Leveraging Cost Model Analysis for a Leading Player in the Food and Beverage Industry, Specializing in Manufacturing Processed Foods
Processed foods include food items that have been altered in some way during preparation. Not all processed foods are unhealthy, but some processed foods may contain high levels of salt, sugar, and fat. Food processing may be classified into the following categories: Freezing Canning Baking Drying The global processed foods sector is a major segment […]READ MORE >>
Processed foods include food items that have been altered in some way during preparation. Not all processed foods are unhealthy, but some processed foods may contain high levels of salt, sugar, and fat. Food processing may be classified into the following categories:
The global processed foods sector is a major segment of the food and beverage industry. Processed foods manufacturing companies generate revenue from the sale of food and ingredients to a whole host of customers, ranging from supermarket chains to restaurants and other players further down the processing chain. Processed foods have, on average, delivered high single-digit annual total returns with much less volatility than the broader market indexes.
The Business Challenge and Journey
The client, a leading player in the food and beverage industry, specializing in the manufacture of processed foods, was looking at leveraging SpendEdge’s cost analysis solutions. They wanted to identify the strengths and weaknesses in their transactional activities for functional business requirements or projects investments. The client was facing several issues related to their inefficient supply chain strategies. The company’s supply chain management executives recognized the tremendous benefits of implementing a cost analysis study. As such, they were looking at reducing the company’s risk profile by improving the efficiency of their overall supply chain operations.
To identify challenges in the supply chain functions, the cost analysis experts at SpendEdge carried out extensive research, comprising interviews and discussions with prominent stakeholders in the food and beverage industry. The experts also compiled information across a wide array of reliable sources such as trade shows, company presentations, industry forums.
Fundamental questions answered in this cost analysis study include:
Why should you leverage cost model analysis?
Cost analysis is an essential way to identify and estimate the critical cost elements across a supply chain. Leveraging cost analysis enables organizations to determine the best negotiation levers, while simultaneously achieving the lowest cost mix.
SpendEdge’s cost analysis solution offered relevant insights that helped the processed foods manufacturing company to develop relevant strategies to enhance their business operations.
Our solution also enabled the client to identify, adapt, and implement the best practices that produced the best performance results in the processed foods sector. Moreover, the cost analysis solution enabled the client to achieve breakthrough improvements in their overall supply chain performance. Furthermore, it offered relevant insights to better understand the market scenario, supplier negotiation strategies, industry standards, and expectations.
Processed foods market trends:
- The shift in global demand- Emerging markets such as Indonesia, India, Malaysia, and China are expected to drive the growth of the processed foods segment. This can be attributed to the increase in export and import of processed foods. Also, manufacturing and processing of foods will gradually shift to these markets, to be close to a growing customer base.
- Increase in urbanization- It is estimated that by 2050, about two-thirds of the global population will be living in cities. This is expected to increase the demand for processed foods and meat protein in developing countries.
- Growing demand for food- The growth in global population will directly affect the demand for processed foods. Also, to feed the global population, the agricultural production will also have to increase in developing regions.
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