Overview of the Food and Beverage Industry
The food and beverage industry plays a unique role in expanding economic opportunities because it is universal to human life and health. Driven by the increasing disposable income, the food and beverage industry has been witnessing noticeable changes in the consumption pattern. The emergence of developing nations coupled with their population growth and increasing government regulations is impacting food and beverage manufacturing companies and their business strategies. Moreover, the higher economic growth of countries such as India, Brazil, and China give people the ability to choose a wide variety of food and beverages; thereby, creating a new market for many products.
Let’s look at some of the fundamental factors that will influence the growth prospects of the food and beverage industry in the coming years.
- Adhering to changing consumer demands: In today’s competitive marketplace, rising consumer demand for products that are grown sustainably, ethically sourced, minimally processed, and made with natural ingredients is creating uncertainty within the global food and beverage supply chain. As a result, food and beverage companies and their trading partners must create a new supply chain framework that allows them to cater to the needs of consumers without sacrificing on price, convenience, efficiency, product quality, and availability.
- Differentiation in an oversaturated marketplace: Improved economies across the globe have led to the advent of several new food and beverage producers. Therefore, consumers have a lot of options to choose from when it comes to selecting a food or beverage of their choice. As a result, it is crucial for food and beverage industry players to differentiate themselves from others by offering unique product and service offerings and stay ahead of the competition.
These factors are forcing companies operating in the food and beverage space to leverage the use of supply market intelligence studies to stay ahead of the competition. The supply market intelligence studies help clients gain a deeper understanding of the latest developments and trends, key risks, and recommendations on devising procurement best practices across the food and beverage industry. These solutions also help firms reduce their procurement spends and offer superior product and service offerings to their clients.
The Business Challenge and Journey
The client, a renowned player in the food and beverage space with multiple business units spread across the globe, was difficulty managing their sourcing and procurement processes, which resulted in higher expenses across the supply chain. Therefore, they wanted to gain a comprehensive understanding of the suppliers, competitors, their products, services, and spending pattern to cut down on their direct and indirect spends. They also wanted to gain actionable insights on ways to enter into a superior contract negotiation with their current suppliers. As a result, the client approached SpendEdge’s supply market intelligence experts to overcome their predicaments.
To support the food and beverage client overcome their predicaments, SpendEdge tailored a comprehensive research methodology. The research approach comprised of primary and secondary research coupled with qualitative and quantitative data collection procedures.
During the course of this engagement, the food and beverage industry client was able to identify the supplier’s pricing and cost structure and devise a price model analysis to evaluate competitors’ strategies. Additionally, a comprehensive SWOT analysis aided the client in establishing a list of suppliers in terms of their business profile, revenue, and financial structure. The engagement also helped the client prioritize action plans, implement best practices, and devise new sourcing strategies across business units to cut down direct and indirect costs while establishing a lean and centralized sourcing and procurement process.
Key questions answered in this supply market intelligence engagement include
The supply market intelligence engagement helped the food and beverage industry client identify the potential supply risks and enhance their procurement and sourcing operations and capability. This helped them achieve an annual savings of $15 million.