6 Trends to Impact the Future of the Food Industry
6 Trends to Impact the Future of the Food Industry
6 Trends to Impact the Future of the Food Industry
4 Nov 2021John McCurdy
As part of Aptean’s mission to be a future-thinking organization with an eye out for coming developments, we commissioned IDC to conduct a survey of business leaders and create the Food and Beverage Global Trends and Strategic Insights whitepaper.
The report was chock-full of fascinating findings, and the answers received from respondents indicated several trends in the food and beverage industry that will affect operations in significant ways over the coming years. A firm understanding of these shifts in thinking and best practices will allow your company to better prepare for the years to come.
Here are the top 6 emergent trends that will impact the food industry in the near future and the statistics behind them. We’ll also explore some additional implications that these trends carry and the ways in which enterprise resource planning (ERP) solutions are evolving to suit emergent demands.
1. Supply Chains Need to Grow More Resilient
With future global disruptions chosen as the top threat to the food industry over the next five years—43% of respondents chose that answer, more than 5% higher than the second largest threat—it’s clear that business leaders recognize the seriousness of sudden, dramatic shifts like those caused by the COVID-19 pandemic.
The transportation delays and shutdowns that either significantly slowed or altogether ceased operations make it clear that the industry must be better prepared in case another incident of the pandemic’s scale should occur. That means reinforcing existing supply chains and exploring new opportunities for more reliable local sourcing and alternative sales outlets.
Businesses will also be searching for ways to have more control over the movement of their materials and products, as overall supply chain visibility was chosen as one of the top three focuses for risk mitigation. Now that the liabilities in existing supply chains have been exposed, industry leaders are keen to build them back better and stronger than ever before.
2. Businesses Are Getting Serious About Sustainability
Sustainability was selected by respondents as the top trend in the food industry to prioritize over the next year, with 39% of participants choosing that option. This indicates a more serious commitment to being environmentally conscious and reducing waste in the industry and a concerted effort to become “practitioners” as opposed to “posters.”
Responsible and ethical sourcing is a big component of becoming more sustainable, as is optimizing efficiency in use of ingredients to avoid spoilage and other preventable losses. However, with somewhere between 40 and 50% of food waste occurring in the home, educating consumers on the best ways to get the most use out of what they buy will also be important.
A greater emphasis on sustainability efforts is also seen as a risk mitigation measure, as it was the second-most selected response. This reflects the potential negative effects on profit margins that excessive waste can incur, as well as the increasing desire of organizations to actively minimize the environmental impacts of the operations.
3. Big Data and IoT Will See Accelerated Adoption
Respondents to the IDC survey selected big data and analytics as the technology that will have the greatest impact on their organizations over the next five years, with 38% of participants choosing that option. Right behind it was Internet of Things (IoT), which was chosen by 35% of respondents.
The power of analytics applied to a large dataset can lead to actionable insights—that’s one of the reasons that we’ve built tools for that specific purpose into our industry-specific food and beverage ERP solution, Aptean Food & Beverage ERP. Meanwhile, IoT devices like smart sensors, scales and thermometers assist in the collection of data, automating the process and importing readings to the system in real-time for an up-to-date picture of performance.
Notably, some technologies that are prominent in today’s headlines, such as artificial intelligence (AI) and blockchain, were further down the list of advancements that will make an impact on businesses. Time will tell if such developments become prominent in the food and beverage industry or remain primarily the domain of the software and finance sectors, respectively.
4. Enterprise Software Spending Is on the Rise
It’s clear that food and beverage companies are serious about their digital transformations, with 34% of survey respondents indicating an anticipated increase in enterprise software spending of up to 25% and 14% saying their organization planned to increase such spending by more than 25%. The average expected increase was just shy of 8%, making it clear that the investment in a food ERP system or other technological platform is a must.
While there are some barriers holding businesses back from more accelerated modernization —including limited visibility across operations and a lack of awareness of solutions—pushing past those considerations and creating a solid digital foundation is increasingly seen as a necessity for remaining agile, confident and competitive in the dynamic and fast-paced markets of the food and beverage world.
An impressive 80% of all respondents reported improvements in key performance indicators (KPIs) as a result of their digital transformation efforts. This demonstrates how effective purpose-built solutions can be in achieving goals and making measurable progress as an enterprise.
5. Consumers Increase Demands for Traceability and Food Safety
The growing desire among customers for transparency of food manufacturer operations and increased awareness of public health concerns no doubt had much to do with survey respondents picking food safety and traceability as the top focus for risk mitigation. With 37% of participants selecting that option, it’s clear that the matter is top-of-mind for many of the industry’s decision-makers.
Product recalls can damage a business’s bottom line as well as their brand reputation, and several high-profile incidents last year showed just how far-reaching the impacts of a recall can be. Food and beverage companies are looking for tools that can give them complete, bi-directional traceability from one end of the supply chain to the other. As a solutions provider, we’ve made sure that our food ERP system has the features necessary for that level of scrutiny and care.
To further illustrate how seriously food and beverage organizations are taking these matters, consider that 72% of survey respondents indicated that traceability was “important” or “highly important” for their overall business performance strategy. Technology is improving to meet that need, with allergen management features and automated sanitation scheduling—in addition to expedited product recall functionalities—incorporated into advanced systems like those offered by Aptean.
6. Cloud Software Solutions Drive Greater Growth
Respondents from companies with on-premise ERP implementations saw solid growth last year, with their revenue increasing by an average of 1.7% and their profit increasing by an average of 2.7%. The results were even better for those with cloud solutions, though, with their revenue growth coming in at an average of 3.3% and their profits increasing by 3.9%.
The greater security and reliability of cloud deployments undoubtedly helped facilitate those healthy increases, as maintaining optimal uptime is crucial to getting the most out of your materials, employees and equipment. The remote access capabilities and lower up-front costs of cloud setups was likely also key, keeping those businesses that choose this approach agile even in times of disruption and decreasing their financial burdens.
The popularity of cloud implementations is growing, with 38% of survey respondents indicating they had either already moved to the cloud, were in the process of doing so or are actively investigating. Cloud-based networks and ecosystems was also the third most frequently selected option among technologies expected to have the greatest impact on respondents’ organizations over the next 5 years, with 34% choosing that option.
Preparing for the Future of Food with ERP Technology
With so many concerns to juggle and greater demands for sustainability, traceability and compliance—not to mention the pressure to drive profitability—a single cross-functional platform by which your food and beverage business can manage all aspects of operations is a necessity.
An industry-specific food ERP solution makes the ideal foundation for preparedness and empowerment as a food and beverage business. Even if you already have such a system in place, it’s vital to critically assess its fit with your needs and consider the ways in which your organization could achieve better results with more specialized features, integrations with other cutting-edge technologies and an experienced solution provider on your side.
At Aptean, we strive to act as a partner to our clients, and we leverage our food and beverage industry experience by building our offerings with best practices in mind. We’ve implemented Aptean Food & Beverage ERP successfully for thousands of customers, and they’re now enjoying the benefits of the best-in-class tools we’ve packed in during development.
We also offer flexible cloud implementations, and the Microsoft Dynamics 365 framework underneath our solution lends it familiarity with new users and the guarantee of regular upgrades and improvements.
Want to hear more about how Aptean Food & Beverage ERP can help your organization tackle these food industry future trends? Contact us today.
We also invite you to download IDC’s Global Food and Beverage Industry Trends and Strategic Insights 2021 whitepaper free of charge, and you can check out any of the engaging sessions from our Global Food and Beverage Symposium on-demand.
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