ERP Manufacturing Insights

Food & Beverage Trends to Look Forward to in 2021

Posted In:
Beverage Industry Trends 2021

This article was written by ERP Advisory Board member, Rose of Sharon DeVos

Food & Beverage Trends to Look Forward to in 2021 . ” The New Normal”

In 2020 the world faced an unprecedented food supply crisis. Certain foods sporadically appeared and disappeared from store shelves, went bad in tanker trucks, and rotted in the fields. The supply chains for food failed, and consumers panic-purchased. In 2021, Food and Beverage Industry manufacturers need to make sure this never happens again. Then, they must respond to the paradigm shift of consumer thinking on a host of issues, including packaging, traceability, sustainability, and safety. 

As we settle into a new normal” in the ongoing fight against COVID-19, the Food and Beverage industry is set to rapidly scale new product lines and manufacturing methods created by the crisis. Never has there been such a sudden dramatic change in what products consumers want, when they want them, and how the distribution chain meets that demand. The big questions affecting 2021 are unanswered – namely: What regions will recover the quickest? When will consumers start dining at restaurants indoors again? Manufacturers and distribution chains will need sophisticated ERP systems and other technology to pivot as conditions change quickly. 

Here are 6 major trends in food and beverages that will impact how manufacturers do business in 2021

1. There will be a far greater focus on Supply Chains.

Supply chains for food experienced major disruptions in 2020. We all saw the empty shelves. Now, expect to see new senior-level positions like VP of Supply Chain Contingency Planning or VP of Value Chain Transparency in 2021 and beyond to ensure the right products go to the right places at the right time. In 2020, food manufacturers faced major disruptions in their supply chains, not due to lack of food, but lack of packaging and methods to get the food destined for restaurants into consumers’ kitchens.

According to McKinsey & Company, there was a 29% increase in grocery purchases from March 2019 to March 2020. In 2021, manufacturers need to react quickly to the changing markets as certain parts of the country (and the world) periodically and unpredictably open and close the restaurant business. Entire supply chains will need to quickly change back and forth between grocery store customers and foodservice customers – and do it regionally. ERP and supply chain management systems will play a major role in how quickly and effectively suppliers and manufactures can make the switch.

2. Consumers will be more educated and want more information about their food.

Consumers will spend more time researching and thinking about their food choices. More than ever, consumers are on the Internet. In March 2020, according to Statistica, worldwide use of social media, a popular source of information, increased 21% over the past year. Consumers are educating themselves on healthy eating, cooking, and wellness more than ever. They are interested in where their foods come from and want to feel good about their brand choices. Companies in the food and beverage industry should be intentional and transparent about everything from ethical issues (like women-owned, minority-owned suppliers) to environmental, human/animal welfare, and sustainable sourcing. Innova Market Insights suggests that the confluence of consumer transparency and technology like invisible barcodes, QR codes, and near-field communication will bring the brand values to the consumer while keeping a clean look and feel to printed packaging.

3. Demand for Touchless” will drives technology improvements, marketing opportunities

In 2020, mainstream grocers updated their apps so shoppers can have a touchless” experience – scanning items and checking out without standing in line or touching a keypad. Grocers are ramping up checkout platforms. Soon these apps could provide consumers with links to personalized brand information, recipes, reminders, and other notifications, which further influence buying decisions. Manufacturers will need excellent traceability only available via technology like ERP. Soon consumers may want to see that real traceability on their phone when they are in a store.

Food Manufacturing Trends in 2021
Cheese Production in 2021

4. Consumer demand for eating for health and immunity will change product lines.

Consumer anxiety from the COVID-19 pandemic is driving them to look for foods and beverages which support their immune system. Consumers will be looking for foods naturally high in vitamins, minerals, antioxidants to protect themselves from infections. In 2020, new launches of drinks with immune health positions were up considerably. Companies are launching products focusing on immune health,” immune-boosting,” and immunity support” for a wide range of markets, from formulas for babies to sports nutrition and fermented beverages. According to Google Trends, the term Immune Support” spiked as a search term in March 2020, went to more normal levels in May, and since then has been steadily increasing, staying over twice the pre-pandemic levels as of January 2021. Expect consumers to make decisions on what to eat depending on what they perceive will keep them healthy. During the peak of the crisis, searches related to the immune system surpassed searches for weight loss. Manufacturers will need the flexibility to stop making one product suddenly (like a weight-loss shake) and start making another product (like an immune-boosting drink.)

5. Food packaging will demand considerable innovation.

There will be new product investments in partially cooked/ready-to-assemble foods both for home and foodservice. Consumers will want (and be willing to pay for) packaging that keeps foods hot or cold, can be microwaved, is attractive, prevents leakage, is tamper-proof, and is perceived as clean-packaging.” QSR web author Bruce Reinstein predicts a paradigm shift in food packaging for foodservice. Consumers will have a Food-safety” first mentality, and packaging plays an important role in the safety perception.

Consumers will need more disposables for prepared meals and foods purchased in grocery stores and shipped via many forms of delivery services. When the pandemic started, they were willing to sacrifice sustainability for safety, but as the pandemic effect matures, consumers will prefer packaging that is both safe and sustainable.

6. The demand for non-perishable foods will open new opportunities.

In March 2020, for the first time, consumers saw popular items disappear from the shelves. They no longer have faith that the items they want to buy will be there when they want them. Grocery sales went up as everyone stocked up. Consumers now prefer to keep items in their pantry instead of running to the grocery store daily. They are looking at expiration dates and thinking much more proactively about the foods and beverages they consume. Categories like Emergency Food Supplies and Kits” are now available at popular stores like Costco and Sam’s Club. The global canned food market is poised to grow at a CAGR of 4% through 2024.

In summary, the only certain thing – is change. Manufactures need to be nimble. One of the most critical keys to reacting quickly is an effective ERP system and well-trained employees using that ERP. Companies need to develop meaningful KPI (Key Performance Indicators) and frequently review them to identify areas of concern. The shock of 2020 has forever changed how the Food and Beverage Industry meets consumer demands. However, with insights available in real-time on sophisticated platforms, including ERPs, we will meet the challenges of the future not only for profit but also for humankind’s good.

This article was written by ERP Advisory Board member, Rose of Sharon DeVos

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