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Food & beverage companies will need to re-evaluate their strategy post-pandemic
Wednesday, 13 January, 2021, 14 : 00 PM [IST]
Raghav Gupta
During the Covid-19 pandemic, food manufacturers, processors and distributors witnessed a spike in demand as consumers scrambled to keep their kitchens and refrigerators fully stocked to comply with the stay-at-home orders. Still, the situation across the entire sector continues to look bleak and uneven and the industry is expected to face challenges in its recovery and revival.

Many food and beverages companies will have to rethink their strategy and readjust their focus to meet the evolving demands in the post-pandemic world.   

The food and beverage sector constitutes essential businesses but those companies that serve hospitality and restaurants segments saw a tremendous decline in demand. Many meat and plant processing plants had to be shut due to the coronavirus outbreak and subsequent health restrictions. The supply chain challenges constitute a major concern amongst food and beverage processors as there was a significant disruption caused by a serious lag in supply chain in the beginning period of the pandemic.

Though that situation is stabilising gradually, food and beverage companies will have to think of ways to adapt to the new normal moving ahead. In other words, they need an effective comeback strategy.

Key Trends Expected Post-Covid
The pandemic has significantly changed consumption patterns and reoriented them. In the post-coronavirus world, the consumers will be mindful of their health and safety along with developing environmentally sustainable habits. With this perspective, following are some of the trends likely to emerge:

Responsible Consumption – With pressing environmental issues, there are growing concerns of their impact on one’s health.

Products and services with both health and sustainability benefits are driving great appeal as people become responsible consumers. This presents an opportunity for the food and beverage brands to make a personal, powerful, and purposeful connection with their customers by addressing and communicating both simultaneously.  

Convenience Paramount - As the world undergoes a demographic change, smaller households and living alone (in some cases) are becoming common now. Gone are those days when convenience food meant unhealthy fast food.

Now, consumers want convenience coupled with eco-friendly existence. Innovative ways like eco-friendly packaging, paper-based cartons, and plant-based food will likely arise which the food and beverage companies will have to embrace.

Heritage Gains Prominence – The desire to be authentic and maintain individuality will lead to products picking up traditional flavours and foods. The concept of combining foreign ingredients with local ones is also expected to pick up steam. Thus, this trend is likely to pave way for local brands, especially in developing markets.

Personalisation - Consumers know and understand the value that their personal data holds and expect companies to be more transparent in using this data. They also expect to receive something of value in exchange for sharing it. Hence, this places a responsibility on brands to give customers the information required to make informed choices.

Strategies for Survival
Given the challenges and major trends likely to gain ground in future, food and beverage businesses need to be more proactive in their approach. They need to take practical steps to weather the storm, meet changing consumer demands and achieve future growth.

Here are some ways in which food and beverage sector can navigate these unprecedented times:

1.    Shift to Direct-to-Consumer
As restaurants and hotels closed down, food processing and distributing firms had to pivot their operations to survive. Since many companies could not sell goods via their regular wholesale and retail partners, direct-to-consumer models became more mainstream. Companies are revamping their own websites to enable direct ordering or through home delivery. More food and beverage companies are also reaching out to consumers during the pandemic with targeted and tailored Covid-19 messages. Even with the restaurants and hotels reopening, social distancing rules and reluctance among prospective customers to mingle in crowds will continue to exist. Hence, food companies will have to adopt a more consumer-centric approach going forward to make it economically viable.

2.    Supply Chain Diversification
Even when the pandemic abates, factories across the globe will have to tackle serious labour force issues, as workers decide not to return or owners need to incentivise them to come back, which in turn lead to spiralling of costs. Hence, as the pandemic continues to be unpredictable with passing time, food and beverage companies will have to keep diversifying their supply chains in order to prevent shortages.  Companies need to mitigate the risk inherent in supply chain disruption by focusing on vertical integration - sourcing more raw materials and components locally and taking the ownership of supply.

3.    Maintaining Consistent Flow of Shipments
As people continue to keep their movements limited for safety reasons, consumer demand for food and related goods will remain high. Food and beverage companies will have to ensure the flow of goods and services by having enough drivers and truckers on-board for seamless movement and shipping. Pandemic or not, people will need to eat and drink and so, maintaining sufficient supply to meet the incessant demands has become extremely crucial. Thereby, food companies now will have to reshape and remodel their businesses – by working with various players or by becoming more tech-savvy than bricks and mortar.

4.    Setting Up Customer Portal for Distribution Network
In addition to taking care of their consumers, food and beverage companies also need to think of ways to improve relationships with their B2B buyers, retail partners and distribution networks. This can be done by offering them a similar flexibility in online buying options and experiences, which the B2C customers enjoy. Establishing a B2B digital customer portal can simplify the highly complex B2B buying processes, thus adopting a customer-centric approach across marketing, commerce and service.  This way food businesses can expand their market reach and ensure that orders and deliveries are processed smoothly.  

5.    Streamline E-commerce
It’s essential that food and beverage businesses set up an online selling presence and streamline their e-commerce. Retailers and grocery stores are required to have the right tools handy which will enable them to create engaging digital and mobile experiences. Consumers will be able to make their purchases via digital channels and have essential food and grocery items delivered to their doorstep. Food businesses also need to offer flexible order and its fulfilment options, such as touchless ordering, online payments, and curb-side pickup.  

6.    Adopt Tech Solutions
Technological solutions will have to be leveraged to connect the food and beverage industry with consumer data and preferences so that health can be monitored effectively, brands can influence diets and other relevant services can be provided for improving the entire ecosystem. Tech is expected to be a huge disruptor of the industry, empowering brands to reach out to their consumers in new ways enabling more sustainable, advanced and cooperative systems. Moreover, consumers want to learn more about the products they are consuming. This is where automated solutions and tools such as dynamic QR codes and smart packaging come in, providing full traceability of the product. Digitisation can, thus, result in better business outcomes, which can be in terms of quality, cost, sales or any other aspect of the business.

Although the food and beverage sector has been adversely hit by Covid-19 pandemic, disruption always comes in the garb of an opportunity to adapt and respond to new growth possibilities. By understanding and quickly adapting to the changing business dynamics, the food and beverage companies will be able to come out thriving on the other side of the crisis.

(The author is director of Kanchan Metals. He can be reached at
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