The global food and beverage industry is complex. Patrick Niels, EVP for food and beverage at DSM, talks about some of the biggest challenges currently facing the industry.
What are the biggest challenges facing the food and beverage industry today?
The food and beverage industry is one of the largest and most dynamic global industries – and it is not slowing down. Yet amid strong growth, producers worldwide are facing new and evolving challenges in an increasingly complex landscape.
Covid-19, for instance, had a major impact – kicking many health trends (particularly immunity) into hyperdrive as consumers became increasingly aware of maintaining overall wellness. And we are still feeling the effects today. In Europe alone, 33% of consumers now frequently seek out fortified food and drinks to support their nutritional needs. In North America, this number increases to 42%, while Asia sees a staggering 52% of individuals looking for products offering elevated nutritional value.
However, geopolitical issues, rampant cost inflation, labour shortages, supply chain disruptions, regional lockdowns and raw material shortages have compounded the difficulties faced by the industry. On top of this, manufacturers must deliver on their sustainability targets, maintain the highest quality and safety standards, and cater to rapidly evolving consumer preferences by getting trending products on shelves faster to successfully differentiate – all while providing nutritious and delicious foods and beverages. This is a lot to balance.
What steps can companies take to address these challenges?
The food and beverage industry is responsible for getting adequate nutrition to people all around the world. This doesn’t stop in a crisis. But it does become harder, and the impacts of a variety of global crises are already being felt. When wheat, vegetable and sunflower oils and animal feed supply are disrupted, this has a significant knock-on effect on animal-derived products, baked goods and other staple foods. Nowadays, every grain, every drop of milk and every bottle of vegetable oil counts.
Taking all of this into consideration, it’s understandable why there are rising concerns over future food scarcity and affordability. And there is a heightened worry that the poorest countries and communities will be disproportionately affected. In light of this, the food and beverage industry is collectively taking action. Priorities include diversifying product origins, securing secondary and tertiary suppliers, and optimising supply chains, production processes and other logistics so companies can continue to deliver the nutritious and delicious food expected by consumers.
Small changes can help make a large impact, and even when the overall impact of a change may be considered small, it is still shifting the dial by a percent or two in the right direction. Every change matters – contributing towards positive progress.
Looking beyond the current market challenges, what matters most to consumers? Is it taste, health, sustainability or something else?
Enjoying a truly satisfying eating experience will remain the unshakable top priority for consumers. But it’s not just sensory appeal that matters; health, sustainability, ethical production, free-from, clean label, waste reduction and traceability are also competing factors for today’s consumers.
For example, when it comes to looking for health benefits from their food, recent research from the IFIC shows that nearly 40% of consumers look for support with weight management – usually in the form of reduced sugar and fat claims – over 35% look for digestive health benefits, and over one-in-five seek immunity-boosting products. In Europe alone, nearly 1,000 food and beverage products with an immunity claim launched last year, with juice and drinking yogurt the top two categories for such claims.
Food producers, therefore, have a role to play in helping consumers navigate on-pack claims to find the products that best match their values. It is also worth noting that, despite the urgent challenges we face as an industry, by working together, we can proactively adopt new initiatives to help tackle issues head-on. Together, we can fulfil our shared purpose of supporting people worldwide with the nutrient-packed, delicious and sustainable food and beverages they need, expect and deserve.
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