When we go out to eat or shop at the supermarket, it can be easy to forget the effort it takes to deliver food from farm to production to distribution and, eventually, to your table. The food supply chain can be volatile for commercial food producers and retailers, especially with supply chain disruptions and workforce challenges in recent years.
As a plastic food packaging manufacturer, we sit in the midst of the food supply chain and understand how complicated these logistics can be. Here, we explore food supply chain trends and challenges in 2024 and share our expertise on how the right packaging decisions can help your products.
Food and Beverage Supply Chain Basics
The specific steps of a food product’s supply chain depend greatly on the type of product. Produce and “farm to table,” locally sourced foods may only require a few steps, from field to distribution and, ultimately, the retailer. Commercial food producers that make prepared foods and beverages have a far more intricate supply chain to manage.
This can include:
- Produce or raw goods
- Warehouse
- Processing, such as baking, mixing, or milling
- Packaging
- Labeling
- Distributor or wholesaler
- Retailer or Consumer
Each step requires important considerations, such as refrigeration, speed of transportation, or proper packaging, to ensure the food stays fresh. In the U.S., regulations like the Sanitary Food Transportation Act of 2005 also require certain sanitary transportation practices to ensure that food carried by road or rail is not altered or unsafe.
“There are a lot of moving parts when it comes to getting food products to consumers safely and without costly losses,” said Lacerta Vice President of Sales and Marketing, Craig Muldrew. “Selecting the right packaging plays a huge role.”
To transport food efficiently, commercial food producers should seek packaging that is cost-effective, but also has the strength to withstand transportation. The packaging must have the right kind of seal to keep food secure from leaks and tampering. Finally, the packaging should stand out with innovative design, clarity, and eye-catching labeling to boost appeal once on the store shelf.
Food Supply Chain Trends
The food supply chain has undergone some recent changes. Here’s a rundown of where we are today and what’s ahead for the food supply chain.
State of the Food Supply Chain Today
Industry watchers noted that 2023 was the year the food and beverage industry began taking a hard look at “eco-labels” on food packaging, and companies struggled to adapt to the rising cost of eggs, just to name a few of the food supply chain trends.
But above all, the food supply chain trend that stuck out was building U.S. resilience and food security. Throughout 2023, the U.S. experienced supply chain strain and inflation across a number of industries, prompting the federal government to take action. This included creating the White House Council on Supply Chain Resilience, and the USDA launching a $196 million program“ to create new and better market opportunities for producers and entrepreneurs.”
As Food Chain Magazine noted, “The U.S. food supply chain is…a system designed for efficiency, catering to a vast and varied demand. However, this very design, which emphasizes efficiency and cost-effectiveness, often at the expense of redundancy and flexibility, has shown its limitations in the face of global disruptions.”
Supply Chain Trends for 2024
To cope with uncertainty in the supply chain more effectively, industry experts say changes and modernization is key. According to the Food Logistics magazine article “State of the Industry: Top 10 Trends to Shape Cold Food Chain in 2024,” new technologies are top of mind for supply chain managers in 2024. Here are some of the trends we’re watching.
Automation and AI: Cloud storage, better networking, and IoT sensors have paved the way for procurement and delivery automation. GPS can automate shipment tracking, while warehousing sensors can help companies know when supplies are running low. Machine learning and artificial intelligence (AI) are poised to take these advancements even further with better analytics that help companies predict demand and optimize transportation routes.
Sustainability: According to research, global food and beverage production causes roughly 34% of global greenhouse gas emissions. Finding greener, cleaner ways to produce food is becoming more of a priority for companies, with many setting sustainability goals and some looking to reduce their carbon footprint with on-shore sourcing and packaging that uses more recycled material.
Food Supply Chain Challenges in 2024
Supply chain challenges are constantly evolving. Here are some we’re keeping an eye on for 2024.
- Theft: According to the Supply Chain Risk Insights Report 2023, food and beverage products have been the most stolen cargo products in both 2022 and early 2023. This theft is largely driven by inflation. Companies should be looking toward adding technology and tools like supply chain tracing and prioritizing due diligence to thwart losses.
- Weather: Everstream Analytics, a company that studies global supply chain risk, notes that extreme weather disrupted supply chains in 2023 and is likely to continue to do so in the years ahead. Drought, floods, and other extreme weather events may happen far away, but can create shortages and impact global prices.
Looking Ahead: Supply Chain Management in the Food Industry
Across the food and beverage supply chain industry, companies are more frequently using data and technology to dig deeper to find creative solutions.
“Companies are looking for efficiencies that get them to market faster without having to greatly increase costs,” said Muldrew. “Technology is a great way to accomplish that goal, both within your own company and by shopping for vendors who are using advanced tech to find their own efficiencies.”
For example, companies that offer life cycle assessments (LCA) on their products can help their customers better understand their climate footprint. This data can then be used to design a greener product, such as less packaging or more locally-sourced materials.
Another key aspect of overcoming future supply chain challenges is agility. Being able to go from ideation to design to a finished product quickly provides companies with a competitive edge. It’s a benefit we offer our customers: rapid speed-to-market at a competitive cost.
Managing Risk and Building Success
Building a stronger supply chain in the coming year will require efficiency today while coming up with innovative solutions for tomorrow. In this fluid part of the food and beverage industry, supply chain challenges seem to be constant. With an agile approach and good vendors by your side, companies can be prepared for the supply chain challenges that lie ahead.
Need help managing packaging supply chains or accelerating speed-to-market? We’d love to show you what we do best. For more information, contact our packaging experts.
