Last updated: Digital transformation in the food industry: Trends, examples, and benefits

Digital transformation in the food industry: Trends, examples, and benefits

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From surging demand to fractured supply chains, COVID tested – then upended – the food industry like never before. All the upheaval put digital transformation in the food industry into hyperdrive.

Faced with challenges on all fronts, food companies stepped up their digital transformation efforts. They focused on optimizing their processes for maximum efficiency and building resiliency into their supply chains.

The goal wasn’t only to survive the pandemic challenge, but to come out stronger and ready for whatever challenge may come next.

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Top trends in food industry digital transformation for 2024

Digital transformation in the food industry takes a lot of forms, but there are some common trends:

    1. Cloud – Food companies accelerated their migration to the cloud in order to be more nimble and responsive to rapidly changing market conditions.
    2. AI – Artificial intelligence technologies and real-time analytics play key roles in helping food companies respond rapidly to trends in order to fuel growth and avoid food waste.
    3. Omnichannel – The ability to serve customers directly through online channels became more critical than ever for every industry during the pandemic, and food companies were no exception. Many saw an extreme shift away from restaurants and institutions to retail markets.
    4. Sustainability – A growing number of consumers want to know more about the food they buy, putting pressure on food companies to provide supply chain visibility using advanced technologies like IoT.
    5. Automation – The use of automation in the food industry has seen an upward trend – for example, restaurant chain operators are increasingly deploying automation in cooking and meal-prep. This increasing prevalence of autonomous food service in the name of labor cost and efficiency is shaping a future with less or no human-led culinary experiences.
    6. Personalized Customer Engagement – Better data, and robust data analysis tools are helping the food industry create more personalized digital experiences for their customers. Food service companies are poised to revolutionize their ordering experience across a plethora of digital touchpoints, in order to cater to individual preferences and behaviors delivering an omnichannel experience.

Digital transformation in food industry: International bakery digitizes sales

Even if you’ve never heard of ARYZTA, millions of consumers enjoy their products – many on a daily basis. Virtually every McDonald’s hamburger, cheeseburger, or chicken sandwich is served up on an ARYZTA bun. In fact, the company actually predates McDonald’s by nearly 50 years, having been founded in Ireland in 1897. Since then the company, now headquartered in Switzerland, has grown into a leadership role in the B2B bakery marketplace.

Although, as with all businesses, the pandemic created significant challenges to ARYZTA, it also intensified the need to continue pushing forward with digital transformation initiatives.

Migrating to a true cloud solution had already been part of the plan, but the disruption sown by the pandemic made it clear that the effort should be accelerated. “With all the requirements coming in, we were feeling quite uncomfortable with the level of responsiveness we could [currently] provide,” ARYZTA’s Digital Lead, Riccardo Zisa, says.

Image of a robot walking toward a bag of groceries , it looks both ways anticipating shopper needs, representing change in the food industry and e-grocery trends

Digitizing sales became imperative for ARYZTA. Implementing a cloud sales solution enabled it to more effectively serve customers and keep up more effectively with business requirements. Salespeople now have a holistic view of the customer that allows them be more efficient and focus on important leads and opportunities.

Another focus area for ARYZTA is it’s B2B e-commerce site, which initially serves five countries, but is expected to expand significantly in the next few years. A number of customers now rely on the site for placing large daily orders, which means it’s crucial that the solution seamlessly integrates with their retail customers’ solutions.

As Zisa explains, “We want to simplify and enhance their [e-commerce] journey on multiple devices.” You can watch the full interview below.

Key benefits of the cloud solution include:

  1. Future proofing: The ability to continue evolving the solution to meet business needs as they arise
  2. Upgrade friendly: Eliminates much of the overhead and anxiety typically associated with platform upgrades
  3. Easy deployments, thanks to the automated build process
  4. Self-service functionality tailored to fit ongoing commerce needs

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Global producer boosts visibility through digitization

Based in Germany, Döhler is a global producer, marketer and provider of technology-driven natural ingredients and integrated solutions for the food and beverage industry.

The company’s digital transformation goals were two-fold: drive efficiency and build competitive edge. With a customer-first focus, Döhler worked to streamline and centralize its logistics operations and provide the visibility its customers expect.

The efforts paid off. During COVID-related shutdowns, the company had visibility into affected suppliers and ports, which enabled them to quickly re-route shipments, helping them serve and retain their customers.

The benefits of its digital transformation include:

  1. Increased transparency across its operations
  2. Cost savings
  3. Improved productivity
  4. Higher customer satisfaction

Digital transformation in the food industry is now a required element, and the companies that are connecting processes to become more efficient and resilient will be the big winners.

Supply chain challenges can make for a wild ride. Get advice, best practices, + predictions from top experts HERE.

 

Frequently asked questions (FAQs):

The food industry is made up of a complex and interconnect web of entities and activities that revolve around the production, processing, and distribution of food. It includes growing crops, raising livestock, the manufacture of farm equipment and agrochemicals, food processing and the manufacture of food processing machinery, packaging and labeling products, storing and distributing them, marketing to consumers and selling them in stores. Additionally, the food industry deals with regulations, financing, catering services, R&D and educational efforts. The food industry plays a vital role in the global economy by providing food to people.

The role of the food industry goes beyond just putting food on our tables. At its core it involves producing, processing, and distributing food that is nutritious and safe for human consumption, while also ensuring that the food is produced sustainably and is commercially profitable. This requires continuous innovation in food technology and adapting to changing consumer preferences. The role of the food industry goes further than just making a profit; it plays a crucial part in promoting public health through responsible business practices and nutrition education. Moreover, the industry also plays a vital role in developing sustainable food systems, which address challenges like making food affordable and reducing environmental impacts.

Food industry technology, or Food Tech for short, pertains to the tools and methods used to make, process, package, and deliver the food that we consume. It’s about applying scientific knowledge and technology that makes food safe, nutritious, and sustainable to produce. The food industry technology is quite broad in scope encompassing:

  • Food production technologies, such as advanced techniques in farming and animal husbandry, such as genetically modified organisms (GMOs) and drones for crop monitoring.
  • Food processing technology, like transforming raw materials into edible products, using processes like canning and freezing.
  • Food packaging and distribution, for example innovative packaging that keeps food fresh longer, as well as efficient distribution of food products from the farm to table.
  • Food safety and quality control, for instance ensuring products meet health standards through testing and quality assurance.
  • Food sustainability, for example using technology to make food production more environmentally friendly and sustainable.
  • Emerging technologies, namely the use of artificial intelligence, 3D food printing, and the Internet of Things (IoT) in farming and food production.

Digital transformation in the food industry pertains to the integration of digital technologies in various aspects of the food production, processing, distribution, and consumption. The goal of digitalization in the food industry is to provide greater transparency in its supply chain, improve efficiency and thereby reduce costs, and ultimately enhance overall customer experience.

Examples of digital transformation in the food industry include:

  • E-commerce and delivery: The use of e-commerce platforms and mobile apps to order food, track delivery, and make payments.
  • Customer engagement: The use of social media, mobile apps, chatbots, and other digital channels to interact with customers and gather insights into their preferences and behaviors.
  • Food safety and quality control: The use of digital sensors, cameras, and other digital tools to monitor food safety and quality with the goals of reducing the risk of food-borne illnesses.
  • Supply chain transparency: The use of sensors, blockchain, and other technologies to track food products, manage inventory, and reduce waste, thereby improving the visibility and efficiency of the food supply chain, from farm to table.

The 4 primary areas of digital transformation in the food industry are:

  1. Supply Chain Management:  Generally, supply chain management deals with a range of activities, including procurement, production planning, inventory management, logistics, and customer service. Digitalization of the supply chain for the food industry deals with the optimization of the supply chain of food from farm to table; it includes the use of sensors, blockchain, and other technologies to track food products, manage inventory, and reduce waste.
  2. Food Safety and Quality Control: Food safety and quality control pertains to the implementation of food safety and quality control systems across the entire food supply chain. Any problems arising from food quality can lead to dissatisfied customers, and lost profits. Digital transformation with respect to food safety and quality control deals with the use of technology to inspect food products at scale and detect contamination quickly thereby reducing the risk of food-borne illnesses.
  3. E-commerce adoption and Delivery:  Online platforms, mobile apps, and digital payments have changed the way consumers order and receive food. A focus on convenience and speed led to the rapid adoption of platforms like Doordash and Uber Eats. Some online platforms are transforming delivery with the use of drones, robots, and self-driving delivery cars.
  4. Customer engagement and experience:  Customer engagement refers to how a business keeps its customers happy and engaged through each and every interaction. Adoption of contactless payments, loyalty programs, and personalization based on individual preferences are some of the ways businesses have been using digital transformation to acquire and retain customer and keep them delighted.

There are several benefits of digitalization in the food industry, including:

  • Enhanced supply chain visibility and efficiency: Digital technologies, such as sensors, blockchain, and RFID, are being used to track food products, manage inventory, and reduce waste, leading to a more efficient and sustainable supply chain.
  • Improved product development and innovation: Digital technologies, such as data analytics and machine learning, are being used to understand consumer preferences and optimize product development, leading to the introduction of new and innovative food products.
  • Greater transparency in the food supply chain: Blockchain technology is being used to create a secure and transparent food supply chain, allowing consumers to track the origin of their food and ensuring its safety.
  • Superior food safety and quality controls: Digital technologies, such as sensors and cameras, are being used to monitor food quality and safety, reducing the risk of food-borne illnesses and ensuring that consumers receive high-quality products.
  • Improved customer experience and engagement: Online platforms and mobile apps are making it easier for consumers to order food, track delivery, and make payments, leading to increased customer satisfaction and engagement.
  • Sustainable food production: Digital technologies are being used to optimize crop production, reduce waste, and minimize the environmental impact of food production, leading to a more sustainable food system.

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