Big data in Food Manufacturing
Food producers, retailers, and restaurants are using data analytics to better understand customer needs and uncover important food industry market trends.
The food industry is one of the world's largest and most important business sectors. The field encompasses everything from producers and shipping companies to retailers and restaurants.
Food is nothing less than an essential part of life and a major global economic force. Therefore, it makes perfect sense for the food industry to follow the path already taken by many financial and marketing firms and use sophisticated analytics tools and methods to better understand consumers and uncover emerging market trends.
Big data-driven analytics supports food industry businesses with critical decision-making capabilities in the areas of pricing, product promotion, product development, and demand forecasting. Benefits include improved product innovation, greater sales effectiveness, enhanced margins and profitability levels, extended customer reach, increased marketing ROI, and greater customer satisfaction and loyalty.
"To stay competitive in the industry, food and beverage companies should highly consider implementing data analytics tools," says Lori Mitchell-Keller, global general manager of consumer industries for analytics technology provider SAP. "Companies that have unbiased, analytical insight into their consumers and overall operations will have a serious advantage over their competitors."
Viewing the big picture
Data analytics offers another important benefit: the ability to reveal clues to larger and potentially significant market trends. The recent spike in avocado prices provides a prime example of how analytics can help retailers and restaurants manage costs, says Nic Smith, SAP's global vice president of product marketing for cloud analytics. Over the past few years, the U.S. consumption of avocados has significantly spiked. Meanwhile, retailers and restaurants have seen avocado prices more than double over the past 12 months. "With the ability to review recent purchase history and consumer sentiment, businesses can predict consumer demands well in advance," Smith says.
Smith notes that as soon as consumers began purchasing avocados in much larger quantities, restaurants with access to that data should have incorporated more avocado-based options on their menus. "Grocers should have stocked up and provided a range based on price and variety, and producers should have invested in methods to ensure a constant flow of fresh, ripe avocados year-round," Smith says. "By interpreting this trend with analytics, restaurants, grocers, and retailers could have experienced a significant boom in business, without the stress of not being prepared for the increased demand for avocados."
A priceless tool: Vision
Bedford notes that analytics gives food industry businesses a priceless tool: vision. "By analyzing data, you're in a much better position to make sound predictions about customer preferences and behavior," he says. "If you can tap into customer sentiment and offer products and services before they even realize they need or want it, you’re as close to bulletproof as any company can be."
Smith agrees. "Soon, all successful businesses will rely on analytics to inform company decisions around production, sales, and marketing," he says. "While larger companies were the first to invest in the technology, smaller food companies are now following suit, as they see the value of having access to data analytics at a moment's notice."
Big data in the food industry: Lessons for leaders
Use data analytics tools to understand customer preferences in order to stock or serve the right products at the right time.
Carefully analyze collected data to uncover and address trends that may soon help or hurt the business.
Look for and evaluate promising new data analytics technologies and methods to keep pace with competitors and customer demands.
Allow managers to access data and make fast and decisive changes based on the insights they receive.