Signature's significant energy usage as a food processing business means it’s particularly at risk for any increases in energy prices. To shield itself from any excessive costs, Signature’s procurement strategy needs to explore opportunities for cost reductions and favorable prices to remain competitive.
This has become increasingly paramount during a cost-of-living crisis which has delivered increased consumer and supplier pressure. With an international market and a constant focus on innovation and development, they also require budget certainty to prevent disruption to any scheduled plans by unseen costs.
- Securing the best possible prices for energy and avoiding excessive market costs.
- Maintaining budget certainty while not ignoring the potential financial advantages of positive market costs.
- Extending their flexible procurement contracts early before the market increases.
- Setting a trading strategy with Trident and regular conversations to trade in line with appetite for risk.
- Over the current gas contract in place Signature Flatbreads have saved 54% on their costs, equivalent to more than £4.7m against closing market prices.
- Signature’s electricity savings on their current contract are in the region of £5.35m lower than closing market prices giving them a saving of over 50%.
Staying ahead of the markets
This decade has proven more than ever how vital a strategic approach is to your energy procurement. Prices have fluctuated wildly in a short space of time, from record lows in 2020 due to the COVID-19 pandemic to the highs caused by the Ukraine invasion only two years later. It’s meant that delivering budget certainty while saving money has been increasingly difficult.
This has been compounded by high inflation, with increased costs across supply chains harder for businesses to absorb. Managing to insulate your business from the impact of sky-high energy rates often results in a competitive advantage, something Signature’s strategic planning managed to gain.
After renewing their gas supply contract from September 2020 to January 2025 and setting a trading strategy with Trident, Signature locked 50% of their gas volume until January 2025 at 1.2 and 1.7p/kWh in October 2020. Further volume was then taken in August 2021. Doing so helped Signature avoid the huge surges in prices, with market rates peaking at 15p/kWh during that period. This led to a percentage saving of 54% across their gas costs, £4.7m less than the market prices during the period.
These savings were continued with electricity, where significant volume was fixed until the end of 2023 at 4-8p/kWh. The price during this period reached as high as 80p/kWh, ensuring Signature saved £5.35m in total on their electricity charges against closing prices for the periods throughout.
What Signature Flatbreads think
Trident’s support through the past few years has helped us get the very most from the energy markets. We’ve been reliant on their insight to ensure we keep our costs as low as possible, which has resulted in significant savings during a period when energy bills have hugely hindered businesses like ours.Doug Allen, Senior Project Engineer
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