At the start of the year, there is a lot of talk about trends in food and beverage. What consumers want, new flavours, new textures, and more. But what about on the operations front? Cloud software company Infor senior VP and GM, Asia-Pacific and Japan, Terry Smagh shares his three predictions for the year ahead.
In 2023, the Australian food and drink industry reached a significant milestone, achieving a turnover of A$50 billion. It’s clear that the sector plays a vital role in bolstering the Australian economy, providing not only jobs but also fostering innovation and sustainability in food production and distribution.
But understanding potential shifts in this sector is essential. What follows is a brief survey of three major trends that we at Infor believe will shape the industry in 2025.
1. Cybersecurity will no longer be seen as optional
Food and beverage companies will need to invest in robust security measures and consider cloud-based solutions for enhanced resilience to better protect their operations and secure their food supply given ongoing geopolitical tension.
Typically, companies in the sector that are perceived as “analogue” are more vulnerable to cyber-attacks, including ransomware and potential disruptions from rogue actors, due to their reliance on outdated technology and less robust digital security measures.
Indeed, there have already been major cases of Australian food and beverage venues falling foul of cyber criminals. In May, for instance, IT provider Outabox, used by dozens of hospitality venues, was hit by a ransomware attack that leaked redacted information of more than one million people throughout New South Wales and the ACT. For companies with weaker financial backing, such downtime could potentially spell the end for that business.
To mitigate this threat, food and beverage organisations should look to invest in cloud-based solutions as they often provide a higher level of protection than many organisations can achieve on their own. Why? Specialist expertise is a key factor. Cloud providers invest heavily in recruiting and retaining top-tier security experts who have dedicated their entire careers to strengthening cloud defences and proactively addressing vulnerabilities.
This concentrated focus on security, combined with the massive scale at which cloud providers operate, creates a level of expertise that's challenging for smaller organisations to replicate in-house.
By utilising the cloud, businesses can essentially "borrow" this elite security knowledge, benefiting from cutting-edge protection and continuous monitoring.
2. Agility will be key to survival
Companies need to be able to adapt quickly to meet fast-changing consumer demands, retailer pressures, and regulatory requirements such as the introduction of mandatory ESG reporting and the National Food Waste Strategy.
Respectively, these regulations impose stringent requirements on businesses to ensure their supply chains do not contribute to deforestation – which in turn necessitates comprehensive tracking and the verification of sourcing practices – and increase obligations around sustainability reporting, requiring businesses to provide more detailed disclosures on their environmental and social impacts.
Using specifically designed solutions that are integrated with an organisation’s IT landscape will help them to automate and structure this as much as possible, thus providing more agility.
But the ability to be agile won’t just help organisations navigate regulatory challenges as many are seeing their supply chains evolve (and must adapt to meet subsequent changes). With challenges including supply disruptions, the increasing cost of ingredients and labour, along with consumers shifting to lower-priced private label products (and many other aspects), food and beverage organisations will need to build in adequate flex to cope with what external market forces will throw at them.
3. Technology will enable the evolution of the food and beverage sector
For food and beverage companies, the strategic use of technology will become even more important in 2025. In addition to increased supply chain visibility, it will provide producers and distributors with real-time visibility and the ability to simulate different scenarios to make informed decisions to be able to negotiate effectively with retailers. Not only this, but increased use of technology will facilitate the automation of routine tasks and provide deeper insights to shape business operations.
As the industry becomes more complex, organisations that effectively integrate technology to optimise their operations are likely to emerge as leaders, efficiently navigating challenges and capitalising on opportunities in the market.
Embracing the opportunities at hand
As we look towards 2025, food and beverage companies will need to balance regulatory adherence with ongoing technological investment. The good news is that embracing technology not only meets compliance demands but also enhances operational efficiency and competitiveness. Businesses should therefore ensure that their strategies integrate these critical elements to remain at the forefront of the industry and make the best of the year ahead.
Terry Smagh is the senior vice president & general manager, Asia Pacific and Japan at Infor. He has more than 20 years’ experience in APAC across enterprise software sales in the digital transformation space, spanning industries such as retail, finance, and insurance.
