The Outlook for Digitalization in the Food and Beverage Industry
Digitalization in the food and beverage industry has had a radical effect on factory production and distribution.
In a world dominated by smart technology, the Internet of Things devices, and automation, it should come as little surprise that businesses are adopting new tech to improve their processes and competitiveness.
We recently did a piece talking about the food distribution side of the industry, and how technology is driving it through new technologies such as smart sensors and virtual inventories.
And while distribution is seeing significant changes, digital transformation as a whole in the food and beverage industry is rapidly changing the environment through a raft of tech being implemented by organizations.
Today, we’ll be taking a look at those technologies, and how they’re changing the way companies are doing business.
Making More Use of Data
Businesses today have a tendency to sit on mountains of data without understanding how they can fully utilize it to improve their operations.
In many cases, leaving unattended and unused data can lead to the inadvertent creation of data silos, which are data sets that are extremely difficult to access from different departments of a business.
87% of organizations have low analytics and business intelligence maturity, meaning data isn’t being utilized.
What this means for businesses is that they’re unable to gather insights and make the changes necessary using data that they already have.
Companies are increasingly using software to establish a transparent view of a product’s lifecycle; from design to manufacturing to service.
This makes decisions a lot easier for businesses, as they are able to identify product issues they couldn’t before and use descriptive and prescriptive analytics.
On the logistics side, organizations are using ERPs in greater numbers than ever before because of its similarly useful analytics capabilities.
51% of CIOs consider a cloud ERP the best way to retain control and meet organizational directives.
Small manufacturing plants that adopt an ERP are seeing a reduction in operating costs—11% on average—in addition to other benefits like real-time data visibility and improvements in office processes.
Food and beverage companies are using solutions like ERPs to help them identify business opportunities that were previously “hidden”, as well as curtailing products and features that analysis is showing do not drive business well.
Meeting Regulation Standards
Compliance is one of the most important factors of modern digital transformation, yet for many, it’s an issue they lag behind with.
There are several reasons for this, one of which is simply that decision makers are unaware of how far the digitalization efforts have gone and subsequently how much data needs to be safeguarded.
It should come as a surprise to absolutely no one that the food and beverage industry is one of the most tightly regulated industries in the country, with numerous FDA regulations and acts, like the Food Safety Modernization Act for example.
Organizations are having to update and modernize their approaches to the principles of HACCP (Hazard Analysis and Critical Control Point) by using ERP systems.
Using technology for the HACCP process and maintaining databases helps organizations with every step, allowing them to monitor their products with total visibility and ensure compliance with food safety standards.
It’s worth noting that the FDA has authority over approximately 75% of the U.S. food supply, and regulation change is not uncommon.
In short, implementing a system with which you can effectively track and monitor your products from start to finish not only puts you in a good position for the present, but gives you the added ability to change course should a new rule come into play.
Detailed monitoring is crucial for compliance, and with food safety under more scrutiny than ever from officials, it’s crucial that organizations act now to prepare themselves for later.
Connecting the Organization
Tracking and tracing is one of the most important aspects of any food or beverage production line.
The visibility and transparency that is so important for compliance is attained in no small part through the implementation of sensors and extending the use of IoT technology within the business.
Although almost 60% of U.S. food and beverage manufacturers use the IoT to track and trace ingredients, less than half are using the advanced analytics the IoT makes possible.
Sensors drastically help numerous processes within a plant, not least tracking and storing large amounts of data relating to the manufacturing of products.
You can, for example, track temperatures, humidity, and sunlight exposure to name a few; giving a greater understanding to decision makers on how variables like water control and humidity can be altered to improve efficiencies—reducing operational wastes where possible.
Additionally, many of these devices are WiFi-enabled and can be connected to a cloud storage service.
This has opened new doors for organizations, offering them a relatively simple way of handling large data sets with few issues.
The cloud has other advantages too, the most obvious being that it facilitates the use of systems for analytics in ways that have previously not been possible.
By connecting IoT and smart sensors to the cloud, and then integrating a software solution that can use the data provided, you can get actionable insights for your products and business.
74% of companies say that cloud has provided their organization with competitive advantage.
Going forward, smart technology and devices will be integral aspects of food and beverage digitalization in organizations.
It’s difficult to discuss where digitization in the food and beverage industry is going without mentioning automation.
Many of the above technology implementations benefit in one way or another from automation of some kind.
Take sensors for example. Predictive maintenance, in which automated software solutions use machine sensor data to recognize when there is an issue, can be used to prevent a costly repair expenditure down the line.
This type of automation for the purposes of quality control throughout your supply chain can enormously benefit your operations, and the centralization of these systems through a common management system solution will allow you to make changes quickly and effectively.
Then there are completely different uses for automation, for example determining new needs (and business opportunities) for your customers.
Food and beverage manufacturers are investing heavily in automation; 80% of them have more than 100 SKUs, and that number of SKUs is expected to increase moving forward.
Producers are expected to offer more products than ever before. Customers have a growing hunger for new trends, like the popularity of meat-free burgers, or organic produce.
Automation can help gain a far greater understanding of what exactly the market wants, allowing you to invest in the right SKUs for the future.
- Digitalization in the food and beverage industry is on an upward trend that is unlikely to curtail.
- The uses and applications of automated devices helps businesses maintain their compliance.
- Utilizing big data sets within an organization provides new opportunities for growth by reducing inefficiencies and gaining further insight into customer needs.
In light of recent events, many organizations have found themselves playing catchup, trying to implement makeshift cloud solutions to make up lost ground while their organizations see drastic transformations and challenges to their supply chains.
To find out more about how the cloud can ensure your business is in good shape for the future, download our eBook, “Which Cloud Option Is Right For Your Business?”