The global food industry is trying to keep up with balancing changing consumer preferences, government demands and the realities of the market. And one significant way the industry does this is to look at both the opportunities and challenges in the current supply chain.
By looking at consumer demands that impact today’s global foodservice supply chain, businesses acquire deeper insights on how to improve their systems.
The following are four consumer demands that merit more detailed study and attention:
1. Immediacy and Personalization
For the past few years, consumers have learned to expect immediacy in all aspects of their life. And this trend is expected to grow even stronger in the coming years and across industries. Regardless of whether they are buying a denim jacket, getting Indian tea or purchasing not a product but a service, modern-day consumers want a personalized experience whenever they decide to shop.
As online shopping for food continues to grow, firms in the foodservice industry need to be utilizing the appropriate data management and analytics tools. They need to ensure they are capturing and beneficially analyzing data, and making improvements based on their findings.
However, these technological enhancements are not just for consumers — they also are a means for all members of the supply chain to be digitally connected. As these tools provide access to relevant and real-time data, they can assist firms in thoroughly understanding the information and ensuring a more seamless distribution and fulfillment across channels.
While businesses may initially employ data management technology for customer reasons, they are highly likely also to integrate them into optimizing their supply chains.
2. Diversity and Transparency
Today’s consumers are more diverse eaters than ever before. Whether it is the cuisines they want to eat or their personal preferences for customizing their meals, these consumers want their food in their own particular way.
Organic food sales and farm-to-table restaurants are going through the roof in the U.S. And around the world, more and more consumers are following gluten-free, vegan and vegetarian meal plans.
For this reason, consumers are highly interested in knowing when, where, and by whom their foods were produced and made. Shoppers want to know details about suppliers and production, and the origin and contents of the goods they are purchasing.
More so than ever before, consumers are examining food labels thoroughly and using the information that is provided on the labels to make selective decisions. If these labels don’t offer the specific details of the sources of each ingredient, consumers are increasingly unhappy.
In other words, they don’t want to promote and purchase from retailers who are engaging in what they see as irresponsible practices.
In order to satisfy this increasingly diverse and interested consumer demand, food supply chains will have to focus on becoming more global, cooperative and agile, and concentrate on developing end-to-end visibility.
If they do not, then not only will businesses not be able to answer consumers questions about suppliers and production, but firms also will not be prepared to react to shifting demand (nor will they be able to optimize inventory levels satisfactorily).
3. A Focus on Freshness
Fresh foods are what the majority of consumers want to eat. And while they may be healthier for their bodies, they can certainly pose some serious challenges for the foodservice supply chain.
Generally, fresh foods have shorter shelf lives and quicker turns, as well as necessitate lower inventory levels. As weather plays an essential role, there also are more out-of-your-control elements and potential impacts to the supply when dealing with fresh foods.
Due to a variety of supplier issues, it can be incredibly challenging for those in the fresh food industry to precisely predict supply or perform modifications promptly when unforeseen events occur.
As fresh food “trends” tend to come and go in waves, the customer demand for them often fluctuates, making the market incredibly volatile.
To deal with these issues, food manufacturers and retailers want to work on sourcing from numerous regional suppliers instead of solely depending on one primary supplier.
Network optimization is essential, as is safety and quality assurance (see #4), and accurate demand planning.
Due to the shortened timeframes and intrinsic variability of fresh foods, across the supply chain, clarity, collaboration and communication must be promoted. Otherwise, there is no chance a supply chain and its goods can be successfully managed.
4. A Higher Level of Safety Standards
With so many food recalls and food-borne illnesses around the world, the safety of their food looms large on a consumer’s mind. And, as the food supply chain continues to develop into an even more global network (as a result of another growing consumer demand), the opportunities for contamination along the supply chain increase.
However, it isn’t just bacteria contamination, animal disease, and poor food handling that today’s consumers are concerned about.
More and more questions are being raised about the safety of farming practices, such as the usage of antibiotics, growth hormones and pesticides on livestock and crops. There is also the matter of safety within processing practices, such as the increase of food additives and preservatives.
In order to deal with these concerns and demands from consumers, firms must heavily invest in securing their supply chain, form strategies to handle recalls, and improve product labeling and traceability.
Track and trace technologies improve supply chain transparency, while compliance systems are essential in ensuring that supply chains are maintaining any and all rules. Routine verification procedures need to happen to guarantee continuous compliance.
Again, all members of the supply chain need to maintain open communication to ensure that safety failures don’t transpire, and so that a plan can immediately be adopted should they occur.
That being said, when it comes to safety issues, consumers also need to receive further education about keeping their food safe at home. Whether during preparation, cooking or storage, inappropriate food handling at home can make once-safe food, very unsafe. And it is in the interest of the global foodservice supply chain to promote this education.
How have you noticed consumer demands impacting today’s global foodservice supply chain? If you are in the industry, what are you doing to ensure that you are adapting to the market’s changing needs? Let us know in the comments below!
Jad Asaad is the Marketing Manager at Horeca Trade LLC with more than eight years of experience in digital, online and offline marketing. He started his career in Beirut working in a creative agency and then moved to Dubai to further expand his career. He created and implemented award-winning high-impact digital and offline marketing campaigns that consistently generated revenue streams and improved performance in targeted segments.