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food retailers

What Food Retailers Can Do to Revive the Declining Sales Volume

food retailersFood retailers saw a steady increase in the product volumes sold during the late 90s’ and the early 2000s’, but the growth of food-at-home (FAH) segments have been stalled over the past decade. One of the main reasons for this is when the US customers faced the heat of the recession in 2008, the common trend among households became to eat out less and save money. As a result, the volumes sold by food retailers in the FAH category saw a steady rise. However, as the economy improved, consumers began dining out frequently, consequently, volumes of products sold by companies in the food retail sector took a hit. Although food industry experts at Infiniti Research predict that the sector will continue to undergo the pressure of declining sales over the next few years, there are a few measures to help food retailers resign from flat or negative growth.

By having a clear understanding of the changes and transformations that have driven food-volume growth in the recent past and how those trends will likely evolve, consumer food companies can better prepare for the road ahead. Request a free proposal to know how our food industry experts can help you stay in line with the market changes in the sector.

Ways to spur growth in food retail

Amidst the downbeat forecast relating to the growth patterns, several food retailers have already begun taking an ad-hoc approach for addressing the sluggish FAH growth on the overall business. Measures such as minor product innovations and or reduction in packaging size are some common examples. But to make way for sustainable growth and plan for the challenging years awaiting them, food retailers must take a broader and long-term view of the market. This can be done through bold strategic moves including collaborations or even partnerships.

Re-evaluate product portfolios

There is no doubt that there has been an overall decline in FAH volumes. Despite this, some subcategories have managed to show signs of growth in the recent years. This has been largely driven by the demographic shifts that have taken place in the US over a span of the last 10-15 years. It is vital for food retailers to identify pockets of growth by combining data related to changing consumer attitude and purchasing behavior with the data collected on the changing demographic and economic trends. Furthermore, the lifestyle changes of US consumers are promoting the growth of healthy and organic food products. Therefore, food retailers can concentrate their efforts on these verticals to ensure stable profits. Identifying underperformers is another area of focus for companies in the food retail sector. Divesting in product categories that are rapidly declining in terms of volumes and profits would be advisable.

Is your business experiencing a slump in sales? It can be revived and brought back to track with the right market intelligence solutions to guide your decision-making process. Get in touch with an expert for more insights on how our tailor-made solutions can cater to your specific business challenges.

Supply chain changes to manage volatility

Food retailers often find themselves exposed to commodity price fluctuations and aggressive supply chain transformations are the only solution to overcome such challenges. For instance, a popular coffee chain had purchased its first coffee farm in 2013 to ensure an undisputed supply of coffee beans. Food retailers can also consider joint ventures which will help increase their collective bargaining power and respond better to commodity volatility. Some top food retailers are also trying to develop new and innovative product formulations to better respond to commodity price fluctuations. Such process changes can help to considerably lower costs so that food retail companies can better handle the volatility.

Enter into mutually beneficial partnerships

The challenges faced by both food retailers and food manufacturers over the coming years will be more or less the same. Some of the top retailers are already deeply invested in the private-label and prepared-foods businesses. These categories present opportunities for mutually beneficial partnerships among food companies. Seeking new ways to collaborate with food retailers will be the trait of winning food companies.

Want more insights on our solutions for companies in the food industry?

Achieving 22% Reduction in Unfulfilled Orders for a Food Manufacturing Industry Client – Infiniti’s Demand Forecasting Engagement

Demand Forecasting for a Food Manufacturing Industry

Companies in the food manufacturing industry are facing several challenges such as volatile market demand, quality issues, supply-demand mismatch, and complex manufacturing constraints. In this context, companies in the food manufacturing industry are realizing the importance of leveraging demand forecasting solution to efficiently forecast demand and anticipate sales.

Are you constantly facing conditions of stockouts and overstocks? If yes, Infiniti’s demand forecasting solutions can help. Request a FREE brochure to gain more insights into our services portfolio and learn other benefits of leveraging our demand forecasting solution.

Business Challenge

The client is a food manufacturing company based out of the United States. The client was facing challenges in efficiently planning inventory operations and anticipating product demand. This resulted in huge loses for the company in terms of sales rate and profit margins. The client, therefore, wanted to leverage Infiniti’s expertise in offering demand forecasting solution. With Infiniti’s demand forecasting solution, the food manufacturing company was looking to manage inventory, maximize sales, and tackle production challenges.

Other challenges faced by the food manufacturing industry client were:

Food manufacturing industry challenge 1: Out-of-stock issues

When faced with out-of-stock issues, the food manufacturing industry client had to deal with unplanned production changeovers to keep up the business. This affected their profit margins.

Food manufacturing industry challenge 2: Overstock issues

On the other side, when the company produced extra products, it resulted in overstock and impacted warehouse operations.

Food manufacturing industry challenge 3: Production speed

By leveraging Infiniti’s expertise in offering demand forecasting solution, the client wanted to set up processes according to the estimated demand to speed up the production cycle.

Food manufacturing industry challenge 4: Labor management

With Infiniti’s demand management process, the client wanted to optimize labor management. They also wanted to predict the peak periods and plan their staffing needs more accurately during periods of high product demands.

Solutions Offered and Value Delivered

The initial phase of the demand forecasting process involved gathering all the available qualitative and quantitative data from market research, market testing, and buyer surveys. The experts developed a robust demand forecasting framework to help the client better plan their production, warehousing, and shipping schedules. With Infiniti’s solution, the client was able to understand the supply-demand requirements and the peak periods for their business. This further helped them in better labor management.

With Infiniti’s demand forecasting solution, the food manufacturing industry client was able to make accurate sales predictions and reduce stockouts of products. This even helped them to efficiently manage their resources during peak periods. The food manufacturing industry client was also able to manage supply and demand. The company achieved a 22% reduction in unfulfilled orders. Also, the solution helped the company to meet their customers’ demands and enhance customer experience.

Request a FREE proposal to know how our demand forecasting solutions can help your business to better plan inventory and production processes.

Challenges in the Food Manufacturing Industry

CHALLENGES IN THE FOOD MANUFACTURING INDUSTRYThe rapid transformations in the food manufacturing industry have brought about a host of opportunities for food companies. The rapid transformations have also increased challenges for companies operating in the food industry. Let’s have a look at some of the challenges in the food manufacturing industry.

  • Creating automated processes to adapt with the ever-changing consumer trends
  • Closely monitoring and complying with state and federal regulations on proper food safety and waste disposal
  • Finding skilled labor

CONTACT US to know how our solutions will help you business gain a leading edge in the market.

manufacturing sector

How the US Manufacturing sector Compares to Other Nations

After several years of falling output and diminishing labor force, the industrial manufacturing sector in the United States has been enjoying resurgence over the past couple of years. According to manufacturing industry experts at Infiniti Research, factors including the strengthening economy, better workforce quality, favorable tax policies and regulatory environment, and reduced transportation and energy costs are catalysts for this revival. In order to move forward, it is essential to understand how the manufacturing industries across the world are performing in comparison to that of the U.S. manufacturing industry. In this blog, experts at Infiniti Research provide insights on the manufacturing trends and some of the manufacturing challenges faced by different nations. They also highlight how the US manufacturing sector compares to these nations.

China has one of the strongest manufacturing industries in the world in terms of manufacturing output and the percentage of its national output that is generated. Meanwhile, Poland has the highest percentage of its workforce employed in manufacturing.

United Kingdom

The drop in the value of the British pound against the U.S. dollar and the euro has strengthened the U.K.’s manufacturing sector, thereby facilitating an increased demand overseas for goods from the country. Furthermore, the manufacturing sector holds a strong presence in the country due to its significant role in the export economy. In fact, the manufacturing sector contributes to a good majority of the U.K.’s overall exports. One of the key manufacturing trends in the U.K. is the rising efforts made to capture a significant share of the overseas market. However, the weak pound can impose manufacturing challenges as it may increase the import cost of certain supplies. Furthermore, as Brexit negotiations unfold, the future of manufacturing in the U.K. will experience significant turbulence.

Most companies in the manufacturing industry often cite congestion, logistical issues, or connectivity problems as major barriers to overcome. Are you facing similar issues in your business operations? RFP to learn how our solutions can help you overcome to these predicaments.

Switzerland

The effective governance policy in Switzerland has played a favorable role in shaping its strong manufacturing g sector. As a result of their long-held international neutrality, the country has transparent and fair processes, strong judicial effectiveness, and good economic and political stability. Moreover, Switzerland prioritizes being a strong trading country. The country has also got a top-notch manufacturing talent pool with a large number of highly-skilled workers. The key manufacturing challenges faced by companies in Switzerland include the cost of production and the strong franc value that could hamper exports.

Brazil

The rising corruption in Brazil is one of the primary factors that has plagued the country, resulting in a flailing manufacturing sector. Corruption makes investors reluctant to pour money into business operations due to chances of long-term uncertainty. Consequently, this dampens the chances of long-term investment and business growth. This can have adverse effects on the country’s manufacturing sector. A healthy manufacturing sector is contingent upon transparency in financial transactions, relative certainty in a country’s political environment, and individuals being held accountable for illegal action.

Indonesia

Although a decade ago Indonesia’s manufacturing sector contributed a significant amount of their GDP, Over the years the industry’s contribution has considerably dipped. Indonesia is largely hampered by anemic labor productivity. The sizeable proportion of small and unproductive firms in Indonesia are dragging down the entire sector. To improve their global competitiveness, Indonesia needs to develop its workforce and advance its manufacturing sector. They must focus on incentivizing manufacturing companies with low productivity to either exit the industry or improve their productivity through technology and skilled labor.

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Manufacturing sector in the US

Skilled workforce, advanced technology, and pro-business policies have propelled the growth of the manufacturing sector in the U.S. Manufacturing contributes to over $2 trillion to the United States economy. The labor costs in the United States are significantly higher than in other countries. However, the levels of productivity found in the United States make up for this difference, making the country an attractive location for manufacturing investment. Furthermore, disruptive technologies including additive manufacturing, 3D-printing, robotics, and the utilization of the IoT and Big Data are revolutionizing the U.S. manufacturing sector. This has not only increased levels of productivity but has also made the United States one of the most attractive locations for high-technology manufacturing firms. The United States has, benefited from open trade policies, and in order to attain continued manufacturing growth, the country should avoid tariff wars or overly restricted trade policies.

The gap in labor costs in the United States in comparison to other countries has started to drop and is expected to continue as the cost of industrial robots falls.

Learn more about how manufacturing sector challenges vary from region to region and how our market intelligence solutions can help overcome them.

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