The food and beverage industry is enormous, including subindustries like grocery, restaurants, bars, catering, and more. The industry continues to evolve and adapt despite frequently changing consumer preferences and new, complex challenges. So, what’s currently affecting those in food and beverage? In this blog, we’re going to dive into some of the latest trends in the food and beverage industry.
TRENDS IN THE FOOD AND BEVERAGE INDUSTRY
LABOR SHORTAGES IN FOODSERVICE
ARTIFICIAL INTELLIGENCE & AUTOMATION
CONTINUED COLD CHAIN GROWTH
One of the well-known trends in the food and beverage industry is the continued growth of cold chains. Recently, a Grand View Research study shows that the cold chain market was estimated at USD $330,680 billion in 2023. Furthermore, it’s estimated to grow at a Compound Annual Growth Rate (CAGR) of 14.8 percent from 2024 to 2030.
Recently, there’s been an increased demand for temperature-controlled pharmaceutical logistics (think vaccines and biologics), rising demand for better food quality, including more fresh and frozen foods, and a surging need to reduce food waste. All this is anticipated to drive the market’s growth.
In light of the pandemic, the risks of COVID-19 have made consumers more interested in healthier, less processed foods that will boost their immune systems. However, less processed foods mean more food products that will need temperature control.
Additionally, the frozen food sector looks to be growing. Besides filling home freezers, frozen foods are growing in restaurants. Restaurants are also providing new menu items for the frozen grocery aisle. In an American Frozen Food Institute report, 72 percent of frozen food consumers said they combine frozen and fresh ingredients in their meals.
Comparatively, shippers are also using more cold chain services to preserve the shelf life of their products, even when temperature-controlled transportation isn’t needed.
SUSTAINABILITY
Growing climate issues are making sustainability a common trend in almost all industries. Consumers are taking notice of the sustainable practices of companies. From ethical sourcing, carbon neutrality, to eco-friendly packaging, consumers want the brands they buy from to be sustainable. Additionally, food waste is a major contributor to greenhouse gas emissions globally, contributing to cold chain issues. This makes sustainability one of the top trends in the food and beverage industry.
Consumers Care About Sustainability
One way consumers can show their support for the environment is by choosing to purchase from sustainable brands. Consumers have shown they’re willing to pay more and be loyal to brands that invest in their sustainability efforts. In a survey by YouGov, more than half of consumers said they would be willing to pay up to 10 percent more on sustainable versions of regular packaged food and drinks. In another consumer survey, 78 percent of respondents agree that sustainability is import, with 63 percent stating they have adopted greener buying habits.
Food Waste Prevention
In fact, an S&P Global Ratings report says food waste contributes to 10 percent of emissions and that $1 trillion of food is wasted each year. Similarly, according to the U.S. Environmental Protection Agency (EPA), between 73 to 152 million metric tons of food get wasted each year in the U.S. The most wasted foods are fruits and vegetables, followed by dairy and eggs, with over half of all waste occurring in households and restaurants. In addition, the food processing sector generates 34 million metric tons of food waste per year. And over the past decade, the total U.S. food waste has increased by 12 percent to 14 percent.
To put it differently, the EPA said halving food waste in the U.S. would save 3.2 trillion gallons of water, 640 million pounds of fertilizer, 262 billion kilowatt-hours of energy, and 92 million metric ton equivalents of carbon dioxide. According to the Agency, reducing the waste of meats, cereals, and fresh fruits and vegetables would have the most significant impact.
Due to this growing issue, governments and businesses have been working hard to improve sustainability efforts. In July 2021, the Zero Food Waste Act was introduced to provide grants to businesses that significantly reduce their food waste. Additionally, in November 2021, the Food Donation Improvement Act was introduced to lower food waste by making it easier for companies to donate food instead of throwing it out.
Cold chain improvements have seen growing importance even outside the food and beverage industry. One example is UPS Healthcare developing a system and opening facilities to move medicines safely. Part of their plan includes using reusable cold chain packaging. In addition, Amazon is working on insulation packaging to reduce material waste and replace 735,000 pounds of plastic film, 3.15 million pounds of cotton fiber, and 15 million pounds of non-recyclable plastic.
LABOR SHORTAGES In Foodservice
Labor shortages are common among other industries, making this another relatable trend in the food and beverage industry. As a result, hiring workers in the U.S. is becoming near impossible. According to a recent market report, labor shortages are a top concern for 23 percent of food and beverage businesses. The most difficult positions to fill look to be those in the restaurant and foodservice sectors. It’s not just the hiring of new workers, but retaining them as well.
Workers are leaving the industry due to a combination of burnout, low wages, and a desire for better work-life balance. Because of this, restaurants and foodservice companies have had to reduce their hours or limit their menu, while consumers have felt it in longer wait times and less personalized service. With good customer experiences being paramount to a company’s success, resolving this issue is critical.
For this reason, advanced technology can help remove some redundant tasks and help supplement amidst labor shortages. For example, those in the bar sector are being introduced to self-pour technology, which uses RFID tracking and allows customers to pour their own beverages. .
CONSUMERS ARE MORE COMPLEX
Over the years, consumers and their choices in food and beverage and their preferred shopping habits, have become more complex. Because of this, there is a greater assortment of products than ever, with more items requiring temperature control as consumers move away from processed foods and look for fresher, healthier items. Consequently, the supply chain for grocery continues to evolve as the message from consumers is clear. They want what they want, when they want it, where they want it, and expect businesses to respond to their demands.
Continued Decline of In-Person Shopping
In speaking to consumer shopping preferences, it looks like online grocery shopping, food delivery, and food subscription boxes are here to stay. Many consumers prefer the option to receive food and beverage products at their door. For instance, in recent a study by Drive Research, the use of grocery delivery services in 2024 have risen 56 percent compared to 2022. Additionally, the use of grocery curbside or pickup in 2024 have risen 100 percent compared to 2022, further showing the decline of in-person shopping for food and beverage items.
Cost of Food and Beverage Products a Large Concern
Additionally, inflation and rising costs for everyday items, including food and beverages, have consumers rethinking how much and what brands they buy. For example, a recent study showed 54 percent of respondents stating they’ve reduced how much, and unfortunately, 20 percent said they were skipping meals to save money on food. Data from another survey found that 43 percent of consumers are cooking dishes with less meat to save on grocery costs. Others are choosing to purchase cheaper cuts of meat.
Private label brands continue to see growth as shoppers look to save money whenever possible. In fact, according to Numerator, private label brands hold almost a quarter of sales in the grocery sector. The Private Label Manufacturers Association shows that private label sales saw 2.5 percent growth compared to a decline of 0.8 percent by national brands in 2024.
Taste and Experience is a Must
Consumers want to feel good about what they eat. They want nutritious options that alight with their dietary preferences or health goals. In a survey but the International Food Information Council, 54 percent of consumers consider the healthfulness of food in their purchasing decision. Yet, even with the health benefits, they still want their products to taste good, as Datassential shared 35 percent of them purchase items that sound both delicious and healthy.
Consumers are interested in trends like unprocessed foods, natural ingredients, anti-inflammatory, and hydration. Alcohol-free and non-alcoholic beverages are also a rapidly growing trend, with 2 in 5 consumers abstaining from drinking alcohol.
Consumers generally want a positive experience with food and beverage products. While it’s fuel for the body, it can also serve as a source of community, entertainment, and more. In one study, 53 percent of consumers see experiences as essential to their personal lives, especially among the younger generations since the pandemic. They’re interested in trying to tastes and spices, products that bring a sense of nostalgia, or food and beverages that tie in with a story, as shown by the recent increase in pop-up restaurants and bars.
supply chain Challenges
Since the pandemic, supply chains have been seen more of the limelight. As shown by rising costs faced by consumers, food and beverage supply chains have been challenged by shortages of raw materials, disruptions like strikes or a bridge collapse, and a growing demand by consumers for transparency and speed.
Consumers are also becoming more interested in knowing where the products they buy come from. According to a study by IBM, nearly 70 percent of consumers want to see a brand’s sourcing practices. They want to know how the products they buy were manufactured. They’re looking for companies who show concern to how their manufacturing affects the planet’s life span and how their product is raised or grown. Consumers want to feel like the products they choose to buy will make a difference.
According to a Mckinsey report, food and beverage supply chains see supply chain disruption roughly once every three years. A 2023 risk report shows that supply chain executives are concerned about disruptions from climate change, environmental factors, and geopolitical conflicts. Another risk report shows that 73 percent of companies experienced higher supply chain losses within that past two years. Because of this, building supply chain resiliency is a huge trend for food and beverage companies.
ARTIFICIAL INTELLIGENCE & AUTOMATION
Artificial intelligence (AI) is a buzzword across all industries, but how could it affect food and beverage? One way is through providing clearer insights into shopper preferences, helping companies better market to them to grow brand loyalty. It can help with supply chain optimization, helping businesses better understand consumer demand and optimize production planning and management, reduce overstocking, and minimize waste. Some companies, like Campbell Soup Co., are using AI to help with product development, tracking data and discovering what its customers want next.
According to WifiTalents, 62 percent of food and beverage executives believe AI will have a significant impact on their industry within the next five years. With the uses for AI in the food and beverage industry being so extensive, it will be interesting to see how companies make use of it.
There’s also a lot to be talked about in AI and automation for the customer experience. Companies are looking into AI-driven customer service opportunities and ways to streamline customer interactions. You see a lot of this in the restaurant industry with the use of table side tablets, interactive menus, and mobile ordering and payment. AI is used in mobile apps to personalize menus and promotions based on customer preferences.
Growing Cold Storage Demand
The demand for refrigerated warehouses is continuing to soar to new heights. A report from Skyquest forecasts the U.S. cold storage market to increase with a compound annual growth rate of 13.5 percent through 2031, expecting to reach a value of $118.8 billion.
Temperature-controlled storage is critical to many sectors, from grocery to pharmaceutical companies. The growing demand for cold storage facilities comes the adoption of automation and technology, the popularity of ecommerce and demand for faster delivery, as well as online grocery platforms. There’s also a thriving demand for convenience foods – those that are usually chilled but ready to eat with little to no preparation.
STAY AHEAD OF TRENDS IN THE FOOD & BEVERAGE INDUSTRY
No matter the trends in the food and beverage industry, having a logistics resource, consultant, or expert is one way to stay ahead. Whatever phrase you want to use but ultimately, have support on your side for any complex situation. This is where a third-party logistics company (3PL), such as Trinity Logistics, can come in. We can help you find creative solutions to your logistics challenges.
Now, you’re likely wondering, “why work with Trinity Logistics?” For one, we’ve been serving cold chains for over 45 years! Whether you have a complex challenge or just need help with one shipment, we have the experience and quality carrier relationships to meet your needs.
You can also count on us to stay knowledgeable on what’s going on in your industry so you can stay updated too. We know that even in times of supply chain disruption, your industry doesn’t stop, so neither do we.
And lastly, what makes Trinity unique from other 3PLs and what our customers praise the most is our exceptional People-Centric service. We’re a company built on a culture of family and servant leadership, and that culture shines through in our service to you. It’s our care, compassion, and communication that you’ll notice and appreciate.
If you’re ready to have Trinity Logistics on your side for logistics support and expertise, no matter the industry trends, then let’s get connected.
DISCOVER HOW WORKING WITH TRINITY CAN BENEFIT YOUR COMPANY STAY UP-TO-DATE VIA OUR EMAILMost of us over the age of 25 can remember when the World Wide Web made its debut. We remember the “beep-boop” sound of dial-up and the big chunky computers that were as wide as a television set in the 1990’s. It’s been almost 30 years since the dawn of the Internet. It’s mystifying to look at the impact it still has on our everyday lives. Because of the Internet, e-commerce was born, and the need for flatbed shipping has increased.
The Beginning of ECommerce
Over time, ecommerce has taken the baton from traditional brick-and-mortar stores, leaving many big-box store retailers high and dry. Since Amazon Prime’s arrival in 2005, online shopping has exploded in the marketplace. The ease and convenience of it have forced many retailers to develop a strong online presence or risk closing their doors for good.
COVID-19 Creates Rapid Growth
Due to health concerns and social distancing practices, COVID-19 rapidly escalated the use of ecommerce. Total online spending in May 2020 was up 77 percent year-over-year (YOY), according to a report on online spending released in June by Adobe. In that report, Vivek Pandya, Adobe’s Digital Insights Manager, states that it would have typically taken 4-6 years to see the level of growth in online shopping that was seen then. Contactless online ordering helped individuals attempt to limit their exposure to the virus by shopping from home, so it’s easy to see why those reported numbers were so high.
Since the pandemic, the changes in the ways consumers shop have remained. While in-person shopping has increased compared to then, it still lacks in the amount of foot traffic that was received previously. Consumers continue to like the ease of online shopping, and with fewer in-person shoppers, companies are investing less in their brick-and-mortar locations, which has only made people less likely to want to shop in person. In fact, it’s estimated that 40,000 to 50,000 retail stores will close in the next five years, according to the UBS investment bank.
Ecommerce continues to experience growth, with 22 percent of retail sales being online in 2023, the largest U.S. ecommerce sales percentage to date, according to the U.S. Department of Commerce. As e-commerce growth carries on, it’s created a growing need for companies to expand their inventory and improve their ability to distribute their products. What used to be a problem of “too much” storage space for companies before the pandemic has quickly turned into a necessity in today’s time.
The Need for Storage Space
As online distributors continue to see growth, their need for storage space has grown as well. Prior to Covid-19, one or two warehouses could keep a medium-sized company running efficiently. Now, more space is needed to keep up with the increasing demand of companies. Having more than one distribution center can be a huge benefit to a company’s ability to stay successful these days.
This all trickles down to the construction industry. As demand grows for new or renovated warehousing, the need for building materials to meet that demand has also increased.
How ECommerce Growth Affects Flatbed Shipping
Flatbed shipping has always been a leading mode of transportation for industrial freight. Lumber, stone, racking, and other building materials travel best on an open trailer due to their odd dimensions and additional weight requirements.
Looking for an extensive guide to keep on hand for your over-dimensional shipping?
Download our FREE guide!Usually, flatbed shipping sees an increase in volume in the summer months. Construction companies take advantage of the warmer weather, which is most suitable for outdoor construction work. During this peak shipping flatbed season, it’s not unusual to see tightened capacity and higher freight rates, but any added demand for warehousing can add to that, making securing a flatbed carrier more difficult.
Strong Relationships Help
Having a relationship with a third-party logistics company (3PL can be a benefit to those who coordinate freight to be delivered to a job site. Typically, job site freight is very hands-on and has a perpetual knack for being time-sensitive. Installation crews are on-site to receive and install the material scheduled to be delivered. Even the slightest delay can cause significant ramifications to the completion of the construction project. Having a strong relationship with a 3PL can help companies mitigate risk, reduce costs, and provide peace of mind to those who are coordinating the freight.
Be Ready for Anything
It appears online shopping is here for the long-haul and whether it’s causing you to expand your warehousing or not a 3PL like Trinity Logistics can help you be prepared for any changes that may come your way. With Trinity, you’ll gain a Team of experts that can help you optimize your supply chain and arrange shipping for various of transportation modes, including flatbed, while offering end-to-end visibility of your shipments. No matter what changes the future brings, you can stay one step ahead when you choose to have Trinity Logistics by your side.
The economic and operational effects of COVID-19 on the trucking industry have been challenging and devastating. Many have warned the true storm for the trucking sector has yet to arrive, and the effects witnessed to date have been warning signs of what’s yet to come.
Not all operations have been equally affected, but tough times are on the horizon for some trucking companies. The early impacts of the pandemic were at ports, as containers shipped in from China were affected there first.
As lockdowns happened and with events canceled, companies that specialize in moving concert and trade show exhibit items were affected the most. Some fleets dedicated to hauling equipment for events have noted that economic hardship. Others in similar sectors have reported equal occurrences.
THE HARDEST-HIT SECTORS
The food industry has been especially hit hard. Many restaurants and bars have had to close, except for takeout outlets that have stayed afloat. This has left food-service trucks with dwindling sources of income. The International Foodservice Distributors Association predicts the industry will lose $24 billion during the last three months of 2020as the pandemic closes eateries, hotels, and schools.
Another group affected are those who service the automotive industry. Many manufacturers have enacted temporary shutdowns, which affects fleets in more than just their shipments. This limits their supply of new parts for trucks when they need repairs.
Those servicing some of the retail sectors may also struggle. Malls and retail stores are closing at an astounding rate worldwide, slashing demand for the transportation of various goods. While online shopping and delivery could offset the losses faced by trucking companies to a degree, it will take a while for the playing field to level.
THE SECTORS BENEFITING FROM THE PANDEMIC
Of course, fleets who haul sanitizer, toilet paper, groceries, and home office supplies are staying exceptionally busy. Some fleets are even adding more freight to their rosters to keep their trucks running, while others are expanding their operations to keep up with demand.
DAT Solutions has noted that urgent retail orders continue to drive up spot rates for reefer and van equipment. The company says nervous shoppers buy as much as they can for every trip, and retailers are relying more on spot market providers to restock shelves rapidly when other truckers face delays.
Now that a significant part of the world’s population is home, families are also cooking more often. This means that freight demand for grocery and food-related truckers will continue to soar, creating a new market trend many can capitalize on if they’re quick on the uptake.
As retail takes a downward turn, an increasing number of people are shopping online and relying on curbside pickups. Amazon has reportedly been so busy that it’s hired another 100,000 staff members to keep up, while Walmart has enlisted the help of another 150,000 employees.
PREPARING FOR THE UPCOMING RECESSION
While many experts are hailing these changes as a ‘new normal’, it’s important to remember that a recession is looming. If countries put in place secondary lockdowns as the second wave of COVID-19 hits, freight won’t be flowing at the same time. The trucking industry will eventually recover if this proves to be the case, but the time frame for this recovery will depend on how long the virus takes to peak, and how long the recession will last.
WHAT TRUCKING COMPANIES CAN DO
What can fleets do to counteract the potential effects of a second wave? That will depend on the sectors they operate in. Trucking industry professionals have warned some companies may struggle to keep their drivers busy while others will be rushed off their feet in the face of an upswing in demand.
Those in the grocery and refrigerated goods sectors aren’t likely to feel the pinch, even once the recession has arrived. Those in the general freight space may have fewer tons, fewer route miles, and fewer loads to haul. It’s realistic to expect that some carriers will not survive.
In the meantime, trucking companies should work to keep their drivers busy in any way they can. They should remain financially prudent and cut costs where necessary without compromising on safety or service quality. On the other end of the pandemic, there will be many companies that will need to restock their supply chains and they’ll need partners to help them achieve this.
If you’re a trucking company owner or associated professional, get out there, network, talk to your customers and determine what their needs will be once the outbreak has died down. Even if business is not booming right now, you need to find a way to keep drivers in the short term so that your company does not emerge with under-used equipment and a lack of drivers.
Keep your business alive and kicking and be prepared for a decline in business and revenues. We are sitting on the precipice of some major changes in both the world’s economy and the trucking sector. It will be possible to survive, but only with the right approach and strategic partnerships.
FIND A GREAT PARTNER IN TRINITYGuest Author: Lori Dodson