Digital Transformation in the Food & Beverage Industry

DIGITAL
FOOD & BEVERAGE
INDUSTRY
TRANSFORMATION
- IN THE -

300 E Royal Ln #127, Irving, Texas 75039
1- 888 - 494 - 0588 | sales@bluemailmedia.com | www.bluemailmedia.com
Table of Contents
I. Introduction
II. State of Digitalization Up to Now
III. Checklist for Successful Digital Transformation
1. Clear Mission
2. Data-Driven Decisions
3. Business Models
4. Cross-Functional Team
5. Co-Innovation
IV. Brand Delivery: The Way to Success
V. ERP in Food & Beverage Industry
VI. Effect of AI, VR, and AR on Food & Beverage Company
VII. Benefits of Big Data in Food & Beverage Industry
1. Customer Behavior Analysis
2. Improved Efficiency
3. Deeper Insights
4. Quality Control
5. Enhanced Sales Tactics
VIII. Future of Block Chain in Food & Beverage Space
IX. Top Trends to Follow in 2019
X. Conclusion

Digital Transformation in the Food & Beverage Industry | P01
Introduction
State of Digitalization Up to Now
The era of technologies we breathe in is bringing massive changes in every sector. Being on the edge of a
generation that is led by digitalization, even the professionals from Manufacturing Industry have also started
adapting digitalized techniques for their lead generation strategies. They do, now, not only understand but
also have begun believing that competition in manufacturing industry has gone to extreme heights. And thus,
not actively participating in online marketing is something they can't afford.
Generally, we can see a lot of confrontation to technology in the F&B industry. In most of these industries,
automation is limited to specific processes such as bottling, canning, and packaging whereas, the information
technology (IT) is narrowed to corporate finance, accounting, and HR. Many still rely on paper production
schedules and spreadsheets. Despite the bulk of information flowing through the separate chains of food &
beverage systems, integration of the automation or digital technologies across the enterprise is rare.
From the past decades or so, the marketplace has become highly competitive, and the F&B industries are
experiencing sharp changes in the way they do business. The increased commoditization, as well as
diversification of food and beverage products, has paved the way for this extreme variation that made food
and beverage companies differentiate themselves, their produces and also their brand.
Besides, highly fluctuating needs of the present day consumers such as higher levels of service for their
money, and exceptional product variety adds to it. Heightened global competition and these escalating
pressure are making it harder for F&B industries to see the desired outcome. Not to forget, these industries
are also facing fundamental challenges in the food safety and regulatory fields that are set to change how
they operate beyond comprehension.
The industries have to explicitly monitor and track every phase of action right from raw components, finished
stock, packaging, storage as well as distribution to ensure agreement with the newest safety rules. Driven by
these challenges, the F&B industries are looking for a digital transformation in manufacturing and supply
chain management to reduce operational costs, upsurge production efficiency, and better overall service to
achieve desired levels of profitability.
Cost Quality Sustainability Safety

Digitalization of
F&B Industry
New Business Models,
New Products,
New Services
Disruptive
Services &
Business
Increased
Effeciency &
Productivity
+ + =
As a result, these industries lack timely information both from a production and financial point of view. In
today's rapidly evolving technology space and fast-paced economy, the lack of real-time data for decision
support and business analysis is hampering the growth of such companies.
Also, food and beverage executives are struggling to survive today’s unmatched industry disturbance. They
are pressurized continuously from new, digital competitors who pull the power of digital technologies to
launch innovative products and get closer to customers rapidly.
From the next chapter, we will explain how F&B Industry can fundamentally change this deep-rooted sphere
by digitalizing R&D, production, and letting the industries utilize analytics to create a competitive goal.
Various sectors under the food and beverage spectrum are working towards reaching the peak of growth
scale. They started embracing innovation and accepting digital strategies by exploring a wide range of
opportunities in the internet world. These new changes are offering exciting ways to leverage the information,
automate specific manual processes, and thereby focus on engaging the consumers.
While the impact of this transformation is favorable for the F&B industry, it can also be unapproachable at
some point in time. So, to help you with these critical questions, we provided a highly verified checklist that
guides your digital transformation journey.
Industries must have a fundamental mission for every digital plan. It can either be
related to the core of their organization’s existence or experiences their services
offer to the customers; your goal should always be clear at the beginning of the
project. If you are unable to express your mission, your customer’s decision will
also be tangled, and thereby they hesitate to buy from you.
Checklist for Successful Digital Transformation
1. Clear Mission

Data forms a crucial element of any digital transformation. To take the maximum
advantage of modern tools and processes, you need to have accurate, and real-time
data along with systems to gather, store, and share it with the users. Access to these
data helps F&B executives to make timely decisions and craft the right strategies
based on facts, not on unreliable comments. One need to have large chunks of data
to reach this level of sophistication. The F&B industries can opt for cloud
deployment for economical storage of these data.
2. Data-Driven Decisions
Understand your business model ﬁrst before executing it in real-time. You can begin
with identifying the core objective of your company and then determining the type
of technologies, systems and people you need to support the drafted business
model. You can also involve ingredients, suppliers, packagers, partner networks,
and processors to manage the variables. Please note that you can have multiple
business model and numerous revenue streams.
3. Business Models
It is always better to have a cross-functional team in your enterprise. Instead of
including only IT team to plan and execute digital agenda by themselves, you can
also include personnel from other levels of the organization to set the company
culture, commercializing data, risk tolerance, regulation compliance, investment
priorities, new revenue streams creation, and many more. You must make sure that
your team includes people from diverse backgrounds and multiple areas to get a
broad perspective. Besides, there must be a method to share ideas and ensure it is
well-matched with the members of other teams.
4. Cross-Functional Team
Co-innovation goes well with the cross-functional concept in almost every business
scenario. Especially, working with partners on new products or services is becoming
extremely important in the F&B industry because of the continuous evolution of
customer trends. These developments make way for new production or delivery
mechanisms. More important, it lets the consumers make personalized choices
based on various factors, including taste preferences, diet restrictions, number of
servings, or preparation skills. So, industries must think beyond traditional
approaches to transform the way they do business.
5. Co-Innovation

Brand Delivery: The Way to Success
Food & Beverage industry consists of multiple segments each dealing with its challenges to create brand
value in local, national or global markets. However, to grow their business, every F&B manufacturers or
distributors must include greater elasticity, agility, and increased delivery speed to answer the safety
regulations, rapidly changing customer expectations or instabilities in the market.
To advance their procurement and inventory control management tasks, they must track fresh supplies and
ﬁnished goods precisely. Besides, they have to bring in tools and automation to synchronize their production
competencies and enhance their capability to handle diverse resources and product lines concurrently.
Notably, they must ensure quality consistency across product lines to build their brand value among
consumers.
The F&B industries can also simplify complexity and manage cash ﬂows better by optimizing plant operations
and strictly controlling key production elements such as labors, materials, and equipment.
MANUFACTURER MARKETERS
CONSUMER
Bringing the manufacturer
closer to the consumer

Food & Beverage industry should implement Enterprise Resource Planning (ERP) systems to control their
internal operations as well as manage the supply chain right from suppliers to retailers, distributors, and
customers. Moreover, the right ERP system for an enterprise provides you with a wide range of benefits.
INTEGRATION
FINANCE &
ACCOUNTING
DELIVERY
METHODS
MANUFACTRUING
SALES
MANAGEMENT
INVENTORY
MANAGEMENT
SUPPLY CHAIN
MANAGEMENT
MOBILE
FUNCTIONALITY
HR
MANAGEMENT
INTEROPERABILITY
ERP
SYSTEM
Increased responsiveness to customer and market changes.
Easy monitoring of key HACCP (Hazard Analysis Critical Control Points) and
General Manufacturing Practices (GMP) actions.
Improved order management and customer satisfaction.
Improved real-time business intelligence to aid strategic decisions and growth plans.
Decreased response time, lead times, and thereby enriched logistics flow.
Optimized quality and scheduling resulting in better cash flow and increased ROI.
More efficient procurement, more accurate forecasting, and distribution
Improved management of supply chain and synchronization to align production better.
Better utilization of labors and capital equipment.

Effect of AI, VR, and AR on Food & Beverage Company
Technology has brought a remarkable improvement in the F&B industry today. It not only supports the
company but also aids the consumers by providing the best user experience. Researchers have revealed that
38% of consumers have faith in artificial intelligence (AI) as it improves customer services in the future. The
survey by ISACA says 64% of US consumers trust that augmented reality (AR) enhancements will help the
workplace. Besides, Adobe survey states that 47% of organizations are already using AI strategy in their
business operation. These stats show the importance of these emerging trends in F&B and other segments.
RP has several gains when appropriately implemented. But, before applying you have to consider the
following key factors:
ERP system with features intended to fit any particular business processes will speed the
implementation process as well as ROI. As some ERP systems are built for discrete
manufacturing operations and not processing, and thereby do not function at the plant level. For
instance, you can measure the throughput time in hours or days in food and beverage
manufacturers rather than taking weeks or months to do the same task.
Interface competences with prevailing data capture, warehouse management systems, and MES.
You need to identify the core functionality of the ERP system. You should look for financial
applications, procurement, technology platform, order entry, inventory management,
optimization, planning, scheduling, product configuration, manufacturing, complex distribution
system, EDI capabilities, flexible product costing, and many more.
Implementation methodology and tools for rapid ROI, quick deliverables, implementation, and
critical benefits that helps F&B industries to achieve a successful outcome in a short period.
Capturing customer information and business chain management to deliver business
intelligence solutions and help the decision-making process of the marketing and sales team.

Apart from helping companies, AI tools can also help consumers based on their
eating habits. That is, it guides them to the restaurants that serve similar food they
are fond of or the food they like to try out. Further, AI tools will also keep track of a
user’s data and suggests healthy meals based on their health condition.
Friendly Assistance-
Be it any F&B industry; the food items requires sorting. This process used to be
manual before a decade. Now one can do it with the help of AI tools and automation
quickly. Since food items must be of standard quality, manufacturers rely on AI to
sort food items. These new technology does sorting based on shape, size, weight,
and also the quality of the food items.
Sorting Process-
Artiﬁcial intelligence tools help F&B executives to strategize their business
operations carefully. AI is capable of tracking consumer’s behavior, including
eating, drinking, food-related internet surﬁng, food chains they visit regularly, and
many more.
The AI tools helps you in identifying every minute detail of your consumers such as
what exactly they desire to eat. Based on this analysis, F&B industries can make
changes in their existing products or launch the latest products to get the attention
of a large number of audience.
Planning-
There are various ways in which AI, AR, and VR tools can be handy to the F&B industry. Hence, invest in these
technologies to stay ahead in the highly competitive business race.
VR Global Market Size AR Global Market Size Al Global Market Size
2016 2022
$17.8bn
$161bn
$25bn
44.5%
CAGR
85.44%
CAGR
48%
CAGR
2016 2016 2023
($ billions) ($ billions) ($ billions)

Benefits of Big Data in Food & Beverage Industry
Big data has taken the Food & Beverage industry one step forward. The advancement in the technology along
with the big data is allowing F&B sectors to improve their marketing campaigns, data insights capability,
develop a highly interactive and innovative product to please the customers.
In the past few decades, these industries relied on reporting format instead of data. However, as the
customer’s preference and technological trends differ with time, it became challenging for the F&B executives
to keep up with it. These intricacies paved the way for the emergence of big data in this segment. It helped
the firms in analyzing both the structured and unstructured data from various sources.
The F&B industries can use this data for multiple purposes, including market development identification,
determining shopping trends, and consumer behavior. It has helped companies to come up with a new form
of marketing to attract a global audience. Many big players in this segment are reaping maximum benefit out
of this strategy. You can also implement the same in your company, and take your business to a whole new
level.
No businesses can benefit without proper implementation of marketing. According
to some studies, a company must spend at least 30% of the total capital in
marketing on an average. AR and VR can help you with this aspect by bringing
innovative and engaging approaches to promote brands. AR and VR campaigns take
your content beyond physical space. You can attract potential buyers and also
educate them on the nutritional value of food.
Brand Promotion-
With the help of virtual reality (VR), you can offer an excellent experience for the
customers. You can let them wear VR gadgets and show them the videos of making
tasty food items along with aromas, and giving them a virtual feel of the ambiance
of the place. This visualization technique automatically enhances the taste buds of
customers. Research reveals that customers promote places with a good ambiance,
food presentation, and music, although the food is of average taste.
Better Visualization-

Big data lets F&B industries to explore a wide range of new
opportunities in the local and global market. The data-driven approach
allows companies to embrace the latest trends in the market by
efficiently analyzing the data. The industries might take some time to
analyze the data, but it will give them the proper information and guide
them towards reaching the goals when appropriately implemented. It
helps them in understanding the customers better and thereby
automatically improves the quality of their service.
Besides, the companies can also understand their competition better
and gain a competitive edge to improvise their way of marketing the
products. Therefore, enhance your sales and business efficiency by
taking advantage of big data in your F&B firm.
2. Improved Efficiency
Most of the F&B industries are working towards a customer-centric
approach and improving the quality of the data they possess. The
in-depth study of this data helps the enterprises to fine-tune their
product based on customers demand and keep them happy. This
changes created a technically innovative space for data analytics in the
food and beverage segment.
Data analytics can have a significant impact on companies when the
data quality and effectiveness produces desirable results. Although it
remains a challenge at present, the upcoming innovations in F&B
industries are expected to deal with these intricacies effectively.
3. Deeper Insights
The F&B industries are finding it difficult to keep up with the changing
demands of a consumer. But, the appropriate analysis of customer data
will provide a clear insight into their changing behavior and also helps
the companies to improve the marketing strategies. Besides, the
development in the smartphone and online technology offers a wide
choice for the customers to meet their necessities.
The F&B industries can make the best use of these technologies by
collecting maximum data of the customer’s choice of food at a specific
time and place. This technique helps in gaining the potential value to the
business and also immensely improves the outcome of marketing
campaigns.
1. Customer Behavior Analysis

The blockchain is capable of creating a significant impact on the food and beverage industry. Most of the
organizations started realizing its importance in the business operation. As a support to this statement, the
2018 RSM Digital Transformation Survey reveals exciting information about the heightened interest in
blockchain strategy. This report says that only 12 percent of middle-market food and beverage industry is
currently using blockchain whereas 95 percent knew the importance of blockchain. However, 28 percent are
planning to use it in the next 12 months, and 53 percent may deploy it in the coming 13 to 36 months. Clearly,
this shows how industries are planning to use this technology by the end of 2020.
A right data analysis plan will help you in such
cases. It will provide an insight into the
variations so that you can cover them up as
early as possible. Hence maintain the quality
of the data and ensure that the taste of food is
not lowered any time.There are various quality
control tools online that simplifies the process
of maintaining data cleanliness.
The quality of products in F&B businesses are highly dependent on the quality of the big data. The industries
can meet the expectation of customers, and they can easily maintain the stability of the food supply with the
help of this rich data. So, the firms have to invest in maintaining the hygiene of big data by performing strict
quality control operations and providing the expected taste to the consumers as before. Otherwise,
customers may repel immediately, and you may end up losing them for your competitors.
4. Quality Control
The quality of products in F&B businesses are highly dependent on the quality of the big data. The industries
can meet the expectation of customers, and they can easily maintain the stability of the food supply with the
help of this rich data. So, the firms have to invest in maintaining the hygiene of big data by performing strict
quality control operations and providing the expected taste to the consumers as before. Otherwise,
customers may repel immediately, and you may end up losing them for your competitors.
4. Quality Control

1. Traceability
2. Marketplace Formation
3. Commodity Controlling
Here are the five main ways in which F&B industries can use blockchain technology to simplify their task.
Through this blockchain technology, industries can
easily track various information such as the source
of food, including country, region and the grower’s
field. For instance, imagine the food you purchase
comes with a QR or barcode. When you scan the tag
with your smartphone, you could see where the food
was grown initially, when it was picked, where it was
processed and how long it was resting on the shelf.
This systemized way of understanding traceability is
sufficient to validate the safety of food. Besides, it
also lets the companies interact directly with the
customers and provide additional branding.
Most of the F&B industries find it challenging to source quality ingredients in an adequate amount. As
farmers don’t know about the end consumers or their preference, the intermediaries gain a significant
amount of profits. But, the introduction of blockchain technology lets both the buyers and growers to
connect directly, with an increased percentage of profits directed straight to the farmers. Also, investors can
invest directly into farms producing supplies and then trade on that deal.
Since agricultural commodities are a huge business, the commodity managers are usually overwhelmed by
various challenges, including payment time lags and data management. With the help of blockchain
technology, they can address such issues by enabling innovation in this area.

4. Capitalization
5. Data Sharing:
Most of the smallholder farmers struggle to get bank loans because of various reasons. It includes land
ownership documentation, lack of credit histories, and other issues. All these make small farmers borrow
funds from money lenders at higher rates. But the tech-savvy agricultural entrepreneurs are using
blockchain to make this process easy. Now they can create investment tokens and thereby raise funds for
farming businesses without depending on others.
Other potential beneﬁts of blockchain for F&B industry include:
Certain companies who invest or buy the F&B products wants to learn more about it before purchasing. It
can include everything ranging from crop health information to salt and sugar levels in products. Blockchain
helps you in this aspect by providing all the essential information along the supply chain to the buyers. The
operators can enter data points such as salt and sugar content, humidity, light, air temperature, pH levels,
color, and other details into the blockchain for easier access.
Improved data Increased food safety Reduced food fraud
Increased proﬁtability Reduced cost Cut food waste

Top Trends to Follow in 2019
2019 turns out to be the prime year for the F&B industry. This year offers a wide array of opportunities
along with the influential aspects of the emerging trends like blockchain, AI, IoT, and many more on this
area. Besides, the changing buyer’s preferences and increasing costs will have a significant impact on this
business in today’s world. With so much happening here, the F&B companies must focus on key business
trends to stay ahead in the competitive market place.
Innovation and Differentiation
Through this blockchain technology, industries can easily track various information
such as the source of food, including country, region and the grower’s field. For
instance, imagine the food you purchase comes with a QR or barcode. When you
scan the tag with your smartphone, you could see where the food was grown
initially, when it was picked, where it was processed and how long it was resting on
the shelf. This systemized way of understanding traceability is sufficient to validate
the safety of food. Besides, it also lets the companies interact directly with the
customers and provide additional branding.
Transparency and Food Safety
In today’s world, consumers are showing their interest to know more about the
food they consume. So, F&B industries should give higher importance to food
safety issues more than ever to reduce the wastage amount. Technologies like
blockchain can help the industries in this aspect. So, companies must try to figure
out how to be a part of such technology in 2019.
Varying Preferences
Consumer preferences keep changing rapidly than any other factor in the F&B
segment. Their demand for exotic flavors that promote health and wellness or the
food that fuels their brains capability is still at the forefront. They always wish for
the products that provide additional benefits to their mind and bodies. Besides,
some consumers prefer buying the foods that are good for them as well as others
such as the food they eat are faux meat, plant-based, or packaged in an
environment-friendly material. Transparency into the food preparation process
helps the companies in this aspect.

2019 turns out to be the prime year for the F&B industry. This year offers a wide array of opportunities
along with the influential aspects of the emerging trends like blockchain, AI, IoT, and many more on this
area. Besides, the changing buyer’s preferences and increasing costs will have a significant impact on this
business in today’s world. With so much happening here, the F&B companies must focus on key business
trends to stay ahead in the competitive market place.
Rising Imprecision
The F&B companies are facing rising uncertainties in the market. The tariff and
global trade tensions may continue this year. Other risks include the interest rate
hikes, shrinking labor market, growing labor costs, and many more. Some
industries are facing issues regarding on-time delivery because of shortage of the
truck driver. Companies will have to look to emerging technology trends or
innovative business solutions to control these issues this year.
Mergers and acquisitions
Many companies in this segment are expected to work on enhancing the brand
value by adding new product lines and investing in their R&D to save money and
time. Also, there are a few companies who may acquire other segments with better
prospects, even if that area is outside their traditional business. So, pick the one
that pairs well with your financial terms while meeting consumer needs.
Conclusion

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