These are the 5 challenges the modern food & beverage industry is facing ― and how to navigate them

The food and beverage industry is in a state of continuous change, with each decade defining new consumer trends and innovations. In modern times, companies are adopting a health-centric approach, including personalized wellness products, fermented foods, and plant-based alternatives.

The supply chain is also improving with the help of AI-powered systems that can forecast product demand and reduce food waste. Unfortunately, the sector is far from accomplishing the latter, considering that the UN has revealed that approximately 1.05 billion tons of food waste are generated yearly. Households are the most responsible for it, followed by food services and retail.

This is just one of the many challenges facing the food and beverage industry, so let’s examine a few and discuss potential solutions.

Facing the changing temperatures due to climate change

Climate change is affecting temperatures, leading to either rising conditions that change the productivity of pollinators or lower temperatures that reduce yields. A representative example of how climate change influences plants is cocoa production, which has lowered significantly in recent years due to extreme temperatures.

Climate change has led to considerable rainfall in the world’s cocoa hubs, such as Côte d’Ivoire and Ghana, which increases the plants’ vulnerability to diseases as the flowers fall and cannot fertilize. This triggered a worldwide shortage of cocoa-based products, with consumers seeking alternative businesses that source their cocoa ingredients sustainably and actively contribute to improving farmers’ working conditions.

This shows years of neglect can affect an entire industry and set prices on the roof in a matter of months. Agriculture, along with global organizations, needs to adopt strategies that counteract climate change, which include precision farming (leveraging data on moisture and humidity), improved land use (favoring crop rotation and eliminating deforestation), and better waste management (processing and disposal of manure and ensuring appropriate storage).

Navigating the uncertain consumer preferences

No one is more aware of the changing customer preferences than companies are. However, the rate at which they are making it difficult to keep up and design products and services that answer these demands. The customer audience for the chocolate industry is now seeking products with reduced sugar content, natural ingredients, and evidence of sustainable practices behind the manufacturing process.

A global footprint, ethics and compliance, and an integrated supply chain are important aspects of brands like Ofi, for which sourcing and supplying products such as cocoa, coffee, or nuts must be done with responsibility and sustainability in mind. Therefore, more food and beverage companies approach these values to stay updated with consumer preferences, which include an eco-conscious alternative.

This applies to plant-based meat substitutes, which are gaining increasing popularity. Young consumers, especially, are concerned about how companies treat animals, as well as the agricultural necessities to feed the growing population, so they’re either consuming less meat or becoming vegetarians.

Solving the supply chain disruptions

Supply chain disruptions are caused by numerous factors, including natural disasters, geopolitical events, transportation delays, and cyberattacks. In the food and beverage industry, any supply chain disruption can lead to disastrous food shortages, safety risks, and price inflation. Unfortunately, the rising issues triggered by climate change may lead to more frequent disruptions, such as hurricanes, floods, and droughts, which are occurring more frequently and severely.

Navigating these extreme weather events is considerably difficult, but there are ways to prevent losses by being prepared and having a second plan. Enhancing resilience is the most important in this case, so a plan would include the following steps:

• Identifying potential risk factors in your area and creating what-if scenarios regarding possible disruptions;
• Monitoring and analyzing supply chain data can help keep the operations working due to reliable suppliers;
• Implementing automation solutions to help prevent errors and manage reordering or rerouting products;
• Strengthening supplier relationships that approach resiliency against disruptions and are agile to innovation;

Maintaining food safety and quality concerns

Inconsistent safety standards and shifting consumer preferences pose challenges to maintaining food safety and quality in the industry. Some of the most prominent issues include:

• Hygiene concerns due to contamination of produce that leads to foodborne illnesses;
• Errors in labeling and packaging that can confuse users or even trigger their allergic reactions;
• Lack of flavor and ingredient authenticity given counterfeit ingredients used in food products;
• Shelf-life issues that cause premature spoilage, triggering waste and loss of consumer confidence;

Ensuring food safety over quality concerns requires a series of strategies, such as implementing robust food safety management systems and conducting regular hygiene audits. Obtaining ingredients from reputable suppliers is as important as prioritizing transparent supply chains, which can also help secure product authenticity.

Tackling globalization and its fast-changing regulatory compliance

The impact of globalization on the food and beverage industry has had several advantages over the decades, including the expansion of trade and increased food availability, as well as providing new income opportunities for farmers. However, this also triggered the disadvantages of monoculture in agriculture, including dependency on imported foods instead of self-sustenance for farmers, and the exacerbation of food insecurity in vulnerable regions.

This presents a more challenging task to address as a single business in the food and beverage industry. At the same time, handling the intricate international laws on import and export limitations and health requirements is necessary. However, with coordinated efforts, worldwide enterprises can effectively address these issues posed by regulations and globalization.

For example, using compliance software to automate processes and regulatory updates enables a proactive approach to efficiently meeting market demands. Additionally, collaborating with regulatory agencies will facilitate strategic adaptation to support global competitiveness.

Final considerations

The modern food and beverage industry is facing pressure to deliver sufficient produce to sustain the growing population while navigating challenges related to climate change and shifting consumer preferences. Solutions are diverse and complex, but they all come down to how we do agriculture, collaborate with suppliers, and implement automation processes. Moreover, enhancing measures for food safety and quality will not only secure consumer satisfaction but also deliver products suitable for all consumer segments.