Since the start of the Covid-19 crisis, the food and beverage (F&B) industry globally has seen some huge highs and lows. Unlike many of the industries, this one has grown significantly during the pandemic. In this blog, we decided to discuss some of the many different trends, challenges and tech that's important to know about within this industry.
The market that includes the production, processing, packaging and distribution of fresh, packaged foods as well as alcoholic and non-alcoholic beverages, is expected to reach $8,638.2 billion in 2025 and a staggering $11,979.9 billion in 2030. Although it's set to rise in the near future, the food and beverage supply chain has seen some significant disruptions. These dynamics are a result of changing consumer expectations, emerging market trends, and a steady pace of digitisation in the industry.
As we recover from the pandemic and head towards the 'new normal', it's extremely important for players in the food and beverage market to closely analyse the new trends that are shaping up the industry - the changing game of F&B logistics and also the role of technology in optimising the supply chain. Here are some of the top trends, challenges and tech in the industry:
Shopping Habits Changing -
Due to the pandemic, there have been many shifts in types of shopping habits. In a recent study, 78% of consumers have made a change in where they shop for their food. Since dining out still poses a health threat to some people, the demand for home delivery of restaurant food, prepped meal kits and fast food still remains. Since working from home is still continuing for some companies, buying groceries, fresh produce and meat, as well as alcohol online is another trend that's here to stay.
Subscription Boxes Gaining Popularity -
Since ordering food online became and still remains as such a regular event in most households, food subscription boxes have become increasingly popular, especially amongst the customers with busy lifestyles. There are plenty of options for food subscription boxes, ranging from ready-to-eat foods, meal prepped boxes, and even pre-measured fresh ingredients ready to cook a meal without the hassle of prepping.
These subscription services typically offer consumers convenience by offering curated ingredients or customised meal boxes. Gousto, Hello Fresh, Mindful Chef and Simply Cook are some of our favourite food subscription services in the United Kingdom currently (as voted for by our team!).
Post-Pandemic Led By Digitisation -
The pandemic has well and truly reinforced the need for digitisation and technology in managing businesses efficiently on a global scale. In a post-pandemic world, brands in the F&B market will leverage technology in order to streamline multiple facets of their supply chain, which includes demand prediction, inventory management, delivery planning and even optimisation.
Most brands are starting to recognise the importance of staying aligned with the latest market trends and are also refocusing their effort to improve their supply chain performance - but it goes without saying that the food industry faces some typical supply chain challenges that should be addressed effectively to be able to grow in the market.
Customer Experience Defined By Speed -
The majority of customers tend to prefer the convenience of delivery over dining out with their family and friends, and now with hundreds of food delivery options available, speed, efficiency and the safety of delivery become differentiating factors among brands. Nearly 30% of diners typically say that they would prefer to pay more for food delivery if it's fast, which indicates that brands should focus more on speeding up their last-mile operations and to optimise their logistics which will help to keep their customers satisfied.
Omnichannel Distribution -
For many brands in the F&B market, omnichannel distribution is now an inevitable strategy to keep up with their customers expectations. Customers are not only looking for restaurants to have an online presence, but they also want convenient delivery options - whether that's time-based slots, pickup options and of course contactless deliveries.
Brands that sell packaged foods and beverages are also starting to explore different ways to build an omnichannel presence, simply by listing their products on some of the top online delivery platforms like Deliveroo, UberEats etc or just simply selling directly to their customers.
Challenges In The F&B Distribution
Perishable Nature of Products -
The food distribution supply chain is tough because the very nature of food and beverages are perishable. Any damage that can happen to the products, delays in transportation, or even negligence on the ground could adversely affect the quality of the food, which can then lead to a risk of poor customer satisfaction.
Growing Food & Beverage Regulations -
Regulations that impact the food and beverage industry are always expected, as they're put into place in order to protect the public - however, they can then lead to increased costs and inconveniences for the companies with the regulations that they must adhere to.
For example, the ELD Mandate is a regulation that requires trucking companies to electronically log and monitor a driver's daily service hours. Whilst this has been put in place for safety and efficiency, this has now increased shipping rates and has caused many delays in the transfer for perishable goods.
Poor Communication -
If the past couple of years has taught us anything, it's that there are some serious weaknesses in the global supply chain. When food and beverage companies create relationships with suppliers and transportation providers across the globe, things are bound to fall through when a crisis arises.
If a single deadline is missed somewhere down the supply chain, it can cause a 'ripple effect' which then leads to significant delays. When you're dealing with food, it can also lead to spoilage, bacteria growth and even costly food recalls.
The Role Of Tech
Logistics is a crucial touchpoint in the food and beverage supply chain, whilst also being a key differentiator among brands in a highly competitive and ever-changing environment. Technology advances in AI, location intelligence, automation and data sciences are now transforming logistics for supply chains across the entire world.
Incorporating tech into the food and beverage industry will allow people to plan day-to-day delivery tasks that will be error-free in just a few minutes, with automated logistics planning and dispatch scheduling - saving a great deal of time and effort that would otherwise go into manual logistics planning.
Location intelligence tools such as geocoding and delivery route optimisation software can also provide accurate delivery addresses and even plan the shortest delivery routes, helping to speed up on-ground operations and meeting delivery SLAs.
Live visibility solutions can provide businesses with a 'hawk-eye' view of ongoing deliveries, along with some predictive alerts that will help to avoid any on-ground errors. Brands will also have the ability to share real-time ETAs and order updates with their customers for better transparency - resulting in providing a higher quality service for all of their consumers.
By leveraging tech in the industry, food and beverage brands will be able to modernise their distribution operations and will be able to build a more resilient supply chain for the future whilst keeping their promise of faster deliveries and a better service to all of their customers.