Two years of the COVID-19 pandemic impacted supply chains, changing the economic indicators and consumer preferences. With many business and consumer sectors closed for a long time, the world watched closely into innovation in the food industry and improvement in supply chains.

Consumers are demanding healthier food choices, affordability, and sustainability. Several technological trends in the food industry will significantly affect operations. Understanding the future trends of the food industry will enable you to better prepare for years to come.

1. Supply chains will grow resilient

Global disruption in supply chains will be a top threat to the food industry in the next five years. Business leaders have recognized the seriousness of sudden and dramatic shifts caused by the COVID-19 pandemic. Transportation delays and shutdowns either significantly slows or ceases operations. The food industry must prepare for another worldwide-scale shutdown.

We must reinforce the existing supply chains and encourage more reliable local sourcing by setting up alternative sales outlets. In the future, businesses will also look into controlling the movement of materials and products, as overall supply chain visibility is among the top focuses for risk mitigation.

Since the liabilities in the supply chains are exposed, industry leaders are keen to improve them. Consumers want to learn about the origin of their food, including how it is produced and where it has been, an assurance of its safety which is a game-changer for the food industry.

2. There is increased seriousness about sustainability

For businesses, responsible and ethical sourcing is a significant component of becoming more sustainable, optimizing efficiency in using ingredients to avoid spillage and other preventable losses. Since 40% to 50% of food waste occurs at home, educating consumers on the best ways to get the most use of what they buy will also be significant.

Sustainability efforts are seen as a risk mitigation measure reflecting the potential adverse effects on profit margins due to excessive waste. The food industry desires to minimize the environmental impact.

3. Adoption of big data and IoT will increase

Big data and analytics, the internet of things (IoT), artificial intelligence (AI), near-field communication, and blockchain will have the greatest impact over the next five years. When analytics is applied to a large dataset, it can lead to actionable insights affecting how supply chains behave.

IoT devices like smart sensors, scales, and thermometers assist in collecting data, automating the process, and importing readings in real-time for a picture of performance.

4. Enterprise software spending will rise

The food industry is generally serious about its digital transformations, and recent spending on enterprise software in most companies increased by up to 25%. The investment in a food ERP system or other technological platform is a must.

While barriers are holding businesses back from accelerated modernization, including limited visibility across operations and a lack of awareness of solutions, it pushed past those considerations. Creating a solid digital foundation is increasingly necessary to remain agile, confident, and competitive in the dynamic and fast-paced markets.

As per a survey, 80% of respondents reported improvements in key performance indicators (KPIs) due to digital transformation efforts. This demonstrates how effective purpose-built solutions can be in achieving goals and making measurable progress as an enterprise.

5. Demand for traceability and food safety will improve

Customers have a growing desire for transparency of food manufacturing operations and increased awareness of public health concerns. It is undoubtedly at the top priority of the industry’s decision-makers to regain trust from customers, be more aligned with their values, and be more transparent.

Traceability enhancers, such as blockchain technology, AI, and radio-frequency identification will continue to expand and get new adopters in food and agriculture. They enable fast data integration and identification of quality and origin of products.

IBM’s Food Trust, a blockchain-based solution, helps the food industry track and trace transactions across supply chains and is adopted by global players like Walmart, Unilever, and Nestlé. Additionally, digital platforms make it easy for consumers to utilize digital traceability tools and conduct research on product origins and sourcing while they are shopping.

Product recalls can damage a company’s reputation and has far-reaching impacts. Many companies in the food industry are looking for tools to give them complete, bi-directional traceability in the supply chains. Solution providers must ensure their ERP systems care and scrutinize.

Case in point, Provenance and Ripe.io are two startups in this space. Advanced systems include allergen management features, automated sanitation scheduling, and expected product recall functionalities.

6. Cloud software solutions will drive growth

Respondents from companies with on-premise ERP implementations saw solid growth last year, with their revenue increasing by an average of 1.7% and their profit increasing by an average of 2.7%. Systems on the cloud performed better, with their revenue growing at an average of 3.3% and a 3.9% increase in profits.

Cloud deployments’ greater security and reliability undoubtedly helped facilitate those healthy increases, as maintaining optimal uptime are crucial to getting the most out of your materials, employees, and equipment.

The remote access capabilities and lower up-front costs of cloud setups were likely also key, keeping those businesses that choose this approach agile even in times of disruption and decreasing their financial burdens.

7. Digital wellness and personalization

Digitalization and robotization can personalize food products and empower food industry consumers to take control of their health goals. Moreover, the demand is rapidly growing due to the spread of new diets and low-cost home-testing health diagnostics. Various apps such as Habit and FoodMarble are helping consumers manage their weight and food intolerances.

Solutions like Platejoy offer meal plans tailored to specific diets and cooking habits and integrate nutritional data with health tracking devices. Nestle acquired Mindful Chef to personalize nutrition concepts. Full personalization of individual meals is still a challenge, but startups will pour capital and push for innovation through the 2020s.

Moreover, online platforms in the e-commerce and food industry will gain new adopters as it offers convenience for consumers like successful services like Instacart and Imperfect Produce. Foodservice helmed by companies like Grubhub and Uber Eats will continue to grow, while optimized platforms focused on targeted groups, special diets, and nutritional data insights will occupy space.

While innovators are focused on sustainability, traceability, improving freshness, and eliminating food waste, technology will play a critical role in producing, packaging, and delivering the food we eat.

If supply chains are not well organized, rural farmers are not producing the quality and more convenient foods urban consumers demand, and countries begin importing those products. Technology-based investments in the food industry will continue to deliver on the promise of healthier, more sustainable food systems.

Draup’s sales intelligence platform leverages data from 4,000+ sources to bring insights about global companies, digital trends, and platforms in the food industry. Its ecosystem feature enables you to find specific clients and understand present projects, deals, and needs in real-time, thus giving you an edge over the competition.