Leveraging Cloud Computing to Adapt to Business Changes in the Food and Beverage Sector
While the COVID-19 pandemic was a misadventure for most businesses and people, the food business was booming. In particular, consumer packed goods (CPG) in the food and beverage sector saw unprecedented growth, with industry sales up 12% in 2020, according to Stacey Haas, a partner at McKinsey & Company. However, at-home consumption has unquestionably increased, but out-of-home consumption, historically generating the highest margin, came to nearly a standstill in the same period.
Long-Term Changes in Demand and Customer Behavior in the Food and Beverage Sector
What are the long-term changes in demand and customer behavior that the F&B sector should be aware of?
With its pervasive stay-at-home orders, mandated dining areas closures, and persistent labor shortages, COVID-19 has accelerated restaurant delivery. Enticed by mobile apps and dwindling delivery feels, many buyers are increasingly dining in on any food they desire via direct delivery. Subsequently, more F&B companies, including large food chains, are now making delivery part of their business strategies.
McKinsey's COVID-19 Impact Survey states that high variability may remain for some time in the industry. Notably, CPG brands experienced intense growth during the pandemic – more absolute growth in 2020 than in the four years between 2016 and 2019. Working from home gradually became a norm for many consumers, resulting in increased at-home consumption of packaged meals and dish care. Additionally, buyers also bought significantly more fresh food, bakery and dairy products, meat and seafood, and alcoholic beverages for their homes, according to McKinsey COVID-19 Impact Survey.
Another consequential impact of the pandemic on the F&B sector is that small companies are gaining market share, but large ones experienced the highest absolute growth. For example, McKinsey's COVID-19 Impact Survey found that even though large companies had the most dollar growth in revenue in 2020, only small ones raised their market share – from 18.2 percent in 2019 to 19.2 percent in 2020.
A COVID-19 Consumer Pulse Survey found that 37 percent of consumers tried new brands during the pandemic primarily because of their ability, an area in which large brands have an advantage. Such behavior will anticipately continue into 2021, highlighting how significant it will be for F&B sector players to ensure product availability for at-home consumers.
Next Steps: Leveraging Cloud Computing to Adapt Business Changes
Leon Peters, the Global Consumer Products Leader at Deloitte, writes that food and beverage companies should revisit their sourcing strategies, rationalize their product ranges, and assess the resilience and agility of their supply chains as well as their route-to-market channels. Peters adds that the sector needs to optimize and streamline the distribution networks and e-commerce to respond to key issues, such as managing working capital, maintaining supply chain risk mitigation, and moving supply to alternative route-to-market channels to safeguard revenues. Additionally, streamlining the processes supports key customers and suppliers to fulfil demand in current high-peaks and partners to sustain their relationships.
Unquestionably, F&B sector leaders will be defined by what they do along the three aspects of managing a crisis – respond, recover, and thrive. The key next step undoubtedly includes optimizing flexible work arrangements, including mitigating cybersecurity risks because of working remotely.
Fortunately, food and beverage companies can leverage cloud technologies to respond, recover, and thrive post-pandemic. This technology and the right partner can help F&B sector players accelerate the industry's digitization and innovation journey, from behind-the-scenes operational efficiencies to end-user-facing customer experiences. We have put together some of the ways cloud computing can help the F&B sector better serve customers.
Automating and Streamlining Labor-Intensive Processes
With the current labor challenges such as shortages of workers, F&B organizations can look for ways to automate and streamline processes to improve efficiency and productivity.
For example, the sector can use cloud-managed solutions to automate back-office activities like accounts payables and receivables, manual administrative processes like daily audits, and HR matters. As a result, the staff can focus less on back-of-the-house paperwork and more on the best customer experiences possible.
2. Personalisation
Personalisation is a key element in establishing great experiences for clients, and it has never been in greater demand than today. With cloud technology, food and beverage organisations can better understand and act on each customer's needs, preferences, and priorities, consequently increasing customer visits.
3. Cost Savings with the Cloud
As a business, you will always need to be conscious of your costs, and with a business model founded upon the use of cloud services, you can be sure that your running costs are kept at a minimum.
Typically, cloud technology removes the need for much of your physical infrastructure and instead replaces that with the agility and scalability that F&B companies require. In the past, your organization may have been paying a set price for services, which didn't fairly reflect their value to your business all year round.
Fortunately, cloud services from partners like Cloud Geeni allow companies to increase and decrease their IT capacity whenever they need to, so they are never paying for more than they need at any time.
Get Started with Cloud Geeni
Cloud Geeni provides cloud computing solutions that transform the way organizations store and deliver data. The solutions move existing IT infrastructure from on-premise servers into a private cloud, where it's managed and delivered back to you by a team of cloud computing experts.
Overall, Cloud Geeni offers your business unrivalled flexibility. For instance, our managed cloud solutions enable your employees to securely access data, files, and applications on any approved device, at any time, and from any place, allowing them to work remotely from home, on the road, or even on holiday. As a result, cloud technology improves efficiency, boosts productivity, and helps you maximize your billable hour.
What's more, with Cloud Geeni, your infrastructure is in safe hands. Your data is stored on private servers at our state-of-the-art, ISO-accredited UK-based data centres.
Additionally, we have robust security measures and a comprehensive disaster recovery system in place to safeguard your sensitive data from any external threat, hardware malfunction, or natural disaster.
If you are a food and beverage company looking to find out how you could utilize the power of cloud-based solutions, get in touch with our team here at Cloud Geeni.
We are a leading cloud provider who prides ourselves on our ability to meet customer demands with a tailored solution built to change and adapt to your specific business needs.