By EFI Group’s food & flavors industry engineers
The conversation around food is not getting any quieter and, as a result, there is increasing pressure on food and flavor manufacturers to address a wide range of market-driven, regulatory and business changes and challenges.
Here’s just a brief synopsis of what the food and flavors industry is currently facing, as well as what we’ve seen through our work with our food and flavor manufacturer clients:
Market-Driven Challenges
#1. Keeping up with Consumer Tastes
Let’s start with the ongoing challenge of keeping up with palettes.
On one hand this is nothing new because, just like the fashion/clothing, food is one industry that’s constantly evolving.
On the other hand, addressing consumers’ ever-increasing range of tastes and demands has never been more difficult (thank you Top Chef and Dr. Oz), especially for food and flavor companies seeking solutions for what today’s consumers expect their food, and those who manufacturer it, to do and be:
- Healthy, supports wellness
- Free from trans fats, artificial colors and flavors, preservatives, antibiotics and, often, allergens
- Varied, provide variety
- Local
- Organic
- Gluten-Free
- Live (probiotics)
- On-trend flavor wise*
- Safe
- Convenient
- Authentic
- Transparently
- Affordable
Of course, this is only a partial list, covering only food and flavor for human consumption, and manufacturers are also being tasked with addressing shifts in pet food and livestock.
But of even more importance is that this list of market-driven demands hints at an even bigger challenge for the food and flavor industry: consumer distrust.
*McCormick, keeps their finger on the pulse of what people want to eat and recently released their annual list of flavor trends for 2016. You can find that here.
#2. Overcoming Distrust
As an overview, The War on Big Food is the most comprehensive article we were able to find on the issue of consumer distrust and how food, flavor and beverage manufacturers are responding. It includes interviews with some of the largest manufacturers in the country and the specifics of what they’ve been doing to evolve.
Also, related to overcoming consumer distrust is the vast array of issues involving food safety and security.
Regulatory Challenges
#1. Adequately Addressing Food Safety and Security
Last year, the FDA stated it would be making a shift from “reactive to preventative.” While the specifics on how food and flavor manufacturers will ultimately be impacted is not fully clear yet, there is not doubt that big changes in regulation will result in big changes for individual manufacturers.
For our readers not in food and flavor manufacturing, here’s an overview of safety vs. security:
Food safety covers handling, preparation and storage of food to prevent illness and injury.
Food security is defined by the U.S. Food and Agriculture Organization (FAO) as a global state in which “all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life.”
For food and flavor manufacturers, safety and security challenges apply not only to the consumer and markets, but also to employees and the plant itself.
In 2015, Food Manufacturing interviewed Terry Smith, Executive Vice President of Operations at Jack Link’s Beef Jerky, and Kip Dowding, Manager at A.T. Kearney’s Strategic Operations Practice, on plant safety and security in the food manufacturing industry. The article is quite comprehensive and covers many of the challenges and potential solutions related to food safety and security: Q&A Plant Safety, Security Surrounding Food Facilities
#2. Mitigating Supply Chain Risk & Increasing Transparency
The call for transparency in the food and flavor industry poses equally difficult challenges. Manufacturers must not only understand what their products are made of, but also the regulatory status of each component and the product overall and the product’s origins in order to manage regulatory requirements, share information with each stakeholder group and reduce risk stemming from the supply chain.
To paint a more detailed picture of supply chain management, food and flavor manufacturers are tasked with:
- Collecting information from upstream suppliers. This includes substance declarations; certificates for non-GMO, halal, organic, kosher, halal, etc.; and certificates of origin.
- Keeping an eye on trends and monitoring their impact on suppliers. This means that understanding trends in food and flavor are not only critical for meeting consumer demand, but also for ensuring the health of the supply chain.
- Ensuring compliance and fulfillment capability, which requires meeting current regulatory obligations, as well as tracking discussions about future requirements. Additionally, making sure suppliers are in compliance.
- Protecting trade secrets while also addressing media and customer questions.
Staying abreast of technology is highly critical for both increasing both profitability and consumer trust because of technology’s potential to dramatically evolve food production and logistics, as well as improve transparency. The easier it is to follow the supply chain to the point of origin and assess risk at every juncture, the better for manufacturing efficiency, productivity and the longevity of the business.
Business Challenges
#1. Identifying Compliance Requirements Early Enough Product Development
Compliance is not only important for building trust in the marketplace, it also impacts the development of new products. The challenge is that, often, those responsible for ensuring compliance and monitoring for emerging regulations are not the same individuals responsible for new product development.
This “silo” effect can result in food and flavor products getting all the way to launch and then stalling.
Food and flavor manufacturers need to effective systems for checking the regulatory status of ingredients, as well as the concentration and application of those ingredients, and under more than one jurisdiction (given that different countries have different labeling, quality and claim regulations).
#2. Applying Innovation & Technology
From innovations that allow for extended shelf life to technologies that improve throughput, there is much on the horizon to improve food quality, development and production.
Finding the resources required to innovate and/or apply new technologies and equipment has always been a challenge for manufacturers, but is key for remaining competitive.
Therefore, it’s important to analyze all potential investments and determine where available resources will generate the most long-term ROI and help to achieve the growth goals of the company.
#3. Increasing Plant Floor Productivity
All manufacturers strive to increase plant floor productivity, and those in the food and flavor industry often have unique opportunities to do so. Continually examine the big picture and challenge leadership and teams with proposing new solutions for improving the bottom line. Key questions include:
How can we produce above the bottleneck? Do we need to widen the line? Bring in additional equipment?
How can we increase production time between sanitation events? How would changing belts or moving from hydraulic drives to electric or pneumatic help us with sanitation? Should we consider isolating certain rooms?
How can we improve overall equipment efficiency? Is our equipment right for withstanding the environment? Would changing material and/or finishes make a difference? Are there design changes that would allow us to access internal components more easily?
How can our processes and equipment be adapted for multiple applications (baking, canning, freezing, packaging)?
Evolving an Industry
Clearly, are many avenues through which food and flavor manufacturers can gain a competitive advantage. We are working at the forefront of food and flavor to help our clients solve today’s and tomorrow’s challenges efficiently and effectively, preparing them to be a forerunner as they work to take their industry into the future.
No one takes meeting industry challenges in way that increases profitability more seriously than our team. If you’re a manufacturing company seeking to increase results in 2016, contact Jim Solich at jsolich@jims26.sg-host.com
