Food and beverage (F&B) manufacturers and retailers face unique challenges that set them apart from other industries. While all businesses deal with logistics, F&B companies face a much higher level of difficulty: complying with strict food safety regulations, maintaining cold chains, handling perishable goods and operating on tight profit margins.
The global cold chain tracking and monitoring market has grown significantly in recent years. According to Allied Market Research, it was valued at $4.6 billion in 2020 and is expected to reach $15.2 billion by 2030. This increase highlights the enormous responsibility and cost borne by companies striving to keep our food supply safe and fresh.
The labor shortage that plagues many industries is hitting the food and beverage industry particularly hard. The harsh working conditions in this sector – cold, damp environments and the need to maintain strict hygiene standards – make these jobs less attractive, leading to a higher rate of automation. Tools such as mobile industrial carts and workstations are designed to increase efficiency and productivity in these demanding environments, allowing companies to do more with less.
Efficiency is key. Imagine trying to run a warehouse when a third of your workforce doesn’t show up. This scenario is becoming increasingly common, forcing F&B companies to innovate rapidly. They’re not just automating processes, they’re rethinking the way they work from the ground up. This shift in thinking is driving several critical trends across the industry as companies try to adapt to new challenges and opportunities. From redesigning their supply chains to leveraging cutting-edge technology, F&B companies are charting a new course for the future.
Trends that shape the industry
- Micro-fulfillment and mega distribution centers – One notable trend is the shift toward micro-fulfillment centers in densely populated areas. These centers allow for faster response to seasonal demand and replenishment of high-turnover products. On the production side, however, bigger is often better. Consider the massive automated distribution center built by Smithfield Foods and Lineage Logistics in Kansas. At nearly 20 million cubic feet, it’s a testament to the scale and complexity required to efficiently manage today’s food supply chains.
- The need for automation – With wages and supply chain costs rising, the return on investment for automation is now being evaluated over longer periods of time. The labor shortage has made it clear that automation is not just a cost-saving measure, but a necessity for survival. Companies like RIOS Intelligent Machines Inc. and Dematic are helping F&B companies automate everything from packaging to mixed case order fulfillment to maintain production levels even as the available labor pool shrinks.
- Individualization in material handling – Due to the corrosive effect of the cleaning agents and the extreme operating conditions, F&B establishments have special requirements. Companies are developing innovative, tailor-made solutions that can withstand the harsh environmental conditions of F&B establishments. These include, for example, the EC-Polar series of trolleys, which operate efficiently at temperatures as low as -4 degrees.
- Maximize space with vertical storage solutions – The shift from just-in-time to just-in-case warehousing models has created space issues for many F&B businesses. High-density vertical storage solutions are becoming increasingly popular, allowing businesses to expand their capacity without increasing their physical footprint. These systems are not just about storage; they also contribute to sustainability by reducing the need for additional facilities and minimizing the environmental impact of operations.
- More transparency throughout the supply chain – Supply chain visibility has become a top priority for food and beverage companies due to recent global disruptions. Companies are now integrating their transportation, warehousing and labor networks into unified dashboards, providing unprecedented levels of visibility and a new understanding of the importance of real-time data for informed decision-making. This integration improves efficiency and mitigates risks associated with third-party logistics providers.
Innovations for a resilient future
The food and beverage industry is going through a period of profound change. The challenges we face – from labor shortages to strict regulatory requirements – are forcing companies to rethink their strategies and adopt new technologies. But within these challenges lie significant opportunities for growth and improvement.
A proactive approach to innovation is key to success in this challenging market. Companies can build resilience and increase efficiency by investing in automation, improving supply chain visibility and customizing solutions to meet the unique needs of F&B operations. These efforts help stabilize a critical supply chain and position companies for long-term success in an increasingly competitive environment.
As we look to the future, it is clear that those who embrace these technological advances will take the lead and set new standards for productivity, sustainability and employee engagement. At Newcastle Systems, we are proud to be part of this evolution, providing the tools and expertise that will enable F&B businesses to survive and truly thrive.
About the author:
Founder and CEO John O’Kelly, a pioneer in the mobile powered industrial cart industry, founded Newcastle Systems in 2005. John has grown the company to 40 employees and was recognized as a Supply Chain Brain Top 100 Supply Chain Partner in 2022. To meet growing demand, the company moved from Haverhill to a larger facility in Amesbury, MA. The mobile carts are used in manufacturing, retail, and shipping and receiving applications by companies such as Walmart, UPS, DHL, Wayfair, Tesla, and Amazon. Newcastle Systems recently released an industry report titled “Bridging the Gap Between Humans and Automation.”
