For years, food and beverage manufacturers have been concerned with short shelf life, inventory planning, and margin pressures. In today's competitive landscape, yesterday’s supply chains have had to adapt and change to respond to today’s consumer expectations of healthier choices, greater ingredient transparency, and more options for online or e-commerce shopping.
This health and wellness trend isn't new. What’s new is the level of growth we’re seeing in the market for consumers that want a healthier lifestyle—and are in fact, demanding it from their food habits and purchases. Food and beverage manufacturers are doing their best to meet this trend with cleaner labels, more plant-based options, and more ethically sourced food. Both new product introductions and long-standing products in the market are being updated with healthier ingredients to replace preservatives, saturated fat, sugar, sodium, or genetically modified (GMO) ingredients.
More consumers are taking products off the shelf and immediately turning the package over to see if they can read or even pronounce the ingredients on the label. Consumers want to know what they’re eating or serving their kids today, and they want it to be easier to understand. They want to know the background of a product’s raw materials and the farm where the chicken they’re eating was raised.
In addition to wanting labels that are easier to understand, as well as healthier options, consumers also want to ensure that the manufacturer has a social presence. What level of sustainability effort is the company aiming for with the products or ingredients they are providing? Are the eggs from free-range or cage-free hens? What kind of fertilizer was used on the produce? This is fundamentally a technology challenge in many ways because of the amount of data that you'd have to be able to store and make available to consumers.
How consumers shop for these healthier and more transparent options is also continuing to change. Food and beverage companies and retailers are learning more about the term omni-channel in regards to delivering their products to the end consumer. Simply put, the trend of buying groceries online is expected to triple over the next three years. If you live in a more urban area and are somewhat tech savvy, you’ve probably already been introduced to home delivery or even click-and-collect buying. These different ways to fulfill orders are driving food and beverage companies’ supply chains to adapt.
Food and beverage companies not only have to be innovative about creating new products, they must meet the needs of the consumer and deliver value at the same time. The value and information delivered to the customer has to include details on the availability, price, and perceived benefits. Supply chain improvements in any areas of value delivery add to competitiveness and in today’s world of social media, the information flow from company to consumer and back is never ending.
All of this drives a unique requirement for agility in the supply chain. To keep up, an effective food and beverage supply chain must be fully in sync with the consumer through technology-enabled sensing and satisfy multiple channels with seamless visibility and fulfillment.
Jarrod Kinchington is the ANZ managing director for Infor.
