Industry X.0: Driving transformation in the food & beverage industry

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February 19, 2018
Industry X.0: Driving transformation in the food & beverage industry
By: Justin Lamb

At Accenture, we believe that the scale and pace of change in the manufacturing industries demands a new industrial framework. We’re calling this framework Industry X.0; it’s a blueprint for rapid and flexible technological adoption, today and in the future, to help manufacturers thrive.

The Food & Beverage industry is transforming rapidly. Due to changing consumer behaviours and expectations, along with other key factors such as regulatory compliance, Food & Beverage companies are increasingly having to review their product portfolios and, in many cases, rebuild them. I believe that companies that embrace Industry X.0 business models and operational processes will be best placed to meet the challenges of today’s Food & Beverage industry. But what exactly are these challenges?

For me, there are five key trends that every Food & Beverage company needs to have on its radar:

  • Health and nutrition: Today’s consumers demand healthy and nutritious food and drink; based on natural and simple ingredients. Manufacturers are therefore having to reformulate their products; replacing artificial colours, flavours, and preservatives with pure ingredients while also reducing sugars, fats, and sodium and steering away from GMOs, HFCS, and growth hormones. Concurrently, consumers increasingly expect easy-to-understand labels on packaging that tells them exactly what they are about to consume.

  • Safety, trust and sustainability: Consumers are also demanding new levels of transparency into manufacturing and the supply chain. Lacking the trust that is often placed in smaller, local producers, large manufacturers are having to ramp up their efforts around ‘track & trace’ and data transparency to provide consumers with the information on sourcing, safety and sustainability they require to make more informed choices.

  • Taste experiences: A third area where consumers are driving change comes from growing demand for new taste experiences that are memorable and differentiated. Consumers are also looking for more authentic cultural flavours delivering comfort, nostalgia and familiarity. Manufacturers are under more pressure than ever to innovate rapidly; bringing new flavours and food trends into their production runs to keep their customer base interested and engaged.

  • Regulatory complexity: Large Food & Beverage manufacturers operating globally are finding that their compliance function is often a bottleneck. This is because the task of manually checking that ingredients and products are compliant with all existing and emerging regulations in all relevant jurisdictions is a huge task. Manufacturers are therefore in need of new ways of automating compliance in real-time.

  • Supply chain simplification: Manufacturers are also looking to reduce costs and drive efficiencies through leaner and more effective manufacturing processes. This includes a move towards more modular product runs and a simplification of the raw materials used in producing products and packaging. Gaining insight into where best to make these changes is key to success.

These challenges all have one thing in common: they can be met using transformational digital tools. This is where the Industry X.0 framework comes into play: it shows manufacturers how to employ the right mix of digital technologies to thrive in the modern Food & Drink industry.

In fact, according to new research from Accenture, the Food & Beverage industry stands to unlock an impressive £55.8 billion in value by harnessing five key technologies: machine learning, blockchain, digital twin, autonomous vehicles and autonomous robots. These are key enablers for the insights-centric, agile manufacturing process Industry X.0 enables.

Industry X.0. is an action plan for Food & Beverage companies that are looking to succeed in today’s market. By embracing the Industry X.0 framework, manufacturers will be able to completely reinvent their operating models, production and value chains, and in the process become better at profiting from technological change.

Please tune in again for my next blog on this topic, where I’ll take a deeper dive into the practicalities of Industry X.0, and look at what Food & Beverage companies can do to meet the most pressing of the five challenges listed above: health and nutrition.

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