The conscious consumer checks the food sector

A series of wide-ranging, but preliminary, technological initiatives are being developed to help major food marketer associations meet customer demand through more environmentally friendly packaging and greater visibility of the food chain. supply. These efforts seem aimed at ensuring that companies that dominate this sector today continue to do so in the future. But it seems more likely that while leading brands address these changes, a number of new companies and products rob them of market share, forcing global leaders to readjust.

• A 2018 study by the Food Marketing Institute & Label Insight Institute revealed that 75% of shoppers will switch to a brand that will provide them with more detailed product information than is provided on the labels – with a significant increase from 39% of buyers in 2016.
• In 2017, a study by Ingredient Communications suggests that 75% of buyers pay an additional price for food with a clearer labeling with simple and simple ingredients that the consumer can recognize and trust.
• Another Packaged Facts study has revealed that in major demographic groups that include Millennials, Generation X, Hispanic and Asian buyers, and households with incomes equal to or greater than $ 100,000, they are more likely to buy products with transparent labeling

Exhibitors of food stores worldwide are dominated by a small set of packaged consumer products companies, often with deficiencies in these areas of corporate social responsibility. The most well-known products for decades and that have made multi-million dollar investments in advertising must now be completely redesigned. Or, alternatively, large companies in the sector must diversify with fresher and healthier products and with a more ecological packaging. An important marketer, Campbell Soups, has already tried without success, after an aggressive merger and acquisition initiative in the area of ​​fresh food. Subsequently, they chose to fight in retreat because they were not sure that their company, long associated with their traditional products of canned soup concentrates, could join the fresh food category.

OpenSC uses Blockchain technology to allow users to scan the QR code of a product or a restaurant menu to see all the information on the history of a food. Nestle, Procter & Gamble, PepsiCo and other large companies in the sector are collaborating with Loop, with the aim of replacing single-use containers with reusable containers delivered to homes.

However, one of the main barriers for these large companies to meet the demand of conscious consumers is that the software on which their business operations are supported, from a financial point of view, is disconnected from the systems used for the provision of its raw materials, the formulation of its production sequences and the manufacture of its products.

This disconnection means that managers cannot easily see how the reformulation of a product, so that it has a clearer labeling, affect their income. Also, these enterprise-level software systems have not been designed to easily launch new products, and their introduction into the quality control testing regime, their programming at the plant and the production sequences that condition the processes. Shopping and manufacturing can be expensive and laborious.

Likewise, the fact of working with more fresh and perishable products instead of more stable products and ingredients, with longer storage times, means that a food producer must have the ability to plan the production of daily orders, and planning and programming is one of the things in which enterprise software solutions such as SAP have the most difficulty in executing it.

They will have difficulties in managing shorter storage periods for a global reduction of plastic and packaging materials. They will also have difficulties in providing consumers with greater visibility of the supply chain. Rigid and inefficient business software in these areas is an additional difficulty that must be addressed by large food and beverage companies. Traditional and consolidated food products, marketed by companies with a traditional technology, are more vulnerable than ever to the more agile, fast and aggressive emerging companies.

Thanks to more modern and integrated enterprise software systems, emerging companies can already provide consumers with the transparency they demand.

Also, for producers in the food and beverage sector who have committed themselves to providing fresher ingredients and a lower number of artificial preservatives, essential elements for foods with clearer labeling, modern software systems are important. Integrated planning and scheduling of demand helps them maintain a sufficient volume of raw materials to meet orders daily and minimize waste materials. A new methodology called Demand-Driven Materials Requirements Planning (Demand-Driven Materials Requirements Planning), allows them to create strategic stocks of raw materials so that they can meet a surprise increase in demand or orders, due to new weather patterns or new retail stores.

Gaia Herbs, a company of nutritional supplements, has a website where it offers its customers all visibility about the origin and supply chain of its products. From the producer, to the manufacturing lot and to the machinery operator, consumers can see where their specific batch of products comes from and who have intervened in all their processing.

It is important for Gaia Herbs to guarantee its customers that they can track their final products throughout their processing from the source, including all the results of the tests performed. However, the company has been providing this service to its customers through manual processes.

Technology should not only facilitate this automation but also allow food and beverage companies to add new information points such as the name of the operator of a particular manufacturing lot, for example. As companies grow, they look for ways to use technology to bring their customers closer, not to keep them away.

Also, manufacturers are more frequently required to document the sustainable origin of specific ingredients such as palm oil, whose crop is linked to the loss of biodiversity from tropical forests in Asia, Africa and Central America. To address these challenges, interest groups in the sector have set up a Round Table for a Sustainable Palm Oil RPSO (Roundtable on Sustainable Palm Oil), which has implemented global standards for the responsible production of palm oil. Producers should avoid expanding plantations and instead strive to increase production of existing plantations and choose to plant in areas that were not previously forestry. Currently, retail stores in Europe and increasingly in other parts of the world are requesting certain percentages of palm oil with the RPSO certification. Companies can respond to this requirement based on a powerful ability to track the lots and the supply chain, to provide a solid and detailed documentation of the origins of each ingredient and the percentage of certified palm oil.

While the main companies of packaged consumer products constitute alliances and experiment with Blockchain technology to overcome the problem of inadequacy of their own software systems, emerging companies with more flexible and flexible processes are better positioned to facilitate Consumers aware of their health and society, the transparency they demand. Likewise, the business software will provide them with the agility they need to manage fresher foods, which require a shorter storage period and a packaging that keeps them in good condition for longer.

The good news is that these new factors that have come into play in the food and beverage sector will allow new competitors to emerge. An opportunity for the most innovative management teams, to compete to beat the big companies and market the options of fresh products, respectful with the environment and with the information of the follow-up demanded by the conscious consumers.