Rising energy costs threaten food and beverage industry

LAHORE: Pakistan’s food and beverage industry, one of the country’s largest employers, is facing mounting pressure from rising energy costs, outdated equipment, and inefficiencies that are eroding productivity.

Industry analysts say a move toward digital transformation could be a key to reversing the decline and improving competitiveness.

The sector contributes about 27 percent of Pakistan’s total manufacturing output and employs nearly 16 percent of the industrial workforce, according to the Pakistan Bureau of Statistics. Yet much of the industry still depends on aging technology and manual systems, leaving producers vulnerable to rising costs and unstable energy supply.

Frequent power shortages and long hours of load-shedding continue to disrupt production lines. A World Bank report describes the energy sector as “a major drag” on Pakistan’s economy, citing persistent distribution losses, circular debt, and weak management of power utilities. The report notes that these structural problems have cut into industrial output and raised operational costs across the manufacturing sector, said the analysts.

For food processors, the impact is especially severe. Factories depend on uninterrupted electricity to maintain refrigeration, processing, and packaging lines. Any outage can spoil raw materials, damage machinery, or halt production entirely. According to the World Bank, inefficiencies in the power sector continue to undermine industrial growth even as generation capacity expands, resulting in billions of rupees in economic losses each year.

Some manufacturers are turning to advanced-technology solutions that promise to make factory operations more efficient and resilient. Global packaging company Tetra Pak recently rolled out its Factory OS™ system, a digital platform that connects machinery and sensors to track production performance and energy use in real time. The system can be integrated with both old and new equipment, allowing operators to identify inefficiencies, predict maintenance issues, and reduce downtime.

As per Awais Bin Nasim, Managing Director of Tetra Pak Pakistan, “Pakistan’s food and beverage industry holds tremendous potential for growth, but challenges such as high energy consumption, energy supply disruptions, production inefficiencies, and data fragmentation continue to limit progress.

Solutions like Tetra Pak Factory OS™ can revolutionize how factories operate, enabling manufacturers to make real-time, data-driven decisions that enhance efficiency, reduce wastage, and support sustainability goals.”

The industry experts say such technologies could help factories offset the financial impact of unreliable power and rising costs. By providing real-time data on energy consumption and equipment performance, systems like Factory OS™ can help managers make faster, data-driven decisions, such as shifting production schedules during load-shedding hours or optimizing energy use during peak demand.

Copyright Business Recorder, 2025