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Importance of Data Analytics in the Food and Beverage Industry

F&B industry
Reading Time: 4 minutes

Summary: The food and beverage industry is going through challenging times for various reasons, such as razor-thin profit margins, pandemic-induced supply chain management issues, and changing customer eating and drinking habits. Therefore, food & beverage manufacturers are shrinking the size of their products without changing their prices. So, what does the future hold? What role does technology play in eliminating this challenge? Let’s find out.

food and beverage industry

In 2013, Mars decided that all their chocolate bars would be 250 calories or less. This decision shed light on the challenges the F&B industry is going through, namely:

  • Increase in raw material cost
  • Compliance with international regulations
  • Packaging and transport of finished products

Consumer expert Edgar Dworsky shares his opinions on how downsizing has impacted the F&B industry for a long time. First, he explains how vending machines doomed the career of many employees. Later, when the price of chocolate and ingredients went up, vending operators were shocked as they didn’t understand how to respond to the situation. The problem was that vending machines only accepted nickels. In response, F&B companies reduced the size of the candy so that they could sell them for only a nickel. He further adds that the candy size is inversely proportional to gas prices, and if they increase in the future, candy prices will also go up. 

The F&B industry is going through a challenging phase. With shrinking profits, increasing raw material costs, and people spending a small portion of their income on F&B products, companies need to re-evaluate their business plans and use advanced data analytics to make informed decisions.

food and beverage industry

Managing changing customer tastes

Today, we live in a world dominated by social media platforms where negative word of mouth travels faster than positive ideas and thoughts. Consumers, especially the millennial audience, are proactive on social media and don’t shy away from sharing their feedback. 

F&B companies must understand that consumers’ tastes and preferences are rapidly changing worldwide. People are moving towards consuming food articles that are healthier and more environment-friendly. They ask questions about the raw ingredients, the manufacturing & distribution processes involved, environmental impact, and how the company treats its employees.

A practical solution to this problem would be to build robust and long-lasting customer relationships to learn about their desires and new market trends. This way, they can brainstorm creative strategies to reach their audiences. Moreover, F&B companies need to speed up the product development lifecycle by moving products quickly from the R&D phase to the shelf. 

food and beverage industry

Comprehending transforming dietary needs

The Food & Health Survey Report 2018 reveals that 7 out of 10 consumers are ready to give up a familiar favorite food for another that doesn’t contain any artificial ingredients. Moreover, 6 out of 10 consumers would want the food they buy/consume to be manufactured sustainably. 

Companies need to take care of their customers’ food habits. For example, some stick to a strict vegan diet, others have a nut allergy, and some prefer a healthier diet. Different people have varying tastes and preferences, and companies need to respect that.

F&B companies are investing in industry 4.0 solutions like Artificial Intelligence and advanced data mining capabilities to offer highly personalized services, better position their brand, and identify changing customers’ consumption habits by tracking them across multiple channels. 

food and beverage industry

How can data analytics play a significant role for F&B manufacturers?

As stated above, organizations are now implementing Industry 4.0 solutions to gain valuable insights from the enormous amount of data generated daily. These insights offer a competitive advantage by driving improvement and removing operational inefficiency. 

ERP systems allow employees across all departments to connect strategic goals and tactical operations, enabling them to work in unison. 

Aberdeen says that leading companies provide tools to convert data into actionable evidence. 

food and beverage industry

Analytics allows executives to get real-time information that helps make better decisions in less time. Moreover, valuable insights enable F&B manufacturers to make future business strategies and efficiently manage production, purchasing, and maintenance. 

1. Ensuring compliance and high-quality

The importance of data analytics in food & beverage industry is not only limited to tracking customer preferences and handling competitive pressures but also complying with current & future regulations and avoiding product recalls. 

The following survey by the Aberdeen group shows the top pressure points in the F&B industry.

food and beverage industry

2. Importance of data analytics in Food & Beverage Industry

F&B manufacturers should evaluate their current business management solution and ask the following questions:

  • Is it in line with the changing regulatory requirements?
  • Is it helping them to understand the changing customer dietary habits?
  • Is it allowing them to track the product across its lifecycle?

The following questions will help food and beverage manufacturers consider whether they need to upgrade their ERP systems and expand their current functionalities. 

The following infographic gives a good idea of why implementing the latest ERP software is crucial for F&B manufacturers. 

food and beverage industry


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Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

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