Post-pandemic Tech-led Innovations in Food & Beverages Industry

Jan 12, 2022
Infor | 7 min READ
We are in for a BIG BANG transformation in the food & beverages industry, all thanks to the COVID-19 pandemic, which has made technology adoption evident to survive in these highly challenging times. Companies don't have a choice to be tech-savvy, but today is a MUST for their survival. The sooner they realize it, the faster they will regain their market share.
Joher Aurangabadwala
Joher Aurangabadwala

Global Practice Director



If the last two years have taught food & beverage companies anything, it had to be prioritizing agility and resilience. COVID-19 pandemic has been a great leveler for every industry vertical. Food & beverages is one such industry that has witnessed one of the most significant upheavals during COVID-19 times. With it being under the essentials category, the onus of getting products to the customers amid the prevailing challenges took a toll on the companies. While they rejigged the delivery mechanism to drive sales, what came to the rescue in a big way was the interception of technology at every single node, be it the raw material sourcing, inventory management, last-mile delivery, or managing omnichannel platforms. The pandemic has also brought technology at the forefront to deliver goods to consumers during such challenging times. Let's understand what transpired during these past 24 months and how the scenario is slated to shape up as we move ahead.
Tracking F&B Trends
As mentioned earlier, digital adoption has seen a significant uptick during this time, driven by changes in consumer habits. Be it food delivery Apps, online grocery delivery, or BOPIS (Buy Online Pick Up In-Store model), consumers were forthright in trying newer avenues that deliver the goods faster. The long queue at the supermarkets shoved consumers away, and the place was happily captured by online platforms in all the formats, be it groceries, food delivery, or even medicines. What drove this stupendous growth were factors such as contactless ordering, payments, and deliveries, which are fast becoming new trends in the F&B industry, especially in the B2C segment of the supply chain.
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Shifting gears from in-person buying to e-commerce
While grocery purchases have taken the lead role, consumers also changed their shopping behavior. Foot traffic plunged as the public no longer felt safe browsing shelves and lingering in aisles. In response, online grocery sales surged to an astonishing 300% early in the pandemic. Although the growth might fizzle out a bit on the other side of the pandemic once consumers return to in-person shopping, the change would undoubtedly be a lasting shift in online ordering. The current estimates predict e-commerce to grow at about 21% of total grocery sales by 2025. Maintaining efficiency in the traditional business model is equally imperative, which is where a uniform product suite across business lines helps achieve the objectives. This is where the omnichannel format is the right fit for companies to adapt and grow.
Forward-looking companies are fast shifting their focus on the 'digital shelf' to make their products visible online when shoppers make buying decisions from their favorite retailers. Some companies have even ventured into the 'direct-to-consumer' (DTC) format in this uncertain environment to create a direct relationship with their customers, rather than relying on retailers and other middlemen. Nestlé, for instance, has acquired a majority stake in the healthy recipe box and prepared frozen meals company, Mindful Chef to strengthen its food and direct-to-consumer offerings in the UK and Ireland.
Imposed new hazard controls
Food safety remains a vital part of F&B companies' everyday operations. The Centers for Disease Control and Prevention had already reported long back that there is a very low risk of contracting COVID-19 from food and packaging or treated drinking water. Safety remains a top priority for F&B businesses operating during the pandemic, and there are still many food-borne health risks that need immediate attention. Due to the onset of COVID-19, food safety observance and enforcement have been at their peak. As a matter of fact, various Food Safety Authorities have been continually monitoring scientific literature about the possible role of food in the transmission of SARS-CoV-2, altering guidelines and imposing newer rules and regulations. e.g., EFSA (European Food Safety Authority) opinions that there is no evidence that the food is a source or transmission route of SARS-CoV-2; however, advises applying disinfectant procedures (62–71% ethanol, 0.5% hydrogen peroxide, or 0.1% sodium hypochlorite for one minute exposure time). Additionally, consumers prefer to choose locally made products over imported products and are being cautious of Country of Origins. Moreover, the pandemic has fast-tracked the demand for healthy & sustainable food products, a trend that could have taken years has become a reality today as people have become more health-conscious due to the COVID-19 pandemic.
Technology in F&B - Knight in the Shining Armor
The critical ingredient to sustainability and success is a robust IT landscape powered by cutting-edge technology and a proven product suite. Companies need to ensure the reliability of IT infrastructure by moving on to Cloud solutions, and they need to leverage mobility and e-commerce platforms provided by market leaders. QMS (Quality management systems) integrated with Core ERP systems play a vital role in ensuring the procedures are followed along with accurate traceability data & evidence to build trust and reliability of Food safety procedures. The best food ERP software facilitates deployment from the cloud, offering companies a greater level of flexibility regarding where and how work gets done. New vendor development, contract management, quick turnarounds and easy onboarding of partners, liaison with vendors/logistic partners are areas where technology has come to rescue companies.
Technology in F&B - Knight in the Shining Armor
Artificial Intelligence in the food & beverage market was valued at US$3.07 billion in 2020 and is expected to reach US$29.94 billion by 2026 at a CAGR of over 45.77% between 2021 - 2026. Changes in consumer demands toward preferring fast, affordable, and easily accessible food options are the factors transforming the F&B industry, with market leaders deploying advanced technologies, such as AI and ML, to scale operations. AI is also helping F&B companies with supply chain management through logistics, predictive analytics, and transparency. Kewpie Corporation, a Japanese food processing company, has implemented AI-enabled TensorFlow machine learning to detect food anomalies. The company is further planning to increase the use of AI in the future, which will help them maintain strict safety standards.
The Food Robotics Market is slated to grow at a CAGR of 11.6% from 2021 to 2028 and reach US$2.02 billion by 2028. The factors driving the change have been the rising demand for high-quality and ready-to-eat food. Besides, the need for productivity and efficiency in the food processing activities such as palletizing, packaging, and grading to achieve food safety standards is also significantly boosting the growth of robotics in this sector. According to the Robotic Industries Association and Association for Advancing Automation, orders of robotic systems by food and consumer goods manufacturers grew by 43% in Q3 2021. One of the most innovative examples of robotics adoption in the F&B space has been displayed by Miso Robotics, the startup that is transforming the foodservice industry with intelligent automation. The company recently unveiled the newest model of Flippy, its flagship product, aptly named Flippy 2. Back-of-house positions at quick-service restaurants (QSRs) have historically been labor-intensive, physically demanding, and can be hazardous given the proximity to hot oil and grills in compact kitchens. Flippy 2 envisions eliminating these pain points and creating a better working environment for its human coworkers while maximizing the kitchen's efficiency.
The Time is NOW!
The global food and beverages market will grow from $5838.8 billion in 2020 to $8163.61 billion in 2025 at a CAGR of 7%. To capitalize on these burgeoning opportunities, F&B companies must track their supply chain processes, which will ultimately enable them to maintain efficient operations and ensure high-quality products are consistently produced and delivered. Traceability also empowers businesses to make better decisions that align with company goals tied to Environmental, Social, and Corporate Governance (ESG). Walmart has been deploying blockchain technology to digitize its supply chain and lessen the time taken to track the source of food contamination. According to the company officials, creating accountability and ensuring transparency across the food supply chain has today become a necessity, especially with food contamination being widespread globally. Blockchain can effectively help trace the contaminated product (even if it is just an ingredient) back to its source and reduce the further spread of food-borne illnesses. Blockchain also reduces food waste due to selective recalls and the rapid containment of the diseases with decreased response times, leading to better recall management.
The future is now for the F&B industry. Technology is revolutionizing the food & beverage industry as the COVID-19 crisis accelerates the pace of robotics and AI. Now is the time to adapt to the tech-led changes to stay in business.
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