Europe's food sector has been a relatively reluctant adopter of new technologies.
But new regulations have pushed more of them towards seeking out efficient solutions to meeting the standards, said Frost & Sullivan in a study of the market for supervisory control and data acquisition (SCADA) and distributed control systems (DCS).
Rising raw material costs and increased competition from low-cost manufacturing regions such as China, are pushing European manufacturers across industry sectors to examine their operational efficiency, the consultancy stated.
SCADA and DCS systems are crucial to achieving production synergies and eliminating costs in the manufacturing process, Frost & Sullivan industry analyst Jonas Westlund told FoodProductionDaily.com.
His report forecasts that the European SCADA and DCS markets across all major manufacturing sectors will generate a revenue growth of $691 million between 2005 and 2011, with the food and drink sector showing the largest increase.
Westlund said his research indicates that food and beverage manufacturers remain sceptical about the bottom line benefits of automation and control technology.
"The sector is characterised by a reluctance to adopt automation and control technology, with the result that suppliers to the industry must work hard to convince potential customers of the long-term cost advantages of their products," he said.
However current trends in the market are behind the recent growth in demand from the food and beverage sector for the technologies.
One key factor is the current tight profit margins in the industry sector, mainly driven by consolidation in the retail segment.
"The net effect has seen European food processors being put under considerable pressure to streamline their production processes in order to reduce costs, maintain efficiency and ensure profitability," he said. "As a result, this is expected to drive investment in DCS and SCADA, which in the longer term is anticipated to contribute to improved margins amongst food processing companies."
The consolidation of key suppliers are another factor in the equation. The recent spate of merger and acquisition activity in the European food and beverage processing market has been driven by a desire to dispose of non-core activities and focus more on a company's strengths.
Consolidation has helped strengthen the position of Europe's largest food and beverage processing companies, Westlund said.
"Since such companies operating in multiple countries and from multiple production sites, these companies should particularly benefit from automating production processes and using computer-based control systems," he said. "At the same time, a change of ownership is expected to drive investment in SCADA and DCS solutions as the new owners are looking to pursue uniformity across all plants."
EU directive 178/2002, which came into effect at the start of 2005 put in place stringent guidelines requiring that all food manufactured and sold in the EU should be safe and fully traceable "from farm to fork" and back again.
The directive defines traceability as a company's the ability to identify a unique product, and the raw materials used in its production and to follow the progress of that product right through the production and distribution process.
The directive also requires operators in the food sector to have in place product withdrawal systems and keep records identifying the source of their raw material and the businesses they supply.
Demands from the sector for reliable traceability systems has stimulated investment in automated production processes and computer control products, Westlund said.
"Although most production plants have been upgraded to meet these demands, this driver is still expected to stimulate SCADA and DCS growth particularly in the EU accession countries as food processing companies are looking to implement standards to export their products within the EU," he said.
Those moving toward implementing the technologies have the benefit of a highly competitive market for SCADA and DCS.
Component prices are falling, which puts pressure on SCADA and DCS manufacturers to increasingly look to provide integrated systems rather than individual components.
"Competition is also fierce from food equipment machinery suppliers as the food customer is more likely to base his investment decision on the machine brand or the supplier of the machinery rather than what control systems it comes with," Westlund said. "Besides, the food machinery is already provided with embedded PLCs (programmable logic controllers)."
An added factor aiding the uptake of SCADA and DCS systems is they allow companies to make the development of new products more efficient.
Advances in DCS have seen the development focus widen from traditional process control to an extended range of applications such as production management, safety instrumented systems, information management and documentation, all handled in one single system.
Advances in SCADA technologies have ensured improved IT compatibility along with the capability to support higher-level business systems such as manufacturing execution systems (MES) and enterprise resource planning (ERP).
"New SCADA systems increasingly offer features traditionally associated with DCS products, such as in-built redundancy," Westlund stated.
The systems enable a primary host computer to automatically switch to a secondary computer in the event of a system failure, thereby ensuring that the data remains available to clients in the event of server disruptions.
Frost & Sullivan forecasts that the European SCADA and DCS markets across all major manufacturing sectors is expected to generate a revenue growth of $691 million between 2005 and 2011, with the food and drink sector showing the largest increase.
With a projected increase of 36.9 per cent, the food and beverage sector is likely to show the highest growth rate among other manufacturing sectors spending on the technology. The power generation sector is poised to lead the growth in monetary terms, exceeding $300 million for a growth of 28.4 per cent.