As a result of rising costs, including the global energy crisis impacting supply chains worldwide, manufacturers in the food and beverage industry are constantly under pressure to boost revenue while simultaneously lowering costs.
So, how will investing in the right technology boost your profit margins and ensure your food or beverage business will survive in such a competitive environment? Let’s take a look.
Consumer demands are forever changing and growing. For instance, with heightened awareness surrounding environmental concerns in food production, which was addressed at the recent COP27 summit, manufacturers must place their focus on creating food products that:
It’s important to keep up with these expectations and even stay ahead, otherwise your consumers will decide to choose brands whose values align with theirs. In other words, they’ll buy from the competition instead of you.
The right technology can help you keep up with consumer demands by offering deeper insights into their behaviour patterns, from how they engage with your business (e.g., via phone or website), to understanding the products they’re most likely to purchase.
One of the quickest ways to increase revenue is to sell additional food products towards your loyal and happy customer base. As you’ve already got them engaged, your main focus should rest on building a solid rapport with your customers.
Why? By creating more meaningful relationships, trust is developed, so they’re more likely to think of your brand and choose you when they need a particular product.
Technology like AI can support your up-selling and cross-selling opportunities, as by analysing your customers interactions, you can easily provide personalised, targeted recommendations based on their past purchases.
AI can also alleviate the pressure from your customer-facing teams. With software like a chatbot on your website, customers can gain information about an order, item, or a general query without the need to talk to a representative, offering convenience and a higher chance of a sale in turn.
Boosting your profit margins shouldn’t just rest on your ability to deliver better experiences towards your customers. You should also be exploring how you can reduce your operating expenses in light of the energy crisis.
For instance, it’s now found that over 60% of UK food manufacturers are facing increased pressures on their profit margins due to rising energy costs, with manufacturers now looking for innovative ways they can best utilise their resources, including managing their production and waste across their supply chain.
By introducing technology into your organisation, you’ll be able to:
It’s not just consumer demands that are changing, industry regulations and standards are too. Similar to consumer demands, it’s important to keep up with these expectations to not only avoid losing out to the competition, but also avoid the serious repercussions of non-compliance (such as heavy fines and a damaged brand reputation).
The right technology will give you increased visibility into your processes, so it’s easier to:
If you can manage your inventory more precisely, you can make some significant cost savings. One thing to look out for is unsold stock which may have been in your warehouse or manufacturing facility for a long time. This is also known as ‘dead stock’.
When you have a food-specific solution in place, it’s much easier to monitor your inventory levels and keep an eye on these dead stock levels.
This boost in business intelligence and visibility can help you make more informed decisions surrounding your inventory, better monitor each product’s lifecycle, comply with regulations, and enhance forecasting, all saving you money.
If your business is mostly relying on people, spreadsheets, and multiple disparate systems, it’s difficult to see what’s happening in real-time across your manufacturing operations. That means it’s even more difficult to monitor how your processes are performing and identify any areas that aren’t operating as efficiently as they should.
After all, a loss in efficiency means loss in productivity – which includes time and money.
A food-specific solution can help you connect all your systems to gain a singular view of your business. For example, if you request a report from your IT team, it can take them several days to pull this together due to the complexity of the data. By the time you receive this report, some of the data is already outdated, which can be critical due to the perishability of fresh food.
The right technology can not only ensure your data is up to date and streamlined, but also give time back to your IT teams so they can perform other important tasks at hand.
With the current challenges facing the food industry, there’s no doubt that implementing the right solution will help you cut down your operating costs, from dealing with the current economic crisis to optimising your current processes.
In our future of food guide, we dive deeper into the technology that will drive efficiency across your supply chain, from your production lines to your customer-facing teams, as well as:
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