How Can Distillers Improve Efficiency Amid Rising Costs?

Introduction

The August 2023 alcohol duty hike of over 10% continues to impact distilled spirits manufacturers. As the largest such increase in 50 years, this increase has reverberated through all parts of the supply chain, greatly affecting the profit margins of distillers. Further pressure is expected in February 2025, with the duty rate set to rise by another 2.7% in line with Retail Price Inflation.¹ Understandably, this may exacerbate an already challenging financial situation for industry stakeholders.

Combined with increases in raw materials and energy costs, the need to find cost savings is a growing priority across the sector. Though these raw material prices are subject to less controllable macroeconomic global trends, the same does not apply to energy pricing.

Properly specified, decentralised industrial generators and energy-efficient manufacturing HVAC equipment could help distillery stakeholders improve operational costs and efficiency. The scope for improvement is vast, especially in a manufacturing process where precise power and temperature control is essential to ensuring product quality.

Similarly, given the energy-intensive nature of machinery used in fermentation – including pumps, mixers, industrial chillers, heaters and control systems – any efficiency gains could be further amplified across an entire site. However, the duty hike has also had an impact here.

According to the Survation UK Distillery Industry Report 2023, 71% of distillers said they are less able to invest in business improvements such as increasing production capacity or adopting more innovative technologies following the duty change.² Consequently, distillers are in a difficult position. Upgrading to high-quality, high-efficiency equipment is essential for making energy savings and reducing operation costs, but the duty rise has limited capital spending budgets used to purchase this equipment.

The Modular Approach

In these circumstances, generator hire is a viable route forward. By procuring industrial generators and process cooling equipment in this way, distillers can improve process efficiency during key industry applications, such as fermentation.

Applying the latest technologies as an operational expense can allow organisations to adopt modular and scalable chiller systems and power provision without prohibitive up-front costs. As a result, these companies can reduce energy consumption and emissions in a cost-effective way, keeping processes running smoothly while also safeguarding budgets.

Monitoring performance

To make the most of a generator hire strategy, it is critical that distillers engage suppliers capable of providing a wide range of industrial generator and process cooling equipment. Aggreko meets this remit, providing a portfolio of energy-efficient temporary solutions to supplement on-site power and temperature control solutions.

Through the company’s market-leading technologies and processes, site stakeholders can also enact a greater level of climate control over the spirit production process. For example, Aggreko Remote Monitoring (ARM) enables centralised monitoring and remote control of equipment, ensuring maximum efficiency and energy savings.

This control solutions service provides 24/7, year-round remote monitoring, rapid emergency response, and proactive maintenance and fuel services. Additionally, ARM allows users to view live data of on-hire equipment and highlighting any stoppages or faults for immediate resolution. These actionable insights help prevent downtime and ensure operational reliability of industrial generators and manufacturing HVAC systems used at distilleries.

Site stakeholders can be assured of enhanced operational efficiency backed up by support from Aggreko’s sector experts and skilled engineers. Complemented with well-informed generator hire and process cooling equipment procurement strategies, distillers can mitigate disruption caused by the rate hike and make cost, energy and emissions savings elsewhere.