COVID-19 has impacted food and beverage supply chain operations throughout the world and is changing how companies are planning. The growth of e-commerce is perhaps the most powerful of these changes. Here’s what you need to know to succeed in tomorrow’s changing market.
The sudden expansion of e-commerce due to COVID-19 has created a profound shift in consumer demand. Social distancing mandates and general healthcare practices have caused consumers to increase their online spending habits. In fact, online grocery sales reached $6.6 billion in May for the US. This is up 24% from the previous month. 2020 has seen a 15% increase in online grocery sales from 2019 and this growth is expected to continue.
The rise in e-commerce means supply chains in the food and beverage industry need to adapt to stay ahead. Businesses are transitioning to direct-to-consumer and this will further complicate last-mile deliveries.
In addition, consumers expect total transparency and real-time feedback during the food and beverage transportation process. Consumers are increasingly becoming more concerned with food sourcing and there exists a growing desire for fewer stops from “farm to table”. Increased supply chain visibility and enhanced customer relation protocols will become invaluable.
With millions flocking to online grocers, inventory is sure to expand. With supply chains stretching to accommodate this growth, cutting costs is paramount to a successful system. Route optimization for fleets becomes not only an advantage, but a necessity. Transporting agricultural products in the quickest and most efficient manner reduces costs, increases productivity, and ensures consumer satisfaction.
In addition to route optimization, load optimization is critical in maximizing the quantity of shipped goods. A fleet of load optimized vehicles moves more product in fewer trips. In addition to increased revenue, optimized fleets will have less of an impact on the environment, a concern that is consistently reported as a priority to consumers and companies in the market.
E-commerce also provides an opportunity for markets to become saturated with competing goods. Consumers will become less brand loyal and small businesses will either thrive or suffocate to predatory pricing. This growing and dynamic market will create opportunity for those supply chain management companies that are equipped with the tools and technologies to set them apart from their competition.
The impacts of COVID-19 are here. Like e-commerce, some of them are here to stay and the companies that can adapt to these changes will succeed.
Contact us to learn how PTV Group can help you adapt and succeed in tomorrow’s market.