The UK’s largest and fastest growing manufacturing sector, food and beverage manufacturing is a £31.1 billion industry. But, with pressure to reduce a plethora of entities from carbon emissions, costs and recalls to the amount of sugar in our food, while being ready to adjust labelling in the face of a no-deal Brexit, it’s a hugely challenging market to be in.
Time to digitalise
Highly sensitive to consumer trends and buying behaviour, it seems not a week goes by without a new trend hitting Instagram, whether it’s avocado toast, meat-free produce or artisan gin, or products which reflect the gluten-free, nut-free or dairy-free requirements of an increasingly allergic population. And the sector is never far from a contentious headline, with the last decade seeing a whole host of scandals from the high profile horsemeat crisis to false sustainability claims, as well as an abundance of recalls which have leapt by 40% year on year. These issues show few signs of abating and combined with a host of regulatory pressures, all point to a tricky decade ahead.
Yet, the food and beverage industry is arguably ill-prepared for this landscape, representing one of the least digitised sectors when compared to say, aerospace or electronics. In fact, one industry expert claims that half of all food firms have processes that include significant paper-based planning, with some larger players completely paper-led. This is party owing to the fact that the sector has traditionally enjoyed healthy profit margins and has therefore resisted the impetus to invest. However, as the expanding list of challenges bite and margins are squeezed, this is no longer the case. Consumer pressure for price, quality, choice, transparency and convenience are converging, placing even greater demands on manufacturers, and we’re likely to see an increasing number invest in new technologies over the next 12 months as companies seek to build market share.
When evaluating new technologies, it really can be a minefield. Larger ERP players often claim that big is best for scale, and smaller, niche players typically provide more tailored functionality designed for the specific requirements of a food and beverage manufacturer.
The reality is that both approaches are necessary in establishing the right digital capabilities. The right system must be designed specifically for the needs and nuances of the food and beverage sector to support issues such as shelf life exposure, origin transparency and consistency, but crucially, must have the scale to support future growth.
Modern food industry-specific ERP systems bring together key business processes from across the organisation to instil the necessary visibility and agility from which to respond to market changes and seize new opportunities. Capabilities to support recipe management, traceability, quality and compliance avoid arduous manual processes and instil confidence, allowing executives to focus on making the best decisions to drive business growth rather than administration.
And the right systems represent a platform from which to take advantage of new technologies such as Industry 4.0, IoT and AI in order to accelerate performance through optimising efficiency and quality.
A healthy future
As we move into the next decade, there is no escaping the fact that in order to bring new, quality products to market faster and safely, while maintaining healthy profit margins, digitalisation is imperative. Having the agility to flex and make decisions quickly is paramount in serving the modern consumer and those who resist investing in new technology will simply be left behind.