IT trends in the food and beverage industry are constantly evolving in response to market changes. Rising costs, changing regulations, and increased process complexity require businesses to innovate to stay competitive.
Digital transformation can be a real innovation-driver for food and beverage businesses, with successful technology adoptions having the potential to create new industry leaders and deliver business success.
But which technologies are leading businesses adopting, and what market changes are they responding to? Weโve reviewed the digital transformation and IT trends for the food and beverage industry so that you donโt have to.
What are the leading causes for rising costs in the food and beverage industry?
While rising costs are felt everywhere, the food and beverage industry has been hit exceptionally hard. In the past five years alone, world events have resulted in increasing operational costs and decreased consumer buying power.
Global conflicts have caused frequent supply chain disruptions, halting productivity in affected areas and increasing demand along unaffected routes as well. As a result, many supply chain routes are now oversubscribed, resulting in port congestion and frequent shortages.
The impacts of the pandemic, which the industry is yet to recover from fully, have also contributed to rising costs. Experienced workers retired in droves in 2020, hastening the growth of the skills gap significantly. This skills chasm (as it could now be called) has caused wage inflation, made hiring more difficult, and decreased employee retention rates significantly.
Of course, the state of the UK economy has had an impact as well. Energy costs are at an all-time high, and consumers are spending less. This combination of increased operational costs and a smaller overall market has made the food and beverage industry more competitive than ever before.
Behind the digital transformation trend in the food and beverage industry
While these challenges make the food and beverage industry more competitive, this can be a blessing in disguise. The industry may be more difficult to operate in, but everyone is facing the same challenges.
Recently, industry leaders have turned to digital transformation and modernisation to gain a competitive edge and increase their market share by leveraging new solutions that automate work, diversify procurement, reduce waste, and decrease operational costs significantly. They have achieved this by:
How to minimise compliance effort while ensuring quality control
The regulations around supplying food and beverages are becoming increasingly hard to navigate. Standards, procedures, and requirements are changing faster than ever before, especially where sustainability and food safety are concerned.
In the UK especially, the rate of compliance change caused by Brexit has been a real challenge. These requirements add increased complexity and cost to operations. But, as failure to comply leads to financial penalties, loss of consumer trust, and lawsuits, businesses have had to keep up.
Certificates of analysis (or COAs) are a great example of a time-consuming compliance requirement. Theyโre vital for ensuring the quality and safety of ingredients, but are incredibly time-consuming to review. AI-driven automations can significantly decrease the manual work involved. When implemented properly, AI takes a first pass and employees review and sign off (or change) the output โ cutting days of work down to hours.
Leading companies utilise cloud-based solutions like Microsoft Dynamics 365 to ensure they meet requirements without a significant upfront investment. Businesses that adopt it benefit from increased supply chain transparency, consistent quality control, simplified product lifecycle management, and improved forecasting through AI-driven insights into consumer spending and market trends.
Optimising processes & increasing efficiency through real-time data and AI-insights
AI can process enormous amounts of information in seconds โ taking dozens of factors into account in real time. The efficiency gains and process optimisation that AI-powered solutions bring to the food and beverage industry should not be underestimated.
Businesses using AI-driven solutions get real-time data on their business operations, such as inventory, order tracking, and purchasing information. They can use this to optimise spend, automate time-consuming processes, and forecast against market fluctuations or customer trends.
There are applications in sales and marketing, too. AI-powered agents allow businesses to automate product description, translation work, and customer engagement โ without a reduction in quality.
Technology advancement means that benefits like these are available to small and medium businesses as well, not just large enterprises. Many solutions are designed specifically for SMEs and SMBs and can be used to automate tasks, optimise workflows, and increase efficiency.
Technology adoption for waste management and sustainability
Innovators in the food and beverage are using technology to reduce waste and be more sustainable, which improves their margins and reduces overall spend.
They use cloud-based systems (like enterprise resource planning solutions) to easily review processes at every stage of their product lifecycle. This allows them to spot bottlenecks, accurately forecast ingredient and material needs, and reduce time and ingredient wastage significantly.
There are added benefits to this, too. Sustainability is a top priority for consumers in our green-conscious society. Naturally, these sustainable companies are more attractive to consumers. This is beneficial to businesses that deal directly with consumers but also to those that supply resellers, as consumer perception will influence their decision-making.
The growing need for cybersecurity in the food and beverage industry
There is one downside to the rise of digital transformation in the food & beverage industry. As technology adoption has increased, so has cybercrime.
The news is full of suppliers and manufacturers who experience ransomware or cyberattacks, including a recent attack on M&S and an attempted hack on the Co-op. At the time of writing, M&S is still recovering from the hack, which was noticed first months ago.
Attacks like these can disrupt entire supply chains and shut down business-critical systems. Even when resolved, the news of an attack can decrease consumer trust in your business for years to come. This is why food and beverage leaders value cybersecurity, digital reliance, and modernisation equally. After all, the more technology a business has, the more opportunities there are for cybercriminals.
Robust cybersecurity measures minimise the risk of an attack, but nothing can eliminate it entirely โ which is why digital resiliency is so important.
An established back-up and recovery process, for example, will ensure a business can continue to operate even if they are attacked. To learn more about the essential processes required for digital resiliency, read our data backup and recovery guide for SMEs.
Digital transformation in the food and beverage industry: Where Managed Service Providers come in
For many food and beverage businesses, adopting new technologies can be a real challenge โ especially when resources are stretched thin.
After all, hiring IT specialists is expensive and time-consuming. This means building an in-house team isnโt always an option and โ even when it is โ there’s no guarantee your business will have the internal skillset needed to drive technology improvements.
This is where Managed Service Providers (MSPs) come in. They provide access to experienced professionals with industry expertise, which allows businesses to innovate with confidence.
Any work undertaken follows a pre-agreed service level agreement (SLA) which ensures investment isnโt wasted. And businesses can choose the level of support they need, from a complete digital transformation to ongoing support with existing solutions.
The result? Food and beverage organisations that use an MSP can stay agile, scale their technology as needed, and focus on growth โ instead of infrastructure.
We work with businesses in the food and beverage sector every day, helping them find opportunities for digital transformation that will drive business growth and increase operational efficiency. If youโd like to modernise your business, get in touch today.
