Recognizing Challenges and Opportunity
Embracing and driving change with innovation is arguably the best solution for the most rapidly growing challenges in the food and beverage industry, while thin profit margins and competition are the major growing issues. Change is all about integration with innovation. It is important to integrate the latest technology, digitalization, trends and sustainability with evolving consumer (market) needs with a flavor of innovation. Driving innovation with integration in the food and beverage industry is important for creating value and product differentiation.
Regulation and food Safety
In the area of Research and Development in the food industry, innovation, food quality, safety and regulatory compliance are critical factors to considering when developing a product. In addition, food regulations are changing faster and becoming tougher all the time. Two examples of this are the government tax on sugar and the new EU food regulations, along with the growing consumer demand for clean labels, adding more challenges and greater complexity to food labelling. Managing the data from the supply chain and production standpoint is therefore essential in labelling as well.
Consumers are not only interested in their well-being but also the planet’s wellbeing. This concern has brought about a vegan and plant-based revolution in food choices. This is diversifying consumer demands placed on F&B manufacturers, where customers are coming to expect greater sustainability from farm to fork. Traceability is a big challenge, and this requires innovative technology in the F&B industry. Due to climate change, eating habits and the type of food consumers are starting to prefer are all undergoing drastic change. Hotter temperatures are increasing the demand for beverages and ice creams. Predictive innovation is critical for meeting future demands faster and easier.
Consumer behavior and trends
Consumers are moving towards mindful eating by choosing clean and sustainable foods, but they are not giving up their preferences for organoleptic properties. Furthermore, changing health issues and active lifestyles are creating a greater demand for innovative and customized foods, as consumer interest in healthy, fresh and nutritious food increases. So too is an increased preference for organic, functional, plant-based foods emerging. Technology is fueling the transformation of consumer requirements brought about by changing trends.
Start-ups and retailers
Competition is getting fiercer for F&B as retailers have their own brands. In addition, finding the shelf space is in FMCG business is quite daunting, as retailers are increasingly requiring food products in trend. Food Start-ups are evolving faster than ever. Meanwhile, most profitable food startups are not only creating a new market through their products but also innovating products to meet present consumer demands. On the other hand, Big Food has its own set of products and brands. This major industry has to keep innovating new products or reformulating them, a process that requires more resources like cost, time, management and employees. This is presenting some major food manufacturers many challenges in obtaining profitability.
Furthermore, Technological advancements in agriculture, growth of bimolecular sciences and the latest innovations in genetic editing and sequencing technology have started creating highly nutritious crops that could put more competitive pressure on enriched and fortified food manufacturers.
Above all, adapting the latest global trends while remaining steadfast in innovation is very important. For example, demand for plant-based food products is growing. It is important to be predictive and innovative in meeting these new challenges. Recent technological developments have led to disruptive innovations in sugar substitutes, flavors and enzymes. There has to be more focus on food safety, food compliance and food quality in order to be able to win customer trust in the long run. Moreover, being innovative, efficient and creative with recent developments is critical – and this is possible with product lifecycle management.
Going beyond the Common strategies
Merger and acquisitions have been a driving force behind the reshaping of the food and beverage industry in order to meet evolving market demands. Other changes include start-up incubators, cost cutting – restructuring programs and lay-offs. However, the true recipe to success lies in research and development, innovation, new product development and reformulation with the help of product life cycle management.
However, innovation, from product development to proof of concept, is time consuming. It creates too long of a market pipeline in the face of rapidly changing food trends. This means a slower response to consumer needs. When it comes to the food industry, “make it happen quickly” should be the motto. This way of thinking is also critical to developing a more personalized connection with customers through their products.
Due to tough competition and evolving consumer food preferences, the food industry continues to ideate and reformulate new products. This is an ongoing process, which accelerates the introduction of new food and beverage products to market every year, in turn creating a paradox of choice. In addition, the low retail food inflation in recent years is another factor, which has come about as another result of tough competition in the food industry.
Technological advances and research in food science are absolutely transforming and fueling the growth of the F&B industry. Nevertheless, innovation is critical not only to meet market demands, but also for F&B businesses to sustain themselves in the market.
Accelerating growth through driving innovation in food and beverage industry.
Having product lifecycle, data and product data management available are essential for innovation. In the case of product data management, raw material sourcing, recipe development, optimization, targeting, labelling and packaging material are important for developing new products and reformulating existing products.
To make the process easier and to manage innovation in new product development, it is important to eliminate spreadsheets and Excel formulas, and instead adopt to convenient tools like product data management and product lifecycle management.
Making innovation easier through product data managemen
To meet market needs, increase the revenues and grow with a competitive edge, being proactive is essential. To be innovative and proactive to market needs, the food and beverage industry will require leveraging every possible technological tool.
Product Data Management (PDM) is a strategic business approach that applies a consistent set of process solutions to support collaborative creation, management, dissemination and use of product information and data across the extended organization, from the concept stage through to finished product on the market.
Food and beverage manufacturers who have the right system and processes can easily respond to quickly changing market demands, which in turn puts them ahead of the competition.