New analysis from Frost & Sullivan:  ‘Strategic Analysis of Electric Drives Market in European Food and Beverage Industry’, has found that the market earned revenues of €204.89 million in 2010 and estimates this to reach €313.14 million in 2017.

The food and beverage industry had been a major user of electric drives, but demand was adversely affected during the economic slowdown. However, current dynamics have heightened the need for energy efficiency.

Electric drives represent almost 2/3 of the energy consumption demand in the F&B industry. Surging energy prices have however had a negative impact on the performance of this industry. In this context, energy-efficient drives have helped companies reduce production costs, improve ROI and lower CO2 emissions.

“The F&B industry is becoming completely automated, resulting in increased power consumption during the production process,” said Frost & Sullivan research analyst Raaj Thilak Raveendran. “Companies are also looking to reduce their energy usage by implementing energy-efficient drive technology. Although expensive, energy-efficient drives provide high ROI and reduce operating costs – two advantages that will boost their uptake over the forecast period.”

As the market expands, a major challenge will be intensifying competition. With over 100 drive manufacturers, there is relentless price pressure, resulting in eroding profit margins.

“Small participants face challenges like sizeable labour costs, eroding profit margins and industry consolidation,” added Raveendran. “Market participants state that there is a price drop of 3% in electric drives every year, which affects the profit margins of all market participants.”

To succeed manufacturers need to expand their product range or identify new applications for their existing products.

Frost & Sullivan