The foodservice sector saw a number of changes in 2020.
Food distributors adapted to greater consumer demands for convenience and were driven to explore new routes to market, diversify their services, and to widen their digital footprint to stand out in an increasingly competitive environment.
The digitisation of food distribution has enabled food sellers to adapt considerably well to the business environment of 2020. But, how can we expect digital solutions such as ERP and Business intelligence to drive change in 2021, when faced with new challenges - from managing new Brexit rules to the ferocity of competition in the online space?
New Developments Continue Support the Industry
Foodservice organisations are increasingly recognising the importance of ERP systems that are not only integrating their core business functions, but also maximising efficiency across their processes:
- Warehouse management becomes significantly easier, thanks to detailed inventory management, provision barcode scanning, automated scheduling and comprehensive supply chain planning.
- Routes-to-market are reduced thanks to improved shipping accuracy, increased productivity, and seamless integration with third-party logistics.
- Profit margins are maintained thanks to Procurement made easier by automation of end-to-end processes that extend to the entire business ecosystem, including partners, suppliers, and customers.
- The workforce is empowered by real-time dashboarding and reporting, arming them with the insight, and automation of manual processes gives them means to work on value-added tasks.
- Customer satisfaction is driven by Sales, Marketing, and Service automation to provide a seamless experience to customers.
- Food wholesalers are innovating, driving more productive work, improving logistics, by removing redundant processes from their routes-to-market.
Technical solutions like Insight for Wholesale Distribution are armed to the teeth to mitigate risks to the supply chain, and optimise routes to market. Insight combines the Enterprise Resource Planning capability of SAP Business ByDesign, with Business Intelligence of SAP Analytics Cloud that manages risk, forecasts supply chain uncertainty, supports intelligent inventory, and avoids delays to market.
Managing New Brexit Rules
For countless food wholesale organisations, Brexit will set the roadmap for their operations - as new rules impact the supply chains. In the food and drinks market there is especially great concern surrounding rules of origin. If a product, for instance, moves between the UK and the EU, but is not deemed to be sufficiently British, it is ineligible for preferential tariff rates, meaning duties must be paid.
It raises the question of how supply chains can be adapted in order to ensure both frictionless and tariff free trade. Logistical adjustments from:
- Transforming product to satisfy commodity code changes,
- Integration of several products into one,
- The use of bonded warehouses - a very expensive and restrictive option,
- Abandoning the UK altogether as a distribution hub in favour of Europe.
- Increasing local purchasing.
For many growing food sellers, these options are not commercially viable. Many are finding themselves especially vulnerable to new tariffs and obstacles to market, compared with larger more established food wholesalers that can afford major overhauls of logistical changes. Without an effective digital solution, smaller and mid-market food sellers could find it harder to manage Brexit risks to supply and make necessary adjustments.
To read more about how Insight is helping customers manage Brexit, click here (link).
Supporting Customer Satisfaction
In 2020, disruption accelerated behavioural shifts towards convenience and online growth. Six million households shopped for food online and the online grocery market rose to 12.5% in December, up 5.8% the previous year. As such, increasing digital footprint and meeting online demands for convenience will be a continued priority for most food sellers.
This has led organisations to increasingly embrace direct-to-consumer approach to improve customer satisfaction. As well as this, continuing shifts in consumer engagement and the exponential growth of technology usage: mobile apps, social media, cloud technology, have driven customer expectations to all time high, which wholesalers continue to adapt to.
This user-centric focus has also been reflected by a new ferocity of online competition, as food sellers fight to be seen. Omnichannel marketing has become the norm - smart digital interactive signage, personalisation of offers and content, and wider more sophisticated digital marketing initiatives mean food sellers are consistently engaging digitally.
With the ever changing tastes of consumers, it can be difficult for food sellers to keep on top of customer trends.
Technical solutions however, make anticipating and reacting to new customer developments significantly easier. Insight, for example, not only integrates seamlessly with ecommerce platforms, but it also gives a detailed outlook of customer information for the entire customer lifecycle. It centralises marketing, sales, and service to provide visibility to the organisation, empowering decision-making, and driving improved customer satisfaction.
Unlocking Sustainability Aims
Environmental impact has increasingly informed consumer purchases in recent years, and organisations continue to adapt to customer expectations.
For instance, many industry experts have predicted that we could see ‘eco-aisling’, and that it won’t be irregular to see ‘eco-scores’ being marketed on product packaging, menus, websites, and more (not dissimilar to the shift in transparency in nutritional information). This has been reflected by regulators from the Advertising Standards Authority to the Competition & Markets Authority who are ramping up their investigations into unsubstantiated environmentally friendly claims and ‘greenwashing’.
Accordingly, many food service organisations have responded to the trend by making many commitments. For instance Courtauld 2025 is a commitment by some of the leading brands to reduce food waste, cut carbon, and protect critical water resources.
Food distributors that hope to capitalise on the fever for green are expected to ramp up their environmental efforts, adapt their supply chains to meet regulatory standards and to be able to prove certain claims. In order to be able to substantiate such claims, organisations require a single, accurate view of the entire organisation, all its subdivisions and third parties. They need to integrate all their processes. They need to be able to standardise information across all levels of the supply chain, and to support complete transparency.
Further Regulatory Compliance
In addition to sustainability and Brexit regulations, organisations also need to comply with health and safety rules and more. Wholesale professionals expect food safety risk from imports in 2021. Because of the unavailability of vaccinations for COVID-19 in many parts of the world, many expect food safety and food fraud could emerge due to reduced audits and inspections, or even diversions of produce from one market to another, creating more opportunities to cut corners.
Modern digital solutions like Insight give you a complete and highly accessible overview of all data, customers, partners, and suppliers, globally and in real-time ensuring accuracy. Reporting covers all areas of the company and ensures intelligent and fast decision-making to support compliance - no matter the rule.
Final Thoughts & Insight for Wholesale Distribution
The foodservice sector will see decisive change as more and more wholesalers are forced to adopt technology to adapt to the new business environment. The question for growing organisations that have yet to truly innovate remains: What technical solution should a growing food distributor choose for greater integration, transparency, and scalability?
The best technological solution is time and cost-effective, with short implementation times. Clarivos’s Insight for Wholesale Distribution is an out-of-the-box solution that offers not only all the benefits of enterprise resource planning, but also business intelligence capabilities. And, it’s ready for food sellers to get value from and to navigate the complex and competitive road ahead in 2021.