Krones Group Annual Report 2023
Krones has mapped out its journey into the future since 2022 with “Solutions beyond tomorrow”. This slogan outlines Krones’ strategic vision for the years ahead.
In order to realise its ambitious visions, the Krones team has a long, major road ahead. The first steps have already been taken in 2023.
On the way, the company benefits both from its motivated and highly qualified employees and from the stable growth of the beverage markets.
Shaping the future
Interview with Christoph Klenk, CEO
“Solutions beyond tomorrow” embodies the ambitious vision of producing “sustainable and affordable beverages, food and essentials for everyone and everywhere”. Why is the company aiming so high?
Christoph Kenk: “Because we are conscious that, as a company, we bear responsibility for our customers and employees and for people around the world. More beverages and more food are needed to feed the world’s growing population. Especially against the backdrop of climate change, it is immensely important for these to be produced in a resource-efficient way. This is where Krones is called upon to contribute to a world worth living in, with future-ready, sustainable technologies. Our ambitious target picture gives all Krones employees guidance on this challenging journey.”
How did the workforce respond to the new target picture?
Klenk: “Of course there was a little scepticism at the beginning as to whether such big goals are achievable. But the team spirit in Krones’ DNA soon prevailed. Our employees around the world see themselves as part of a larger community working together toward an ambitious goal. Their motivation and enthusiasm to help shape a better future is tremendous. I am proud of how our people bring “Solutions beyond tomorrow” to life every day.”
2023 was the first full financial year under your new target picture. Is Krones already a step closer to realising its vision?
Klenk: “We have set out on a long, ambitious journey and have now taken the first steps. Krones already has successes to show that are based on the new target picture. In 2023, we published our Carbon Transition Plan, in which we clearly describe how Krones will achieve its climate targets. Various innovative lines and technologies are also available for our customers to use for resource-efficient, climate-friendly production. But as I said, we are only at the beginning of a long and challenging journey. I am confident that we will successfully complete that journey as the Krones team and make our vision reality.”
Shaping the future
The world’s population needs more packaged food and beverages
The world’s population is growing by about 60 million people a year, the middle class is expanding in emerging and developing countries, and more and more people are moving from rural areas to cities.
These megatrends mean that the global demand for packaged foods and beverages is constantly increasing and that more needs to be produced. At the same time, the industry attaches ever greater importance to sustainable manufacturing processes. Sustainability is now a megatrend in its own right.
Stable demand for the global beverage industry: Many long-term megatrends support Krones’ growth
Increasing demand for innovative filling and packaging technology from Krones
Driven by the megatrends, global consumption of bottled beverages continues to grow. Consumption is expected to rise by an average of 2.7%* per year from 2023 to 2027. Krones benefits from this trend as the world’s number one manufacturer of beverage filling and packaging lines.
The global population’s increasing consumption of beverages, which is hardly affected by economic fluctuations, ensures long-term stable growth in demand for our products and services.
* Source: Global Data (27 November 2023)
Krones benefits from stable market growth. Our order intake increased by an average of 7% per year from 2006 to 2022. The only dips in order volume were in 2009 (the financial crisis) and 2020 (COVID-19). Order intake in 2023 was also lower than the previous year, but that was due to the extremely strong increase (+34%) in 2022 as a result of the catch-up effect following COVID-19.
Krones contributes to a future worth living
The opportunities for Krones in this growing and essential market are huge – but so is the social responsibility that goes with them. We are fully aware of this responsibility and address three global challenges in “Solutions beyond tomorrow”:
- Combating climate change
- Feeding the world
- Ensuring responsible use of packaging materials
Krones has innovative products and technologies that help feed the world. We combat climate change by reducing carbon emissions not only in the manufacture of our machines and lines, but also in their operation in customers’ plants. With our alternative and circular packaging solutions, we combat the problem of plastic waste.
Krones helps people to save resources
More and more consumers take care to look after the environment in their daily lives. When purchasing packaged beverages, for instance, people want to be sure that plastic bottles are sustainable and their beverage is produced with the smallest possible carbon footprint.
The beverage industry needs innovative filling and packaging equipment to meet consumers’ requirements. As a pioneer in sustainability and sustainable technologies, Krones can deliver.
Our vision: the basis for our strategic focus
We have clearly formulated Krones’ vision in our target picture: Sustainable and affordable beverages, food and essentials for everyone and everywhere.
To this end, we develop solutions beyond expectations for our customers, humanity and our planet.
Krones needs this big and ambitious vision to ensure that it will continue to evolve. It provides the basis for our strategic focus.
In order to achieve our ambitious goals, we place a clear strategic focus – in all three segments – on the core areas of sustainability, service quality and digitalisation.
Krones provides customers with sustainable solutions
Our customers increasingly require resource- and carbon-efficient machines, systems, lines and entire factories.
Krones introduced the enviro sustainability program back in 2008 and has been developing it dynamically ever since. This means the company has been highly successful with sustainable products and services for over ten years, and we aim to further extend our leading position with innovations that go beyond what people can imagine today.
Sustainability is also extremely important within our own operations. We published details on the implementation of our climate strategy for the first time in mid-2023, in our Public Carbon Transition Plan. In it, we describe our goals, measures, progress and implementation plans. We will update the Carbon Transition Plan on an annual basis.
Better performance with digital services
Service and digitalisation go hand in hand at Krones. We develop industry-specific digital services based on the experience of our 3,000-strong service team and countless interactions with customers.
Working together with our customers, we make the adjustments needed to optimise line performance and thus reduce total cost of ownership (TCO).
Among other things, our smart digital solutions enable customers to save material, valuable resources and waste. They also shorten downtimes and changeover times while reducing the workload for operating personnel.
So that we can be quickly on the spot at any customer around the world, we have service companies and lifecycle service centres on every continent. The closer we are to our customers, the faster we can solve their problems.
“Solutions beyond tomorrow” determines the strategic direction of our segments.
Filling and Packaging Technology
In our core segment, we focus on integrated packaging solutions, resource efficiency and making circularity work.
Process Technology
We position ourselves here as an innovation driver for our customers’ products in the food and beverage industry.
Intralogistics
Our focus in this segment is on fully automated and flexible solutions.
Examples from the segments
Filling and Packaging Technology
Responsible use of packaging materials: ShoulderFlex
Krones won the German Packaging Award 2023 in the Sustainability category with the ultra-lightweight ShoulderFlex bottle. This weighs just 5.9 grams and saves up to 50% of the plastic of a standard 0.5-litre PET water bottle. It represents an important contribution by Krones to reducing the carbon footprint of bottled water producers and promotes the responsible use of packaging materials.
Responsible use of packaging materials: LitePac Top Strap
Plastic can be completely eliminated from secondary packaging. The 100% recyclable, plastic-free LitePac Top Strap packaging solution is the latest Krones innovation in the LitePac Top secondary packaging system, which is based on a recyclable paper carrying handle. LitePac Top Strap adds a strap of tear-resistant kraft paper for extra carrying stability.
Conserving water: Innovative water recycling
Water is a scarce and valuable resource on our planet. With its innovative products, Krones aims to minimise water consumption in beverage production and filling.
An example is an innovative water recycling system with which Krones saves large volumes of rinsing water on can lines. Up to 90% of all rinsing water can be reused in this way and the fresh water consumption of a canning line is reduced by up to 50%.
Process Technology
Conserving water: Krones HydroCircle
Valuable water can also be saved in the brewing process. Today, about 3.0 to 3.5 litres of water are consumed for every litre of beer brewed.
The Steinecker Water Sustainability Concept features modules that can already reduce this by 0.7 to 1.0 litres. By recycling wastewater into process water with the Krones HydroCircle system, water consumption is even reduced to 1.7 to 1.9 litres per litre of beer brewed. That represents a saving of almost 50%, or around 1.5 litres of water per litre of beer brewed.
Combating climate change: Alternative proteins
There are many reasons for eating foods made from plant-based proteins, ranging from combating climate change and avoiding animal products to maintaining a health-conscious diet. So many reasons, in fact, that plant-based drinks and meat substitutes have developed from a niche product into a rapidly growing market within a short space of time.
In the processing of plant-based dairy alternatives, we benefit from decades of experience in process and brewing technology, as well as in the treatment and filling of animal dairy products.
One relatively new technology is the production of meat alternatives using methods such as precision fermentation. Here, too, Krones can apply its experience in brewing processes to the production of vegan meat alternatives.
“Plant-based and cultured meats and other alternative protein sources allow people to enjoy favourite foods such as meat and dairy products without contributing to the problems associated with conventional livestock farming.”
Source: Good Food Institute Europe
Intralogistics
Protecting people: cold-store logistics
In addition to energy and cost savings, a core focus of “Solutions beyond tomorrow” in the Intralogistics segment is improving occupational safety and workplace conditions for customers’ employees.
Our intralogistics subsidiary System Logistics achieved this outstandingly for the Tosano Group, which operates 19 supermarkets in northern Italy. System Logistics optimised the frozen products warehouse with a fully automated storage and picking system. This significantly improved the working conditions for warehouse employees. Robots now carry out all work in the cold store, which at 28 degrees Celsius below zero is a hostile environment for humans.
Workforce bringing “Solutions for tomorrow” to life
The group’s employees are crucial to the successful realisation of our target picture. With their actions and commitment, they shape the future of Krones. In a rapidly changing world, the flexibility and creativity of our international workforce is one of our most important assets. Our success at managing the latest challenges underscores the great resilience of our company.
As a diverse organisation operating worldwide, we are open to change. We promote global collaboration and set ambitious goals to drive our performance and development. To accomplish these, all employees constantly ask themselves “how can I contribute – how can I improve in order to achieve our challenging goals?” The entire international team of around 18,500 employees will pull together to realise our great shared goal: shaping a sustainable, liveable future for us all with “Solutions beyond tomorrow”.
