Food and beverage (F&B) manufacturers and distributors face unique challenges that distinctly set them apart from other industries. While all companies deal with logistics, F&B businesses must also navigate a much higher degree of difficulty with stringent food safety regulations, maintaining cold chains, managing perishable goods, and operating with thin profit margins.
The global cold-chain tracking and monitoring market has grown significantly in recent years. According to Allied Market Research, it was estimated at $4.6 billion in 2020 and is projected to reach $15.2 billion by 2030. This rise underscores the enormous responsibility and costs shouldered by companies striving to keep our food supply safe and fresh.
The labor shortage plaguing many industries hits F&B companies especially hard. The harsh working conditions inherent in the sector—cold, wet environments and the need to maintain strict hygiene standards—make these jobs less appealing, leading to a higher adoption rate of automation. Tools such as mobile-powered industrial carts and workstations are designed to enhance efficiency and productivity in these challenging settings, allowing companies to do more with less.
Efficiency is crucial. Imagine trying to run a warehouse when a third of your workforce doesn’t show up. This scenario is increasingly common, forcing F&B companies to innovate rapidly. They’re not just automating processes but rethinking how they operate from the ground up. This shift in thinking is driving several critical trends across the industry as companies seek to adapt to new challenges and opportunities. From reimagining their supply chains to leveraging cutting-edge technology, F&B businesses are charting a new course for the future.
Trends Shaping 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 quicker response to seasonal demands and replenishment of high-turnover products. However, on the production side, bigger is often better. Consider the massive automated distribution center built by Smithfield Foods and Lineage Logistics in Kansas. Spanning almost 20 million cubic feet, it’s a testament to the scale and sophistication required to efficiently manage today’s food supply chains.
- The need for automation – With rising wages and supply chain costs, the return on investment for automation is now evaluated over longer periods. The labor shortage has made it clear that automation isn’t just a cost-saving measure; it’s a necessity for survival. Companies like RIOS Intelligent Machines Inc. and Dematic are helping F&B businesses automate everything from packaging to mixed-case order fulfillment to maintain production levels, even as the available labor pool shrinks.
- Customization in material handling – F&B facilities have unique requirements due to the corrosive nature of cleaning agents and the extreme conditions in which they operate. Companies are innovating with custom solutions designed to withstand the harsh environments typical of F&B operations, such as the EC-Polar Series carts, which function efficiently in temperatures as low as -4 degrees.
- Maximizing space with vertical storage solutions – The shift from just-in-time to just-in-case inventory models has left many F&B companies scrambling for space. High-density vertical storage solutions are increasingly popular, allowing companies to add capacity without expanding 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.
- Enhancing visibility across the supply chain – Supply chain visibility has become a top priority for F&B companies, driven by recent global disruptions. Companies are now integrating their transportation, warehouse, and labor networks into unified dashboards, offering a level of transparency previously unheard of, with a new understanding of the importance of real-time data in making informed decisions. This integration improves efficiency and mitigates risks associated with third-party logistics providers.
Embracing Innovation for a Resilient Future
The F&B industry is navigating a period of significant transformation. The challenges we face—from labor shortages to stringent regulatory demands—push companies to rethink their strategies and adopt new technologies. However, within these challenges lie significant opportunities for growth and improvement.
A proactive approach to innovation is the key to thriving in this demanding market. Companies can build resilience and drive efficiency by investing in automation, enhancing 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 businesses for long-term success in an increasingly competitive landscape.
As we look to the future, it’s clear that those who embrace these technological advancements will lead the way, setting 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 empower F&B companies to survive and truly thrive.
About the author:
A pioneer in the mobile-powered industrial carts industry, founder and CEO John O’Kelly began Newcastle Systems in 2005. John has grown the company to 40 employees and was recognized as a 2022 Supply Chain Brain Top 100 Supply Chain Partner. To meet growing demand, the company moved from Haverhill to a larger location in Amesbury, MA. The mobile carts are used in manufacturing, retail, and shipping and receiving applications by companies including Walmart, UPS, DHL, Wayfair, Tesla, and Amazon. Newcastle Systems recently released an industry report, Bridging the Gap Between Humans and Automation.
