The food manufacturing industry consists of around 21,000 companies and generates revenue of almost $760 billion. That’s in the United States alone. This shows how highly competitive the food & beverage manufacturing industry is, which is why efficiency is every company’s highest priority, as well as staying up-to-date with nutritional trends and consumer preferences.
Any food manufacturing company must understand the challenges and opportunities facing them every year. The food and beverage industry consists of several products such as:
- Coffee and Tea
- Soft Drinks
- Meat and Fish
- Baked Goods
Competing by Efficiency
In the food and beverage manufacturing industry, most of the revenue stems from the demand for products driven by consumption, growth in population, trending foods, and disposable income. However, a company cannot become profitable without efficiency.
While some of the largest companies in the United States are responsible for over half of the industry’s revenue, it’s the smaller food and beverage manufacturing businesses that are beating out their competition. The reason for this is because they are more focused on developing more popular products that are up-to-date, efficient, and better than their competitors.
Food & Beverage Industry Trends
As stated earlier, part of the food and beverage demand is dependent on consumer preferences which are shifting from processed foods to healthy and fresh alternatives.
The Shifting Trend Regarding Fats
As recent as ten years ago, consumers were beginning to ditch trans fats and transition to fat-free alternatives. More recently, however, consumers are now transitioning to foods that contain more natural ingredients and are high in saturated fats, such as grass-fed meats, organic dairy products, nuts and natural oils.
With this trend, manufacturing companies are shifting the way that their food is packaged and advertised. What does that mean for food manufacturing companies? Some companies may want to consider the possibility of creating full-fat dairy products including:
Spices: the Alternative to Dyes
While consumers are beginning to leave the trans fat foods and stick with healthier alternatives, they are also rejecting foods with artificial dyes. Companies are already looking into more natural alternatives to food coloring by using spices. For example, some products are now using turmeric as an alternative to Yellow #5 for foods like macaroni and cheese. Other companies are using paprika as food coloring for orange in sausages.
While food manufacturers are testing more natural ingredients and discovering new alternatives, they will also be experimenting with different suppliers to keep the price of production as low as possible while still providing quality products to consumers. This, of course, will also shift as the demand for consumer taste preferences continually change over the years due to new nutrition information and more health-conscious choices.
Challenges in the Food Manufacturing Industry
While competition alone is a challenge in this industry (keeping prices low while also giving a high quality to consumers), the following are a few other challenges that you may see in 2018:
- Finding skilled, long-term leaders who can motivate their teams and improve their work environment.
- Creating technology and automated processes that adapt to the ever-changing consumer trends and health preferences.
- Seasonal crops and harvesting schedules, as well as hiring parallel to those times.
- Closely monitoring and complying with state and federal regulations from OSHA, USDA, EPA, and FDA, on proper food safety and waste disposal.
- Egg shortages that cause price spikes in egg by-products, such as bread, pasta, cookies, and ice cream.
Opportunities in the Food Manufacturing Industry
With the shift in consumer preferences, from processed foods to healthier options, manufacturers can spice up their brand and tailor their products, or even introduce new products. Some of these opportunities include:
- Hiring Training Gems to work with your business and coach your staff will give your company the edge it needs to stay ahead of the competition.
- Exploring vegan and/or vegetarian product innovations.
- Developing healthier options, such as gluten-free products.
- Updating new packaging designs.
- Including more detailed and specific labeling.
- Expanding your products in Latin America and Asia.
Where Do Companies Stand in the Food and Beverage Industry?
There is a huge shift in new food preferences from consumers and the demand for more natural and healthy food options. The challenge for the manufacturing industry today includes new government regulations, efficiency, and the expansion of new products and new positions needed. Consumers are cutting out trans fats and highly processed foods, giving manufacturers the opportunity to create more wholesome products that meet these demands and to update their packaging with a more holistic look.
The food and beverage industry’s growth are dependent on consumption, population growth, disposable income and consumer’s tastes. Staying efficient and up-to-date with these trends is pivotal if manufacturers want to remain successful in such a highly competitive environment.
Where Does YOUR Company Stand in the Food & Beverage Industry?
Looking to train your team and improve your food manufacturing business? Get the insight, strategies, and tools you need to take the lead over the competition and drive your food manufacturing business to the next level. Contact us today to get started. Together we will face your challenges head on and train staff to face industry trends efficiently and effectively.