How the F&B sector can leverage data-driven tools to become smarter, faster and greener
Sponsored by dss+In the third article in our series on practical solutions to challenges faced by the food and beverage (F&B) industry, we explore the strategic impact of digital technology
As disruptions become the norm rather than the exception, digital technologies offer food and beverage (F&B) companies the agility to mitigate risks, streamline operations and unlock new growth opportunities. Companies investing in AI, automation and predictive analytics are reducing costs, improving product quality and strengthening customer loyalty.
Achieving the capacity to leverage data-driven technologies also ensures better supply chain visibility and compliance with environmental, social and governance (ESG) standards. The digital transformation market grew from approximately $92 billion in 2014 to $469.8 billion in 2020 and is expected to reach $1,009.8 billion by 2025.
However, achieving agility and driving growth is not just about having the right digital technologies in place. It’s also about knowing how to harness data in a way that allows F&B companies to gain a competitive advantage and become more profitable in an increasingly volatile market.
Mobilise data to become more efficient
Applying new technology to harness data is already helping to push the boundaries of efficiency in the F&B sector. For example, using AI to analyse sales data and weather patterns has allowed Walmart to predict product demand and optimise stock levels. This has reduced stockouts by 30 per cent and decreased excess inventory by 20 per cent, cutting storage costs and improving customer satisfaction. The company is now developing analytics to reduce food waste across its global stores.
Similarly, the UK’s largest pure-play online grocer, Ocado, has developed the Ocado Smart Platform (OSP), which harnesses AI, robotics and automation to facilitate more effective and efficient food distribution that closely aligns with consumer interest and behaviour.
Increasingly, sustainable food platforms such as Too Good to Go are helping industry players manage excess inventory of near-expiry products and incentivise consumers to purchase at a significantly reduced price to avoid waste. New AI platforms are also streamlining and managing order processing to improve efficiency without increasing the workforce.
These examples illustrate how data-driven tools and AI solutions can not only address operational inefficiencies but also mitigate risks, reduce costs and unlock new opportunities in the F&B sector.
Streamline tasks with automation and predictive analytics
Automation helps streamline repetitive tasks such as order processing, quality control, packaging and labelling. Further efficiencies can be obtained by using automation for inventory management, production scheduling, food safety monitoring, logistics and shipping. Documentation can also be streamlined to facilitate food regulatory compliance, process and supply chain documentation, reducing errors and decreasing costs.
Blockchain is being employed to help improve traceability and transparency across the supply chain by helping to detect anomalies caused by the growing problem of global food fraud. In addition, machine learning can underpin smart shelf system technology. Using an artificial neural network model, it can also assess food quality by precisely estimating the temperature of food products stored in multi-temperature refrigerated transport vehicles, helping to manage and protect inventory.
Machine learning also goes beyond specific applications, as it can support a wide range of predictive capabilities, including optimising supply chain processes, improving demand forecasting and enhancing quality control.
Leverage data to empower sustainability and mitigate risk
Digital tools are also set to help F&B companies mitigate the operational risks linked to meeting sustainability goals. For example, data analytics tools that track carbon footprints by measuring emissions and resource usage can help comply with ESG regulations. Equally, blockchain can assist in verifying ethical and sustainable practices across the supply chain. Research indicates that the global internet of things (IoT) in the food market is expected to reach $10.74 billion by 2028, representing an annual growth rate of 9.50 per cent between 2021 and 2028.
Importantly, advanced technologies allow businesses to become more proactive. AI-powered predictive modeling and scenario planning help companies anticipate supply chain disruptions, optimise resource allocation, and reduce environmental impact while ensuring business continuity. Equally, neuroscientific consumer analytics are helping F&B companies become more proactive and align their offerings with evolving market expectations.
Leveraging data also ensures accurate reporting and alignment with global sustainability standards such as the EU’s Corporate Sustainability Reporting Directive (CSRD), which requires companies to report on their environmental and social impacts. As regulatory agencies embark on their digital transformation, the focus on data accuracy is set to increase.
Address barriers to success
When implementing a digital transformation programme, assessing legacy systems for compatibility and prioritising phased upgrades helps to ensure smoother transitions. At the same time, engaging employees at all levels in the transformation journey and proactively addressing concerns about job displacement can help mitigate resistance and address barriers to success.
Training, upskilling and engaging employees foster a culture that embraces innovation and adaptability, which is essential. Doubling down on technology to help employees train and adapt to digital transformation plans can help fast-track required skills. Leveraging technology to support AI-driven learning platforms or gamified up-skilling programmes can further accelerate skill acquisition. Collaboration is essential. Partnering with technology providers ensures customised solutions integrate with existing systems seamlessly and as effectively as possible.
By reinforcing the link between digital transformation, strategy, mindset and culture, F&B companies avoid the one-time investment approach focusing on technology alone and apply the consistency needed to reap the long-term benefits of agility, resilience and a vital competitive advantage. For example, Starbucks recorded revenues of $29.06 billion in 2021, an increase of 24 per cent compared with 2020. This demonstrates how leveraging digital tools can drive efficiency, improve customer engagement and create long-term business resilience. For F&B companies, digital transformation is no longer an option – it’s a necessity for staying competitive, sustainable and future-ready.
For more information, visit consultdss.com
Marcos Salla, Global Director, Food and Beverage and Consumer Goods, dss+
Business Reporter Team
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