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QAD 2020 Predictions: Food and Beverage Manufacturing Trends - Using Technology to Disrupt and Compete in 2020

VMblog Predictions 2020 

Industry executives and experts share their predictions for 2020.  Read them in this 12th annual VMblog.com series exclusive.

By Stephen Dombroski, Director of Consumer, Food & Beverage Markets at QAD

Food and Beverage Manufacturing Trends - Using Technology to Disrupt and Compete in 2020

Today, there are more food and beverage product choices than ever and more channels for consumers to buy those products.  For example, the frozen food aisle for pizza is larger than the entire frozen food section from the grocery stores of 20 years ago. The industry is changing and there are no signs of it slowing down anytime soon.  Disruption is everywhere and it is impacting all areas of the food and beverage manufacturing supply chain globally.  Food manufacturers are trying to meet the fast-evolving needs and demands of consumers and government regulators while trying to cope with environmental changes that are forcing them to adopt sustainability practices to not only protect the environment but to compete in the industry.

Companies are struggling with multiple product SKUs with shorter lifecycles, managing costly inventory, requiring more grocery store shelf space while stocking fees rise.  When you add in the need for sustainable and trendy packaging and rising commodity costs, the end result is chaos.  Food and beverage is a disruptive business and to remain competitive, manufacturers need to respond quickly to these disruptions. The way to do it is to become rapid, agile and effective. 

Top 5 F&B Manufacturing Trends to Watch in 2020

So, what does 2020 look like for food and beverage manufacturers? Following are my predictions of a number of growing trends that I believe will continue and new ones that will appear on the horizon.   

1)   3D Printed Food Containers

3D printing for food containers will be approved by the FDA and manufacturers will be able to create products on demand -- eliminating the need to store individual containers of food products at retail location. Storage of individual containers of food and beverage products at retail locations, be it at large stores or company-owned stores is a costly endeavor.  It requires pinpoint forecasting, lots of space and raises inventory costs.  Food grade 3D printing will allow manufacturers and retailers to store products in tanks, vats, kegs, etc. and then 3D print individual containers for consumers to fill with product.  This will allow for creativity amongst consumers making a manufacturer's product more enticing.  It will also simplify the supply chain and reduce costs and increase profits.  SKUs will no longer be shipped from manufacturing plants. Instead, shipments will be made in bulk, creating full packaging and the ability to simply ship labels. Benefits will include, the ability for companies to concentrate on bulk product and not fringe products, enterprise asset management improvements with smaller machines, inventory reduction, reduced time to market and an overall simplified supply chain. 

2)      Customized Food and Drink Products

Health trends will cause manufacturers to utilize augmented reality and AI to offer customized food and beverage products for consumers. Augmented reality and AI have accelerated consumers' needs and desires for customized products in order to be different and consumers will look to these technologies to customize their food.

3)      Order Automation with NFC-Enabled Smart Refrigerators

Refrigerated foods will have near-field communication (NFC) capabilities enabling refrigerators to place orders for consumers. Consumers will scan products via the refrigerators' NFC capability before putting foods into the refrigerator. The refrigerator will receive a notification when that product is low and needs to be replenished. The refrigerator will then send a message to a consumer's grocery app, which will then order the product and sync payment and delivery time with the consumer's mobile payment and personal calendar. The automation of the order process directly enables consumer packaged goods (CPG) manufacturers insight to adapt quickly to end-consumers' needs.

4)      Eating/Buying Locally and in Season

Eating local will impact how manufacturers supply their goods. More and more consumers prefer to purchase locally sourced food. Buying local helps local farms and businesses and promotes community activism.  This preference for "local" will help small manufacturers grow, while simultaneously shrinking the supply chain.  This will impact the profits of the large global manufacturers and they will need to respond.   Major brands will target markets with products featuring local ingredients.  Major manufacturers will turn to local co-packers to enable them to say their products are locally made and sourced. The bottom line is that consumers today are shaping how food manufacturers deliver food products to the marketplace.

5)      Consumer Packaged Goods (CPG) Driven by User Experience

Consumer packaged goods will focus on providing an experience, not just a product. Manufacturers are now trying to link products into a user experience as they begin to target the next generation of consumers. Brands will offer consumers ways to experience their product that fits their lifestyle and individuality. Sport drink and bottled water manufacturers will offer branded sustainable bottles, and apps connected with purchases to track exercising and workouts.  Food products will be linked to tangible consumer goods to complete an experience rather than a single-use item.

All of these trends illustrate changes and disruption in the Food and Beverage industry, and the Consumer Packaged Goods marketplace.  The manufacturer that competes successfully in 2020 and beyond will be the one that embraces digital transformation and advanced technology such as IoT, smart automation, Industry 4.0, 3D printing to stay ahead of market demand, meet the needs of consumers and provide safe, healthy and affordable options. In addition, manufacturers will need to implement flexible processes and systems to allow for the quick adaption to disruptions and the changing marketplace.  The rapid, agile and effective manufacturer will be the ones that combine advanced digital technologies and proven industry best practices to stay ahead of the competition.

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About the Author

Stephen Dombroski 

Stephen Dombroski is Director of Consumer, Food & Beverage Markets at QAD and has over 35 years experience in manufacturing that has been focused on the Consumer Products and Food & Beverage Industries. His career has spanned across the manufacturing, software and consulting industries maintaining a solid focus in Supply Chain Management and Enterprise Systems.  He has assisted Consumer Products and Food & Beverage companies in developing S&OP strategies as well as in the implementation of ERP and Supply Chain Systems.  

He has had held a number of key positions with several leading Supply Chain software companies as well as a leading Food manufacturer.  Stephen brings an in depth knowledge of manufacturing operations and is well versed in many manufacturing systems:  ERP, Supply Chain Planning, Supply Chain Network Design, and APS (Advanced Planning & Scheduling) are just some of areas of expertise. 

Published Friday, December 20, 2019 7:46 AM by David Marshall
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