Food and Beverage

Supply Chain Trends in Food & Beverage

March 03, 2022

The COVID-19 pandemic was one of the most challenging times, especially for the food and beverage industry. It highlighted the vulnerabilities in the supply chain, forcing many food chains and restaurants to close.

The existing supply chain in the food and beverage industry lacks the resilience to support continuous business. The main challenge is sourcing raw materials with limited shelf life and delivering them to customers.

Disruption is still a significant challenge despite emerging trends and supply chain evolution. Supply chain managers and executives have to embrace new technologies, strategies, and analytics to increase supply chain resilience, and have to find creative ways to meet the rising and dynamic customer demands, which are more dynamic and can drive micro-trends. For instance, they contribute to accelerated delivery, adoption of new software, and digitalization. People are more technology-conscious and impatient, especially with the many online options.

Let’s explore the supply chain trends in the food and beverage industry and how businesses can optimize their supply chains post-pandemic.

Sourcing close to your business and customers

The COVID-19 pandemic forced supply chain operators to recognize they need a more flexible and resilient supply chain.

Previously, most companies preferred offshoring to cut costs and maximize profit margins. They did not consider expanding their vendor options to include nearshoring.

Supply chain personnel now understand the volatility of relying on one global region. They need to modify their business operations to create more resilience for the future.

Nearshoring ensures companies' flexibility to accommodate the different customer demands. It’s easier to scale inventory and speed up delivery due to the reduced distance to the point of sale. It also makes it possible to order products in their raw form depending on the demand rather than buying the products to stock.

Optimizing omnichannel capabilities

E-commerce fulfillment allows businesses to grow and adapt to the changing purchasing behavior.

Although the pandemic was devastating, there were great business opportunities in online purchases. However, businesses could not take advantage since the regular operations didn't include e-commerce.

Post-pandemic, businesses have to incorporate e-commerce fulfillment capabilities. It’s an excellent strategy to ensure sales keep moving regardless of the shopping channel.

Omni-channel capabilities ensure quick access to the inventory and faster fulfillment. Warehouses can be strategic in their location to provide full-time services.

Instead of the traditional fleets, it’s best to have several transportation services such as parcel carriers.

Embracing digital innovation

Smart devices influence customer shopping behavior. Such devices provide data that companies use to guide inventory sourcing. It also offers insights for product innovation. Technology advances such as artificial intelligence, robotics, and analytics empower decision-making.

Digital innovation also promotes healthy competition. Companies can monitor key performance indicators such as customer satisfaction and product quality. The data collected through multiple platforms and advanced analytics is also beneficial. It enhances decision-making within the supply chain through real-time data analysis.

Capitalizing on technology and data analytics

The supply chain in the food and beverage industry is now more reliant on data and digitization. Data analytics empower supply chain executives with essential market insights. It helps them plan operations better and stabilizes sales.

Adapting lean techniques of inventory management

During the pandemic, the spikes and dips in demand for specific products were a challenge for the food and beverage businesses. Maintaining an inventory that accommodates the market demand with minimal wastage is a struggle.

Developing a lean supply chain strategy is an excellent way to manage inventory. It improves flexibility while minimizing wastage.

Continuous growth in the cold chain sector

The continued growth of cold chains is a popular trend in the food and beverage industry. The COVID-19 pandemic created a rising demand for temperature-sensitive drugs such as vaccines.

It also highlighted the importance of reducing food wastage and enhancing food quality. Consumers now prefer healthier foods that undergo minimal processing to boost their immunity. However, most of these food products require temperature control. This creates more business opportunities in the frozen food sector.

Labor shortages

Labor shortages in the food and beverage industry are another worrying trend. There are numerous job openings in the transportation and warehousing sector.

Employers find creative ways to attract new talents, such as bonuses and free college tuition. However, low wages and poor working conditions remain a significant huddle.

Automating warehouse processes is an excellent way to cut manual labor and sustain operations.

Limited temperature control shortage

The need to stock COVID-19 vaccines created an unforeseen competition. Companies handling pharmaceuticals and perishable goods both require temperature-controlled facilities.

Despite the high demand, expansion faces challenges due to shortages and rising material costs. There's a real growth opportunity for supply chains in temperate-controlled storage facilities.

Building solutions for today, tomorrow, and the future

The ultimate solution is integrating all these aspects:

  • Data
  • Analytics
  • Omnichannel fulfillment strategy
  • Modern technology
  • Automation
  • Near-sourcing

It helps your supply chain manage disruptions and adapt to the changing customer demands. Products can reach assembly lines faster, on-demand.

Strategically placing warehouses and distribution centers reduces possible risks within the supply chain. It promotes accelerated, efficient, and accurate order fulfillment.

A resilient supply chain ensures continuous product movement through the supply chain. Fleets can optimize delivery processes, and customers can estimate the delivery time of their products.

Food & Beverage Consulting Services

To grow and remain competitive, food and beverage companies have to adapt to the dynamic market conditions. Leading food & beverage industry consultants such as Ollen Group can help you design and execute successful strategies.

As a leading food and beverage consulting firm, Ollen Group consultants and team of experts are highly versed with day-to-day F&B business problems and are up to date with consumer shifts in the Middle East, and the necessary steps needed to find success in the future. We offer turnkey solutions from strategy to execution, as well as design, development, and deployment.

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Ollen Group is a global consulting firm established by passionate professionals with extensive institutional and entrepreneurial experience regionally and globally, to help business leaders achieve practical results with real impact. Ollen Group provides consulting services from idea-to-execution and covers capabilities such as research, analytics, strategy, innovation, planning, improvement, design, supervision, activation, and support.

For more information on industries and relevant consulting services, email us at info@ollengroup.com