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Home » It’s Time to Adjust to Changing Customer Tastes, Shopping Habits

It’s Time to Adjust to Changing Customer Tastes, Shopping Habits

February 6, 2019
Dan Clark, SCB Contributor

The food and beverage industry is changing. Growers, manufacturers and retailers alike are suffering from thin margins, high fixed costs, changing consumer tastes, new methods of selling and growing competition from big-box stores. 

The food and beverage industry is being presented with many emerging technologies, adopting them early could mean the difference between those who stay competitive and those that go the way of Webvan. Technology can help improve delivery times, replenish shelves faster, and keep track of when orders are ready to be picked up so that precious time isn’t wasted. Keeping customers who are used to the ease of online shopping happy will continue to present a challenge for food and beverage companies. 

Right now, food and beverage companies are battling to keep costs down in an industry where transportation costs are expensive and customers are demanding a greater variety of options. 

Think of the last time you checked out the yogurt aisle in a grocery store. There were more options than just plain, vanilla and strawberry, weren’t there? Consumer tastes are changing and the expectation is that grocery stores and online retailers alike will be able to keep up with demand. The problem is that keeping multiple SKUs stocked and within date can be a logistical, not to mention expensive, nightmare.

Consumers shopping for food and beverage offerings don’t just rely on their local large-format grocery store. They have options, including convenience stores, big-box stores, online ordering for home delivery, and in-store pickup. This means that food and beverage companies need to be prepared to ship their products in a variety of ways with an agile supply chain. Some are opting to store their products in smaller format warehouses closer to city centers. Others are offering discounts for online subscriptions, which make planning and executing delivery easier. 

Consumers are becoming used to services like Chick-fil-A’s mobile app, which lets them place their order and walk in/drive up to get their food and pay without having to wait in line or talk to anyone. This level of expectation is changing the industry.

In the next few years, customers who are becoming used to delivery services like Peapod and drive-through grocery pickup like Walmart is now offering will become expectant of that level of convenience. They will want retailers to offer a variety of methods for them to buy groceries and expect all their purchases to be digitally cataloged for viewing on their smartphones. 

Manufacturers will need to make their products more trackable, going so far as to even equip individual items with electronic sensors. Trends like MyFitnessPal will likely become even more popular, meaning food and beverage companies will need keep their products’ nutritional value searchable on the web.

The Outlook

Beyond the next few years, technology like smart refrigerators and front doors, which can be unlocked by a delivery person to stock a pantry, may become the norm. Food and beverage companies may have more data about consumer consumption of their products. If a refrigerator automatically buys more soda when a family runs low, a report of those purchases could be sent directly to the manufacturer. 

High margins because of the capacity crunch and driver shortage may lessen as autonomous trucks become available to the public. But it will be up to each food and beverage company to stay ahead of the trends by leveraging technology. Tech can help companies keep their freight costs down, handle increasingly complex supply chains with more SKUs, and optimize final-mile delivery to customers. This in turn will address concerns of product expiration dates and keep companies competitive against larger-scale competitors.

Dan Clark is founder and president of Kuebix.

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