The food and beverage marketplace is driven by the consumer and today’s consumers are more demanding in all aspects of the buying experience. The industry is getting pressure from consumers who want to know the origin of the products they consume as well as the path they took to get to their door. The reality for many manufacturers is that pressures from customers now carry more weight than pressures from regulators. There is a growing perception that the global food supply chain is not agile enough to respond to current marketplace demands. There is new technology that can help manufacturers and suppliers meet these demands, but in an industry that has low margins, the opportunity to invest in new technologies can be limited. Regardless, experts agree that food manufacturing will see a dramatic surge in technology adoption over the next five to 10 years as the market continues to change and pressures on supply chains and logistics continue to grow. Manufacturers will have to evolve to survive.
The COVID-19 pandemic, climate change, food safety and quality pressures, sustainability initiatives and changing consumer preferences are driving food and beverage manufacturers to utilize advanced tools in all areas of their businesses to remain competitive. Information from the growers and farmers has always been critical to the flow of the entire business and due to the unpredictability of nature, data is constantly changing. Years ago, companies that produced food products whose ingredients were dependent on fresh seasonally grown vegetables, fruits and nuts would employ several people sitting in a room with multiple phones receiving daily reports from the farms. This process was necessary so that planners could anticipate what ingredients were coming and when so that they could create production and distribution plans.
Manufacturing facilities have to stay in constant communication with the farms so they can get as close to real-time information as possible. They relied on phone calls to know the latest information regarding what was being harvested, what was on the trucks, what products were available and when they were available for delivery to the manufacturing facility. It became a scramble to see if the downstream activities could keep up with the input of materials and if what could then be produced would even come close to matching the sales forecast. Today, the phones still ring but they beep and ping too. Text alerts, email alerts and notifications from advanced systems are the wave of the future as new technologies emerge for quicker and much more reliant information.
Typically, food and beverage manufacturers have been reluctant to embrace new technologies. While they are the first to employ new machinery if it will improve yields and reduce manufacturing costs, profits are at a premium. In fact, all costs, not just operational costs are crucial to business success and this reality has inhibited investments in other areas of technology that could help their businesses grow, improve yields and increase profit margins. But reacting to customer pressures and the changing nature of their industry, smart manufacturers have begun using IoT and advanced technologies to improve their business operations.
The digital revolution has had an ever-increasing impact on critical steps of the food and beverage supply chain; procurement/supply, manufacturing and distribution. A great deal of the focus has been placed on the upstream processes of the supply chain in the areas of farming and agriculture. Long gone are the days of a farmer grabbing a handful of dirt and throwing it in the air after reading his annual copy of The Farmer’s Almanac. Traditional agricultural methods are slowly being replaced with precision agricultural methods.
Precision agriculture is a process that uses a variety of IoT devices to allow farmers and growers to maximize land use by increasing and optimizing crop yields. Farmers use guidance systems, GPS systems, soil monitors, and other diagnostic tools in fields to improve growing conditions and provide crucial information. Drones monitor growth and soil quality, search for pests and communicate back to the farmers. Technology has become even more important to the downstream links of the supply chain with robots harvesting crops and tending to a variety of farm tasks. Automating and improving the farming process will lead to bigger product yields and just as important, valuable information that can assist in producing profitable, sustainable and safe-to-eat food.
Food and beverage manufacturers have always tried to use state-of the-art manufacturing equipment when it comes to the actual food production. Throughput and efficiency is the key to maximizing profits especially when they are at a premium. However, food manufacturers are now going beyond better mixers, ovens and packing lines. They are implementing sensors that detect quality flaws and robot machinery to fully automate a streamlined manufacturing floor. Sophisticated Manufacturing Execution Systems and production execution systems communicate with the tools used for the forecasting and distribution processes. 3D printing is being investigated as an option for replacing cumbersome extrusion machines. Beverage manufacturers are investing in continuous flow processing for beverages which results in a much more streamlined and high volume operation than the traditional make and pack operation.
Knowledge is Power
Advanced technologies that give food producers the ability to learn about consumer buying habits are increasingly being deployed through the industry. The information now available to manufacturers is incredible. It gives insight to both the upstream and downstream processes of the supply chain and helps keep them connected. Thanks to the ability to compile buying trends, manufacturers can learn what products are being purchased and when they are being purchased. They input this information directly into the forecasting process which sets the wheels of the entire supply chain in motion. Smart labels, basically QR codes printed on products that consumers can use to get product information, now have the capability to relay information back to the manufacturer. New forecast-enhancing technologies such as Blockchain are being used to gather information about consumers purchasing habits via data collected through the credit system. This information significantly impacts the upstream processes as a more accurate finished product forecast results in a more accurate forecast for supplies and ingredients. With this new information, farmers and growers can have far more accurate data for better crop planning which can maximize field and soil usage and assist in the tracking and tracing of products from field to fork.
Advanced technologies are already impacting and changing the way food and beverage manufacturers operate their businesses. But, we have only reached the tip of the iceberg. These new technologies will help food manufacturers be intelligent, innovative and agile. Real-time insights about operations, market environments and customers will enable smart decision-making. Manufacturers are now able to impact the market with new processes, service and products and rapidly respond to internal and external business changes. It’s a win both for the manufacturer and the customers.