From pleasing the customers to maintaining the supply chain, challenges are heaping over the food and beverage companies one by one. With another year adjoining the proliferation of food industry, more problems are getting added to the list.So let’s have a look at Problems Faced By Food Industry.
Here are some challenges which are nagging the companies to an extreme level:
Nutrition and Health claims:
Consumers are more attentive towards the nutrition and health aspects of the food instead of dieting and cutting calories. Artificial ingredients, preservatives, pesticides etc are banned by the conscience of the customers. Therefore, there is a rise in the acceptance of organic and natural products. Big players like Kellogg are struggling with this ideology of customers. Thus, they changed their diet snack product Special K cereal and shifting its focus as a healthy snack instead of diet snack. Moreover, companies like general mills, Kellogg, Nestle, Hershey, and Campbell vowed to removed artificial ingredients and have clean labeled products.
With internet getting into the hands of the customer, e-commerce is drastically expanding its coverage. Now food has also opted electronic media as one of the sources of marketing and sales. Retailers like Amazon and Flipkart are investing in grocery e-commerce and online businesses and startups like Big Basket, Grofers, etc are taking a toll over big manufacturers.Most compelling evidence for the power of e-commerce is Mondelez, where the company set a goal of $ 1 trillion in direct e-commerce sales by 2020 saying e-commerce would factor its growth. Although, this leads to more challenges of inventory management and meeting the needs of the customers on time.
Not so sugary sugar:
According to FDA, recommended sugar intake is 10% of daily calories, which is a big challenge for food companies. As in every product sugar is present, it can become a problem, as consumers find it as a threat. This has impacted beverage industry heavily. High sugar foods like soda are not acceptable by the consumers thereupon, reducing the sales. To overcome this hurdle, Pepsico came up with mini-cans offering a smaller quantity of sugar per can.
Value-added products and slow innovative cycles:
Customers run after nutrition security and therefore, looks beyond flavor and price. Thus, there is a hype for fortified products which gives more nutrition while maintaining the price and familiar ingredients. For instance, Alovera mixed fruits juices are available in the market which gives health benefits to the customer as well as taste. But launching a new product is a laborious task, with research and development going under and further testing and market research. Certainly, it is time-consuming, moreover, it may lead to less effective delayed trend set.
Biggest challenges for food industries is competition differentiation. As there are new food and beverage producers, diversity has been commoditized. In past 10 years, so much innovation has left the consumer with many gluts of options. Social science reports states, consumers inundated with too many options decreases buying power. Therefore, it is the most challenging situation, to outshine from the rest.
Changing consumer demands:
Most challenges revolve around one entity, customers. Rising demands of the consumer are the root of all the difficulties. With time, trends change and therefore the demand. Thus by integrating new supply chain framework, managing quality and developing new products, industry allow them to serve needs of the consumer without sacrificing price, product availability, convenience, increasing the desire to clean label to demand products.
Adapting to recent Policy and Standards | Problems Faced By Food Industry
For the manufacturers, ensuring food safety is their duty. Ensuring all the critical control points and standards by various food safety associations and organizations like FDA, FSSAI etc. Challenge is when there are changes in the policy, reforms, which determines a change in course of action and procedure e.g., changes in taxes, bans, restrictions, mandatory label schemes, are some examples.
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Root analysis of product lines is necessary especially at the time of auditing. Therefore, record management is mandatory for the company. Companies must invest in meticulous record keeping of the plant maintenance and safety measurement along with quality checks and full transparency with all supplies. Having HACCAP, or FSSC certification builds an assurance of the traceability of the products and maintaining it is a big challenge.
Food Industry is a pool of opportunities, but threats also create problems. To cross the hurdles, the company has to expand its horizon and scan the business environment. With strategic planning and effective decision making, the challenges can be faced for optimum results.