After a decades-long decline, investment in food and beverage is showing signs of recovery, with technology front and centre.
And the shift is far from small, with new data from Infor showing that 77% of global organisations plan to increase spending on technology by 20% or more.
“We are seeing a surge in tech investment in food and beverage,” says Mikael Bengtsson, industry and solution strategy director for food and beverage at Infor. “This is being driven by the wave of change and ongoing unpredictability that the industry is facing.”
These changes include rising energy costs and spiralling ingredients prices, meaning manufacturers are searching for ways to streamline operations and drive down expenses.
Where is F&B investment going?
Investment into food and beverage is being channelled into four key areas.
- Modernisation: Companies are modernising outdated processes and systems to improve visibility and resilience across their business operations.
- Advanced technologies: Stakeholders across the supply chain are adopting advanced technologies such as GenAI, robotic process automation (RPA) and process mining, to drive efficiency and enable informed decision-making.
- Data infrastructure: Food and beverage is investing heavily in the infrastructure to drive better business strategy.
- Customer-facing solutions: Suppliers, manufacturers and retailers are putting an increasing emphasis on technologies that help businesses better understand consumer preferences and respond to feedback, creating a more personalised experience.
However, despite this increased focus on investment in technology, the industry is failing to see results. Why?
Investment in F&B not getting results
“A lot of companies are still struggling to turn investment into real business impact,” says Infor’s Bengtsson.
And it appears a lack of oversight is the reason behind it.
“Too often, companies end up taking a fragmented approach rather than implementing holistic solutions that align with their strategic goals,” says Bengtsson.
What’s more, employee behaviours are also not being taken into account, with Bengtsson explaining that many projects fail because they don’t factor in employee resistance to change, and the need for full support from leadership.
And on the subject of workforce, Europe is experiencing an ongoing skills shortage, leaving companies struggling to find people who can implement and manage new technologies effectively.
“Four in five businesses struggle to find the workers that they need with the right skill set,” Roxana Mînzatu, European Commission Vice-President responsible for social rights, skills and quality employment, recently told the European Parliament in Strasbourg. “There are more than 40 occupations with EU-wide shortages.”
Added to this, legacy systems entrenched within a business can hold progress back by stopping them from fully leveraging the insights and efficiencies new technologies can provide.
Another issue is that, while investment in some areas is growing, investment in others is severely lacking.
“There are big gaps,” says Bengtsson. “Poor integration between systems remains, and is preventing companies from optimising processes end to end.”
This makes the implementation of technologies like real-time supply chain visibility tools more difficult.
“Predictive intelligence capabilities also continue to be underfunded, limiting the ability to anticipate market shifts before they happen,” adds Bengtsson.
Meanwhile the growing threat of cybercrimes against food and beverage is failing to get the attention or investment it desperately needs to avoid a potential disaster in the future.
And companies, large and small, are grappling with the issues of cost versus reward and the need for quick fixes.
“Businesses are under pressure to deliver quick wins, but generally, true digital transformation takes time and commitment. Even more so as many still rely on on-premises legacy systems,” explains Bengtsson.
Not all investment is failing
Despite the struggles, some manufacturers are experiencing, others are getting results.
“There are many that are getting it right,” says Infor’s Bengtsson. “The most successful organisations aren’t just throwing money at technology, they combine investment with highly optimised, intelligent processes that allow them to be agile and future ready.”
And his top tip?
“Technology investment needs to be aligned with clear strategic goals, rather than being treated as a standalone initiative.”
