The food and drink industry is central to the global economy. It’s the single largest manufacturing sector in Europe and is worth multi-trillions of dollars in the US: in 2016, Kraft Heinz alone generated second quarter profits of $6.78bn. 

Needless to say, the industry is also incredibly competitive. People value choice, convenience and cost – all of which influence whether or not they decide to buy. To stand out from your competitors, and ensure business prosperity, you need a thorough understanding of the current market trends, challenges and opportunities.

Let’s take a look at what our recent survey of the food and drink sector uncovered, so that you can better prepare your business for what lies ahead in 2017 and beyond.

The current temperature

We spoke to a cross-section of large corporations and SMEs, suppliers and wholesalers, organisations with sub-million revenues and organisations with profits exceeding £100m. At the moment, most of these companies are experiencing a period of positive growth. Overall, food and drink companies are turning larger profits than ever before, with 62 percent claiming they had increased their year-on-year turnover.

That’s not to say there’s no room for improvement. Several operational, logistical and technological problems were highlighted by the survey and, in fact, 27 percent of respondents believe the industry is in a period of decline. 

Biggest challenges to business growth

In a fast-moving market, your products and services need to be consistently enhanced for your company to sustain a competitive offer. Naturally, economic conditions are critical in shaping this and unfortunately the past decade has been rather tumultuous: the global financial crisis, recession, elections and referendums have all led to massive uncertainty. Thirty-three percent of the companies we surveyed identified “general economic downturn” as their biggest challenge. 

Some obstacles, however, are ever-present concerns. It was no surprise to learn that customer acquisition and retention remain major challenges: nearly half (48 percent) of companies believe that finding and retaining new business is their most significant barrier to success.

But the most significant challenge felt by most food and drink companies is one that’s characteristic of our fast-paced, ever-changing world: the adoption of new technologies. Of those surveyed, 56 percent believe that this alone is the biggest obstacle to their business growth. Both poor adoption of new software and badly managed integration with existing systems can lead to severe business disruption and productivity issues.

Biggest opportunities for business growth

While a third of companies view the current economic uncertainty as a serious cause for concern, 37 percent are optimistic that increased access to global markets will lead to greater success and growth in the future. 

This directly impacts customer retention and acquisition. Companies want access to larger, untapped resources of prospective customers, while also maintaining strong relationships with their existing, loyal customers. Respondents demonstrated strong interest in the potential for the right technologies to help them maximise the reach of their business. A total of 61 percent of those surveyed said that new technology innovation can help them improve their advertising, marketing and sales campaigns, allowing them to take full advantage of a broader range of opportunities.

Technology in action

We live and work in the age of Big Data, cloud-based apps, mobile devices and social media. Sixty-five percent of our survey’s respondents said that they already use technology designed for sales, marketing, and customer service teams, including CRM and business intelligence software, and fifty-nine percent said it has a positive impact on their business performance. 

These companies use technology to translate Big Data into actionable insights for their sales, marketing, and business development teams. When put to proper use, the latest technology can help your salespeople learn far more about their customers, making them smarter and enabling them sell to their target audiences far more successfully.

Looking ahead

There is not much that your company can do about political and economic changes. However, to deal with those challenges and opportunities that are well within your control, you need to take decisive action. 

To remain competitive, food and drink companies can’t rest on their laurels; they must build a proactive, customer-centric sales culture, and use technology to shore it up. The next few years will be tricky to navigate, but they’ll also present an abundance of opportunities. We don’t have all the answers, but we know one thing for sure: you won’t be able to take advantage of them if you stay still. 

By Paul Black, CEO, sales-i

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