The Food and Beverage (F&B) industry is inarguably the largest industry in the world, with Nestle, Pepsi and Coca-Cola ranking among the top three food and drink companies on Mother Earth. The F&B space is currently at its zenith, in line with the economic expansion worldwide. At the same time, it is undergoing a transformation by way of customer needs, mergers and acquisitions, and technological advances.
Changing Customer Preferences
The customers are becoming increasingly assertive about their food. The millennial generation is leading the way with bold and adventurous food choices, with this Chippendale café in Sydney being a prime example. The ubiquitous growth of the internet has also spawned a change in eating habits, with customers logging onto the net to search for different foods and eating places, and seek customer reviews. Food home delivery is also evolving, with the growth and spread of food-related apps. People are not only looking for quick, but also healthy eating options. Plant-based foods or veganism is going strong, as consumers become more health-conscious.
Mergers and Acquisitions
Companies are venturing onto the inorganic growth path. They are focusing on expanding their offerings and adding new product lines by merging with or acquiring companies that bring synergies to their existing businesses. Moreover, the cost of such mergers and acquisitions is often lower than spend on research and development of new products.
The consumer products, including food and beverages, are no longer confined to the shelves in grocery stores. The sales on direct-to-consumer websites and third-party e-commerce platforms today account for more than 30% of specialty food and beverage sales. And with Amazon’s acquisition of Whole Foods, the demand for online delivery and subscription food services is set to touch new heights.
Consumers, particularly millennials, are displaying high environmental consciousness. They are showing a marked preference for food producers that respect the ecology, control water consumption and use alternative energy sources. Sustainable measures need not be prohibitively costly as companies can leverage their green systems to avail cost-saving tax credits and carbon credits.
The consumers of today do thorough internet research before purchasing anything, including food and beverages. With a quick internet search, they make informed choices about the varieties and constituents of food available in the market, as also the core values and history of the manufacturing companies. On their part, the food and beverage businesses have jumped onto the digital and social media bandwagon to connect with and provide information to the consumers.
The F&O industry is heading towards a cashless future. Companies and restaurateurs are phasing out cash transactions as this saves time and reduces the risk of handling errors and theft. Debit and credit cards, digital payment platforms such as Paytm and ApplePay, and online payment systems such as Paypal have simplified payments.
To conclude, the F&B industry will never go out of fashion as it caters to the basic needs of humankind. However, it still needs to constantly adapt itself to the changing socio-cultural-technological dynamics.