Digital Transformation in the Food and Beverage Industry – Key IT Takeaways for 2024
Background
As you know, Fusion has particular expertise as an MSP providing IT Services to Legal Practices and Logistics Firms and, as such, we like to keep track of trends within these sectors in order to add-value to our client relationships.
Fusion also has several clients in the Food Sector and, with this in mind, I recently came across some interesting research by Aptean on how IT is forecasted to impact the Food and Beverage industry, which I would like to share.
According to the Aptean Food and Beverage Outlook 2024, companies in this sector must prioritise leveraging technology to enhance efficiency, reduce costs, and stay competitive.
But what exactly does this mean?
Below, we summarise the key takeaways from an IT perspective, highlighting how advancements in technology are shaping the Food and Beverage industry.
Automation – The New Normal
Automation has become a cornerstone of operational efficiency in the Food and Beverage sector. The report reveals that 93% of surveyed companies are undergoing digital transformation to automate tasks and replace manual processes. This shift is not just about keeping up with technological trends, but about realising tangible benefits. Companies that have embraced automation report a 1.8 percentage point higher revenue growth compared to those that rely on manual operations.
From electronic data interchange (EDI) to product lifecycle management (PLM) software, automation tools are driving significant profitability. For instance, businesses utilising EDI software anticipate a 30% higher profit growth, while those implementing PLM software expect a 35% increase in profits. These figures underscore the critical role of automation in enhancing both efficiency and profitability.
The Power of Data Visibility
Data visibility is a pivotal factor driving digital transformation in the Food and Beverage industry. The report identifies a growing demand for business intelligence (BI) and artificial intelligence (AI) tools to enhance data visibility, accuracy, and rapid access. Currently, 35% of companies find it challenging to quickly obtain and analyse data on business performance and efficiency, which hampers their decision-making capabilities.
To address this, one-third of respondents plan to invest in BI tools by 2027. These investments are expected to streamline operational decision-making and help companies adapt to changing consumer preferences. Notably, companies already using industry-specific BI software experienced an average revenue growth of 11.8% in the last full trading year.
AI Adoption – Enhancing Decision-Making
Artificial intelligence is poised to revolutionise the Food and Beverage industry. A third of the organisations surveyed are already implementing or using AI, with one in five investing in AI specifically for improving data analytics and decision-making. The initial use cases for AI include automating repetitive tasks, customising products based on customer preferences, and increasing employee productivity.
The adoption of AI is driven by the need for actionable insights. Companies that are ahead in leveraging AI report higher revenue and profit growth compared to those still exploring or not planning to use AI. This trend indicates that AI is becoming integral to intelligent decision-making and operational efficiency.
Strategic Investments in ERP and Niche Technologies
Enterprise Resource Planning (ERP) software continues to be a top priority for Food and Beverage companies. The focus for 2024 includes end-to-end enhancements through ERP systems and cost-optimisation in specific areas like shipping and warehouse management. Additionally, investments in Equipment Asset Management (EAM) and Overall Equipment Effectiveness (OEE) software are seen as pivotal for moving from reactive to predictive maintenance models.
Such strategic investments not only enhance operational efficiency but also address workforce challenges. The pandemic-induced retirements have created a skills gap, prompting 54% of companies to upskill or reskill their workforce. Younger recruits, who value digital fluency, further bolster the business case for ongoing automation and analytics initiatives.
Addressing Workforce Challenges Through Digital Transformation
Digital transformation is also a key strategy to mitigate workforce challenges. The pandemic led to the retirement of many experienced professionals, creating a skills and knowledge gap. In response, companies are upskilling their existing workforce and investing in technologies that attract younger, digitally fluent employees.
By implementing automation and analytics, companies not only improve operational efficiency but also make their workplaces more attractive to new talent. This dual approach helps address immediate operational needs while building a foundation for future growth and innovation.
Summary
The Aptean Food and Beverage Outlook 2024 highlights the transformative impact of technology on the Food and Beverage industry. Automation, data visibility, AI adoption, strategic ERP investments, and addressing workforce challenges through digital transformation are key areas where IT is making a significant difference. As companies continue to navigate a challenging market, leveraging these technological advancements will be crucial for sustaining growth, enhancing efficiency, and maintaining a competitive edge. Embracing these trends not only ensures operational excellence but also positions companies to meet future challenges head-on.
Thanks
Richard
