiscal 2018, more than 60 energy efficiency and energy reduction projects were completed across the company. These improvement projects saved over 12 million kWh and delivered $4.8 million in cost savings. It also avoided nearly 6,000 metric tons of CO2 emission-equivalents.

The focus has been on energy efficiency. It took part in the Energy Department’s Better Plants Challenge, which says that energy is a variable cost, and it is often industrial users’ most considerable expense — sometimes 10% of their overhead. Most manufacturing facilities want to cut this cost, and they have deployed technologies to do so. The Energy Department says that energy costs can be reduced by 15% to 32% if energy efficiency techniques are fully utilized. That can be anything from using automated lighting to deploying combined heat and power systems — technologies that capture wasted heat and then recycle it to make energy. For those efforts to succeed, though, the C-suite needs to be onboard. 

Although many energy efficiency projects have high internal rates of return and/or short payback periods, often they are not implemented,” the Energy Department says. “Someone in the company must have the incentive, interest, skill set, and time to identify project opportunities, to prepare and package together with the project technical, financial, and procurement documents, and to push for project approval and implementation.”

The Results

As for General Mills, it took to the plant floor for hands-on training. It found opportunities to reduce leak rates, improve dust collectors, and better the pneumatic pumps for transporting ingredients. The cost to run its compressed air system was unknown. The solutions started with low-hanging fruit like routine maintenance. But it also involved more complicated steps like improving heat recovery to make the process hot water.

As part of the company’s greenhouse gas emissions (GHG) reduction goal, each General Mills production facility has a target to reduce energy use by 2% annually. During fiscal 2018, this rate decreased by 2% compared to the prior year; absolute energy use decreased by 7%, it says. The company wants to save $25 million a year in energy costs and reduce greenhouse gases by 28% by 2025.

The most prominent sites have a full-time engineer focusing on energy reduction, while the smaller plants have part-time experts concentrating on energy efficiency. This approach has saved $13.5 million per year in energy costs in the first three years and achieved an 11% reduction in energy intensity.

“Climate change and its effects are having an impact on our planet, people’s lives, and on General Mills’ ability to live out our purpose of making food the world loves,” Kofi Bruce, chief financial officer at General Mills, said in a statement. “General Mills is focused on reducing emissions across our value chain, and we are making strategic financial investments connected to our sustainability goals to further advance and support this important work.”

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