The Future of Food and Beverage Industry

Fri, 21 February 2020 9:40

The food and beverage industry is a Pandora box of innovations and creativity. While the companies are experiencing advancements, the industry itself is going through considerable consumer, food safety, and regulatory challenges. Technical improvements in food science and technology, both in the sector and beyond, are presenting lucrative opportunities. However, a slight change in innovation and ideas is needed for companies to prosper.

Anyone new to innovation can learn from tricks from the food and beverage industry. The industry has been bringing innovation into the picture constantly. The industry is known for being agile, getting products from factories to the shelf in a much shorter time than other sectors. It is a common myth that there is little risk involved in the operations of this industry. But in reality, food and beverage manufacturers are facing a tough time.  The competition is high and retailers have driven down the prices. Even the profit margins are low as an average household in the UK and the US now spends a smaller proportion of their income on food than they used to spend 20 years ago.

Manufacturers are required to source the ingredients sustainably and ethically, yet they are unable to pass additional costs on the consumers. Essentially, companies are being forced to provide more for fewer expenses, and the status quo is not going to produce returns on investments. On top of that, the industry is facing fundamental challenges in the mainstream consumer and food safety regulatory sphere, which is set to disrupt the industry way more than expected.

The New Age Consumer

The digital revolution has changed many aspects of our lives beyond imagination, including the consumer’s take on the food and beverage industry. The prevalence of smartphones has enabled the consumer to communicate and run operations on the go, directly affecting the individual’s demand for food and beverage, which matches their changing lifestyles.

At the same time, we are witnessing a transformation in consumer behavior and expectations with a rise of holistic health. A holistic health approach is the growing consumer trend that include easting healthy foods that promote mental and physical well-being, support a strong immune system and prevent diseases, being a more purposeful approach that allows consumers to keep a track of their eating and drinking habits.

These two trends indicate that consumers want ‘on-the-go’ options that offer more something more than high fat, high sugar and empty calories. This trend offers lucrative opportunities to companies who can harness food sciences and technology to deliver revolutionary products that meet the consumers’ demands.

The demand for healthy food products has also created an atmosphere of ingredient elimination where the media, lobbying groups and regulators focus on a particular ingredient and try to eliminate out of all foods, for instance, fat and presently, sugar. This is creating a ‘cut-it-out’ culture, where consumers are aiming to exclude certain ingredients from their diet hoping that it will improve their health and wellbeing. The trend is fuelling growth in the free-from markets like gluten-free and lactose-free.

Stricter food safety regulations

The manufacturers are looking to meet continuous demands for minimally, naturally process food products containing clean and natural ingredients (the clean-label trend) while trying to maintain the shelf-life and hygiene standards. Companies have to put their strict food safety strategy which evaluates the risk of possible contamination in food products, like listeria, campylobacter and salmonella. Key concerns about the traceability of ingredients and products have pressured the manufacturers to understand the operations of their supply chain to prevent unethical practices and fraud.

The announcements from the UK government of a tax on sweetened beverage is an example of legislative bodies are taking efforts to regulate the industry. Properly understanding the different international regulatory frameworks will be essential to ensure compliance.

Consumers are looking for food and beverage solutions that keep pace with their way of living. Busy lifestyles and being away from the home mean there is less time to cook and eat three balanced meals a day. Food providers are interpreting consumer needs in creative ways like home-delivered meal kits and virtual retail portals where people can order groceries while waiting and doing regular chores.

Utilizing technology to reach and inform consumers:

Technology also helps consumers to make sense of nutritional information. Instead of reading the nutritional facts on the back of the product, a consumer might be able to scan a QR code using their smartphone’s camera. Fitness trackers and wearables could also incorporate information about products one has consumed.  

Personalizing products to meet dietary requirements:

The increasing awareness around nutrition is taking us closer to understanding the dietary needs at an individual level. Recently, the gut microbiome has become a popular area of research as they play a significant role in impacting people’s ability to digest food and how they will develop intestinal diseases. Researchers are trying to find our differences in taste preferences as to how an individual’s taste perception impacts his food choice, consumption habits and personal wellbeing. As researchers are a better understanding of how an individual’s genetic microbiome-makeup impacts his diet, manufacturers will be able to create better-personalized products to suit consumers’ needs.

The future for more innovations

The way food and beverage industry is embracing innovations also needs to go through a change. While manufacturers might risk introducing a new flavor to the shelf, broader innovations can also come into spotlight. It is essential to make the most out of innovation process and create favorable scenarios for innovations to work.

Intelligent marketing strategies and customer relationship management are the two factors that might improve the credibility of a food or beverage brand, as trust is the most crucial factor when it comes to food. Conscious and mindful eating patterns will continue to dominate consumption trends. Therefore, it is high time for manufacturers to start acting upon the process to support a holistic and healthy living.