Report says F&B suppliers not ready for disruption due to outdated tools

A new report says legacy approaches plague the food and beverage industry, leaving suppliers inadequately prepared for the next major disruption, regulatory changes and demand for more sustainable products.

TraceGains, a provider of networked  compliance, quality and solutions in the food and beverage (F&B) industry, released the report, “Old Habits, New Challenges: The Critical Need for Modernization in Food and Beverage Supply Chains,” measuring the readiness and sophistication among suppliers to manage regulatory change and market influences. The report is based on responses from more than 450 global F&B industry suppliers.

The new research comes on the heels of unprecedented regulatory change, creating razor-thin margins for error in product formulation, labeling and market entry. As consumer demand for supply chain traceability grows, independent experts such as Bain & Company have discovered companies with advanced digital tools for visibility are beginning to outpace less sophisticated competitors.

TraceGains found that almost half of all suppliers commonly rely on legacy approaches to manage communications with buyers in the food and beverage industry. Beyond daily tasks, this continued reliance on outdated tools hinders their ability to achieve greater efficiency, maintain compliance, and meet evolving environmental, social and governance (ESG) standards.

• Nearly half (48 per cent) still use manual spreadsheets to manage day-to-day tasks, processes, and document exchanges.
• Over two thirds (71 per cent) admit that outdated processes sometimes or often create issues in their day-to-day work.
• The biggest issue is time consuming tasks (60 per cent), followed by data entry errors (39 per cent) and miscommunication (32 per cent).

This lack of modernization among suppliers is partially due to awareness: one in four are simply unfamiliar with available technology to better manage customer relationships with F&B brands. Recent food safety incidents have heightened scrutiny on regulators, while state governments push for faster federal action.

• Of those familiar with technology, two-thirds (65 per cent) cite “keeping up with regulatory changes” as the top motivator for modernizing internal software.
• Other contributing factors include faster responsiveness to consumer preferences (58 per cent), better agility to manage supply chain disruptions (42 per cent) and ability to adopt tech advancements like AI (33 per cent).
• Further, almost half (44 per cent) of suppliers cite evolving consumer behavior including a preference for sustainable products and increased demand for online delivery has had a significant or moderate impact on business operations.
• When it comes to decision-making, nearly 89 per cent of suppliers believe alignment with corporate sustainability goals is a crucial consideration, with over half (53 per cent) rating this alignment as very important.

“This new research underscores the urgent need for suppliers to update their operations,” said Paul Bradley, Senior director, product marketing, TraceGains. “With increasing regulatory pressures and shifting consumer demands, widely used, outdated methods are putting companies at risk. Embracing digital solutions should no longer solely be seen as a competitive advantage – it’s required for staying ahead and meeting compliance, sustainability and market demands.”