Business Issues Facing Food & Drink
Razor-thin margins are a huge factor in this industry, as consumers are constantly putting price pressure on brands and CP manufacturers. Consumers are always seeking “deals”, whereby their favorite food, beverage, HBA products are “on special”. These promotions may further denigrate already-thin margins.
Complex supply chain
Product recipes typically include many flavors/ingredients, likely sourced from around the world. Consumer specific demand for organic, gluten-free, etc. means CP manufacturers must constantly innovate and produce new products, with new or changed inputs. Distribution channels involve complex warehousing or direct to store (bread, beer, snack foods) approaches. Visibility and accuracy in inventory control is paramount.
Compliance & Consumer Safety & Risk
Product recalls are the “kiss of death”, dreaded by every CP manufacturer. Ensuring safe products for consumption is required by regulations. Good manufacturing practices, and distribution /handling practices are paramount. Having the ability to recall items by lot code is integral.
Managing the Brand / Consumer Marketing
The value of the brand for food, beverage, HBA products is hugely important to gaining market share and establishing the products firmly in the mind of the consumer. Efforts to engage the consumer and hear their thoughts on the brand, and making adjustments to future products or positioning, may be the ticket to future success. CP manufacturers are hugely sensitive to utilize their brands to reflect the values they want the consumer to understand about their products.