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April 4, 2023

Why F&B must leverage digital to unlock innovation

The F&B industry is increasingly looking towards modern industry cloud platforms as a means of driving innovation and collaboration across the enterprise.

Between strained supply chains and the inefficiencies of analogue platforms, many food and beverage manufacturers are embracing modern industry-specific enterprise software in the cloud – alongside other smart technologies. Industry leaders obviously see the value in moving to the cloud, with recent work finding that 73% are maintaining or boosting their digital investments.

F&B industry
Innovation is a rising requirement in F&B. (Photo by Andre Silva Pinto/Shutterstock)

Their motivations are increasingly proactive, as well as reactive. Innovation is a rising sector requirement. With a 2022 study by Marcum claiming it’s the top priority of over seven-in-ten industry executives, there’s huge pressure on firms to get exciting new products to market and respond faster to changing consumer preferences and supply disruptions.

It’s increasingly clear, moreover, that a traditional approach with separate applications for ERP, PLM and SCP, and the various disciplines working within their own silos, is suboptimal and hinders collaboration. The result is a less responsive organisation and a longer time to market than needed in an industry that is faced with an increased speed of change.

Agility, resilience, visibility

Marcel Koks is in an excellent position to reflect on the growing influence of R&D across food and drink. With a consulting career stretching back decades, he now works as the industry and solution strategy director of food and beverage at Infor, a global leader in business cloud software. 

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And as Koks emphasises, modern F&B is an industry that puts innovation at its heart. Where once a brand could organise R&D plans five years in advance, the speed at which new products appear makes that timeline untenable. As Koks says, this requires firms to “have the agility and resilience and visibility” to move into new areas at speed – and the data to make research decisions with confidence. 

There are several reasons for this transformation. One is shifting consumer expectations. The rise of plant-based products is one such example, with Statista estimating that they’ll soon represent a global market worth $17.4bn. Manufacturers must react in kind. That’s echoed by the kind of information customers now demand – a 2021 study by YouGov found that British consumer trust in their food’s traceability lags significantly behind faith in its safety. 

A related factor involves the so-called ‘first to market’ phenomenon. Getting a new product to clients faster than the competition can encourages everything from brand recognition to customer loyalty. But for that to happen, firms must have intimate knowledge of manufacturing bottlenecks, as well as capacity and scheduling constraints. 

Combined with complex regulatory challenges, it’s no wonder companies should be fighting to improve their R&D stance.

Yet if the causes of this revolution are multi-layered, Koks is in no doubt about the consequences of inaction. “‘We can do it – but it’ll take two years,’” is how he characterises the typical response of an IT team reliant on legacy software, adding that from software migration to digital maintenance, there are fewer opportunities for proactive R&D.

F&B industry: from farm to fork

With all this in mind, it’s not surprising that so many F&B companies are moving to industry cloud platforms in which ERP, PLM and SCP capabilities are available as a service, allowing them to quickly and effectively get new foods and drinks from factory floors to supermarket shelves. 

Perhaps the most crucial aspect here revolves around consumer demand. Like Infor’s cloud-based ERP, the premier industry platforms make it straightforward for brands to track the provenance of ingredients; for instance, facilitating QR codes that link to information on where a certain fish was caught.

And if that fulfils one customer expectation – in Koks’ words, avoiding separate data silos can ensure products are tracked from “farm to fork” – cloud platforms can also give clients what they want in the broader sense of promoting R&D. 

Fundamentally, this is because an industry cloud platform unites disparate parts of a firm’s operations. If, for instance, an R&D team uses the cloud platform to liaise closely with the planning and operations teams, understanding availability and quickly changing costs of ingredients, they can develop new formulas that meet consumers’ needs at the lowest possible cost, and also respond faster with formula changes to supply disruptions.

This helps to maintain sales volumes and protect margins, which is critical, especially with F&B industry supply chains in flux – the United Nations reports that food prices remain high even compared with 2020.

It’s a similar story once new products have been shipped, with ERPs allowing R&D teams to promptly integrate the feedback of sales and customers alike. 

Nor do the R&D advantages of sophisticated cloud platforms like Infor’s end there. When it comes to regulatory compliance, for example, food safety checks can be automated, as well as ensure the right boxes are ticked throughout a product’s development cycle. That’s important when manufacturers tweak formulas during the R&D process – particularly when firms that ship products into the US are obliged to meet specific record-retention rules.

If these improvements doubtless bolster a firm in their own right – the Infor PLM for Process solution can, for example, automatically generate regulation-compliant product labels and ingredient lists for new products – Koks implies that they equally leave staff free to focus on what matters: inventing dynamic new F&B offerings for customers.

Given just how rapidly the sector is evolving, that’s surely worth remembering. 

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