The servitization shift in food and beverage.
Confidence in the UK’s food and beverage manufacturing sector has dropped steeply. In the final quarter of 2024, the Food & Drink Federation recorded a net confidence score of -47 percent, a dramatic fall from minus six percent just three months earlier. This shift, however, is not unique to the UK, but indicative of the global food and beverage sector, and a consequence that reflects the weight of rising costs, fragile supply chains and intensifying regulatory demands.
These aren’t fluctuations. Margins are being tightened, investment decisions delayed, and resilience tested at each stage of the value chain. In this environment, temporary fixes and one-off upgrades are just not enough. To stay competitive, manufacturers need to pivot from reactive measures to proactive, long-term outcome-driven partnerships where risk and performance are shared, and value is measured by results rather than transactions.
The rise of servitization in manufacturing
One way in which this can be achieved is through servitization, a business model that moves the focus from specific products to delivering results through collaborative, outcome-based partnerships.
Servitization builds a synergy where both the manufacturer and service provider are aligned to common goals and share responsibility for performance. Both sides agree to deliver measurable results, whether that’s minimizing product loss, optimizing energy use or increasing overall line efficiency.
To put this approach into practice, manufacturers need to create a partnership that aligns on objectives, distributes risk fairly and establishes clear accountability. At Tetra Pak we are embracing servitization by working with customers to do exactly that: build long-term partnerships based on shared objectives. This means supplying food and beverage manufacturers with equipment and services but also committing to deliver performance and cost improvements together over time. Our Advanced Agreements are one way we put this into practice, with structured partnerships that create clear accountability and focus on measurable outcomes.
Breaking away from transactional models
Servitization requires a mindset shift. For decades, the industry has viewed the sale of products and the delivery of services as transactions and has structured itself accordingly. But these traditional manufacturing methods cannot keep pace with the current rate of change.
Supply chains are fragile; there are new regulatory pressures and consumers are expecting greater transparency and responsibility from the brands they buy. Manufacturers can no longer afford to treat efficiency, cost control and sustainability as three separate priorities. They do not all need to be tackled at once, but they must be addressed as part of one connected strategy so that progress in one area reinforces gains in the others.
One of Saudi Arabia’s largest dairy and juice companies is testament to the benefits of such integration. By optimizing plant-wide processes under a long-term agreement, the company improved line efficiency by 13 percent, saved €300,000 annually, cut water usage by 14,000 liters and reduced CO₂ emissions by 19,000 tons. All these outcomes combined delivered financial returns for the company, while embedding better environmental performance into its core operations.
To put it plainly, servitization requires a unified ambition, agreement on measurable targets and collaboration to achieve them.
Turning strategy into measurable impact
Outcome-based agreements are flexible by design: they focus on the outcomes that matter most to each manufacturer, whether that is improving operational reliability, ensuring cost predictability or advancing sustainability goals. Over time, these priorities may overlap. For instance, cutting waste lowers costs, while also reducing environmental impact – but the starting point depends on the customer’s primary needs.
The shift to servitization requires a whole-plant perspective. Instead of optimizing single machines in isolation, servitization looks at the entire plant lifecycle, from equipment availability to process efficiency, energy use and product loss. By leveraging advanced analytics, remote monitoring and predictive maintenance, manufacturers can move from being reactive to proactive and ultimately, strategic.
The difference this makes is clear in practice. Inbrew Beverages, one of India’s fastest-growing producers and distributors of alcoholic beverages, partnered with Tetra Pak to modernize operations across four plants. This structured, performance-based service model helped Inbrew achieve 98 percent mechanical efficiency, 96 percent production time utilization and kept material wastage under 0.5 percent. The company also realized annual savings of around €184,000, all while improving operational resilience and maintaining product quality.
A shared route to efficiency, sustainability and growth
While the pressures faced by the food and beverage industry are not easing, neither are the opportunities to address them. Outcome-based partnerships are a practical path forward: manufacturers can secure cost predictability, unlock efficiency gains and embed sustainability into daily operations without bearing the risk alone.
The next step is about putting in place the business models that deliver results now, while building resilience for what comes next. The companies that act first in this space will set the benchmark for competitiveness in the decade ahead.
Sasha Ilyukhin
Sasha Ilyukhin is Senior Vice President, Global Processing Services and Services Solutions, Tetra Pak. A member of the global senior leadership team, he is responsible for sustainable, profitable growth of processing services and long-term service agreements worldwide. In this role, Sasha and his team are transforming the services business model through creating, deploying, and nurturing outcome-based solutions focused on customers’ business resilience, productivity, sustainability, and human centricity. He also serves on several global steering committees tasked with strategy development and organizational transformation of Tetra Pak Group.