The food industry is a complex, global collective of diverse businesses that supply most of the food consumed by the world population. The food industry includes: Agriculture, Manufacturing, Food processing, Marketing, Wholesale and distribution, Foodservice, Grocery, farmers’ markets, public markets and other retailing. Food & Beverages manufacturing includes methods and techniques used to transform raw ingredients into food or drinks for human consumption. It takes clean, processed, harvested components and uses them to produce marketable food products. There are several different ways in which manufacturing is conducted:
- One off production: This method is used when customers make an order for something to be made to their own specifications. The making of one-off products could take days depending on how intricate the design is.
- Batch production: This method is used when the size of the market for a product is not clear, and where there is a range within a product line. A certain number of the same goods will be produced to make up a batch or run. This method involves estimating consumer demand.
- Mass production: This method is used when there is a mass market for a large number of identical products, ready meals and canned food. The product passes from one stage of production to another along a production line.
- Just-in-time (JIT) (production): This method of production is mainly used in FMCG or Restaurant industry. Products are produced based on flexible customer orders.
Past years brought new challenges for food and beverage manufacturers, and future years will have its own set of issues that manufacturers will have to face to boost sales and increase customer loyalty. There are eight major challenges manufacturers could face in the coming year.
- Consumers avoiding center of store products
“Consumers have been shopping that perimeter of the store at the expense of the center of store categories, so that’s obviously a challenge that’s weighed on traditional packaged foods companies
- Healthy and clean label vs. diet-friendly
Consumers aren’t as focused on foods fit for dieting in terms of cutting fat and calories as they once were. Many are now more motivated to purchase products they deem to be more closely aligned with health and well-being, such as products devoid of artificial ingredients, GMOs, or pesticides.
- Rise of natural and organic products
“If you can’t beat ’em, acquire ’em” has been the motto for many major food and beverage companies this year as more manufacturers acquire smaller natural and organic companies that are slowly eating away at legacy brands’ market share.
- Adapting to shift toward e-commerce
Industries like consumer electronics, appliances, toys and games, and other household products are already firmly established in the e-commerce space, but food and beverage manufacturers have overall been slower on the uptake.
- The anti-sugar movement
With major organizations like the WHO and FDA coming out against high sugar intake, the latter recommending a cap of no more than 10% of daily calories, more consumers are turning away from foods that are high in sugar, particularly soda.
- Adding value to products
Value-added foods and beverages, such as products fortified with vitamins, minerals, or protein, are becoming more popular as consumers look for more than just flavor and price when making purchasing decisions.
- Slow product innovation cycles
Bringing to market new products that align with emerging consumer trends in a timely manner is difficult for many food and beverage companies as the process of creating new, relevant products and moving them through R&D, testing, and marketing to retail takes time — often more time than companies would like.
- Making products more convenient
The growth of snacking among consumers has caused manufacturers to rethink the design and packaging of their products to make them more convenient and appropriate for eating on the go.
CPI Consulting Associates; specializes in SAP Analytics solutions which can reach, engage, and serve consumers with timely, tailored, and relevant information and offers along the entire path to purchase, seamlessly across all channels.