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Revolutionising F&B: Triple benefits of automation – Productivity, profitability & compliance
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Tuesday, 11 July, 2023, 12 : 00 PM [IST]
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Akilan Vajravelu
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The food and beverage sector in India is one of the most rapidly growing industries in the country. According to a report by Statista, the Indian F&B market is expected to reach a value of $1.3 trillion by 2025, driven by several factors, including rising incomes, increasing urbanisation, and changing consumer preferences.
As the food & beverage sector grows, so does the need for automation in processes. Businesses in the F&B industry can benefit from automation to increase productivity, cut costs, and improve compliance. The demand for automation will increase along with the industry's expansion. Businesses that can adopt automation early will be well-positioned to succeed in the future.
In my experience of having worked with several F&B brands, one of the most compelling problems that the F&B industry faces is managing menu mix based on the cost of goods sold (COGS). Most brands now have their presence in multiple locations, and they follow a common recipe. The COGS form one of the major components (30% to 40%) of a dish’s P&L. The prices vary in different locations during different periods based on demand and supply. Every time a menu is planned, the COGS vary between locations, and it is very challenging for the business to forecast their profitability.
With low-code application platforms, it becomes easy to build a prediction tool to manage profitability. Once we have the latest price for ingredients, the business head can plug in the sales forecast and check profitability at different locations. The tool can help them to replace menu items with higher COGS with menu items with lower COGS, list the menu items with lower COGS in the first screen, and promote them. This is a lever for the growth heads to manage profitability better.
Another challenge that the F&B industry faces is food wastage. How much food to cook in different kitchens for any given meal? What are the various factors determining the quantity of food to be cooked? Is a good problem to solve provided we have huge data and have the power to compute, predict and monitor. Low-code application platforms are a tool that can help us to do it. On an average in cloud kitchen environment, the real wastage despite serving the right portion size will be around 3% to 4%. The main reasons for wastage are that more food is cooked (no prediction or less accurate prediction).
Here is what can be done through automation:
- Build a tool to measure, report and monitor actual cooked food, actual wastage and map it with the actual sales data.
- Identify all other factors, location-wise (Normal cause and special cause variations), dish type, the shelf life of the dish, lead time to cook a dish, and so on and factor it in the model as per business need and location-wise.
- Predict and pilot it and continue to correct the model and bring in better accuracy. This will help to reduce food wastage.
The F&B industry also faces the challenge of reducing electricity/gas/water consumption. This is a high investment problem to solve, but an overall cost-benefit analysis will help the organisation to reduce costs considerably and will also help in sustainability, reducing carbon footprint. Low-code application platforms integrated with IoT sensors can help in monitoring threshold levels, creating the right tickets, and alerting individuals at the right time to address the issue. This will also ensure that the kitchen uptime is not impacted at the same time organisation grows sustainably.
Business problems in the F&B industry are challenging, but understanding the process, and automating the process with the right checks and balances is critical to make the business profitable. I have seen the benefits of low-code application platforms in solving these problems, and I am confident that they can help other businesses in the F&B industry achieve their goals.
Leading low-code application platforms in the market provide a drag-and-drop interface that makes it easy to create custom applications without the need for coding expertise, with capabilities such as process automation, IoT, AI, cloud computing, and monitoring, that can help businesses in the F&B sector to design, build, and deploy automation solutions at scale and speed.
(The author is director-projects, Zvolv,
a low code-based automation platform)
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