Consumer Demands are Driving Supply Chain Innovation in the Food and Beverage Industry
Changing consumer expectations are altering the transportation and logistics industry at an unprecedented rate – shifting attitudes towards online shopping have driven the rise of services such as same-day delivery, free returns and real-time shipment tracking that are becoming the standard.
With these changes in expectations, brick-and-mortar companies must make changes in their supply chain to meet demand and stay competitive in the marketplace. One way the industry has responded is the rapidly growing trend of direct to consumer (D2C) delivery subscriptions to items like home meal prep kits, shaving supplies, dog food, grocery delivery services, toilet paper and more.
New Requirements for Regulatory Compliance
By forging direct relationships with consumers, D2C businesses are able to gain more control over the entire shopping experience: From online ordering, to how a product is packaged and delivered, to the reverse logistics process of return and exchange handling.
Since the D2C supply chain extends right to the customer’s doorstep, this model comes with additional costs and operational challenges which need to be evaluated carefully. This is especially true when it comes to food and beverage companies – there are many considerations to keep in mind to ensure peak freshness, quality and safety, even beyond compliance with the Food Safety Modernization Act.
For instance, track and trace activities are critical when it comes to delivering food – consumers want to know exactly when to expect their delivery so it doesn’t sit out on the front step all day, and they expect to have visibility into any delays.
Changing Consumer Expectations Impact Packaging Designs
Furthermore, food packaging is becoming increasingly important. Consumers want to be able to discern ingredients, nutrition facts, where it came from and other information at a glance.
Refrigerated food packaging in the D2C model often requires specific types of labeling and packaging – for example, meal kits are assembled and labeled according to the recipe, and often include an ice pack to keep food cool, and grocery deliveries are often packed into an insulated bag. Sustainability is also becoming increasingly important; consumers want their meal kits delivered to their door, but also don’t want extra packaging waste that cannot be reused or recycled.
Making the Most of eCommerce’s Rise
Despite how crowded the marketplace has become due to the rise of e-commerce, companies that embrace these challenges with their consumers in mind can leverage solutions into strategic competitive advantages.
A recent Center for Food Integrity report found that consumers have a lack of trust in food companies when it comes to food safety – however, D2C food companies have the opportunity to improve trust and build a strong relationship with customers through transparency via tracing and tracking technologies.
The vast amount of data available in the transportation and logistics field enables many innovations, and new supply chain technologies have evolved to help companies address these concerns and build trust with their customers.
One existing data source that enables visibility into the status of shipments is a truck’s telematics device. Now that the ELD mandate requires many trucks to capture Hours of Service (HOS) information, fleets of all sizes have access to data that can track the real-time location of freight through platforms like Trimble’s Visibility solution. These platforms help create efficiencies, save money, and most importantly, build trust with customers.