HAVI Identifies Five Trends for 2017 Impacting Foodservice Supply Chains

The lynchpins of successful supply chain management are data,
visibility and analytics

DOWNERS GROVE, Ill.–(BUSINESS WIRE)–HAVI, a global company innovating, optimizing and managing supply chains
of leading brands in foodservice, has identified five foodservice
industry trends for 2017 and beyond: Increasingly diversified consumer
demand, an emphasis on homemade, traceability, sustainability, and
technology such as mobile ordering apps.

As consumers, we see the effect these trends are having on stores and
restaurants: Menus and supermarket produce sections feature fresh,
locally-sourced foods; there is greater transparency in food labeling;
ordering kiosks and mobile apps facilitate personalization; and meal kit
delivery services marry consumers’ preference for convenience and
homemade. What we do not always see is how these trends are impacting
operations (back of store) and increasing the complexity of supply
chains.

“Rapidly evolving consumer eating and shopping behaviors continue to
transform the foodservice landscape. Consumers want fresher, healthier
foods and kiosks and mobile apps that allow them to rapidly customize
their orders,” said Scott Saunders, senior vice president, supply chain
integration, HAVI. “Supply chains have to evolve to support these needs
and a critical factor is the ability to use and share data gathered from
point of sale and with suppliers and partners, as well as insights
gathered from current events and weather patterns. The information can
be used to make faster decisions, drive growth and increase efficiencies
in supply chain and operations too.”

Here are the key foodservice trends for 2017 that HAVI has identified
and their impacts on supply chain:

• Consumer preferences are increasingly diversified. The
  food/meal customization trend shows no signs of slowing as consumers
  continue to pursue foods that align with their personal preferences
  and nutritional needs and values (e.g., organic, non-GMO,
  farm-to-table, gluten-free, dairy-free, etc.). Organic food sales in
  the U.S. reached a
  record $43.3 billion in 2015 (source:
  Organic Trade Association). The global gluten-free food market is projected
  to reach $4.89 billion by 2021 (source: Transparency Market
  Research). Expect to see greater transparency
  of supporting claims about where and how foods are processed too.
  To meet increasing consumer demand for variety and personalization in
  their food choices, supply chains will become even more global,
  collaborative and nimble. End-to-end visibility along the supply chain
  will remain crucial not only to provide consumers detail about
  suppliers and production, but also to enable businesses to
  successfully respond to variable demand and optimize inventory levels.
  Similarly, “fix it and forget it” thinking around supply chain network
  optimization will lessen as businesses adopt a more dynamic approach
  to network management that enables them to identify and respond to
  shifts in demand by optimizing their assets and systems for efficiency
  (e.g., sourcing from several regional suppliers to meet demands for
  fresh and reduce costs as opposed to one central supplier, moving
  inventory among stores rather than from distribution centers, etc.).

• Technology will continue to drive modernization of supply
  chains. As consumers continue to shop when and how they want,
  technology is affording brands opportunities to personalize customer
  experiences (e.g., anticipating purchases, making recommendations,
  remembering preferences) as data is collected and analyzed almost
  instantaneously. Businesses must ensure it is not just
  marketing and sales teams who are seeing this information, but that
  suppliers, distributors, retailers and their partners are all
  digitally connected along the supply chain for better visibility,
  increased collaboration and greater transparency as well. Data
  management and analytics tools can help businesses make sense of the
  plethora of data being collected to provide more seamless distribution
  and fulfillment across channels and to identify and prioritize drivers
  of cost and performance. Use of predictive analytics and simulation
  modeling enables more accurate forecasting and demand planning. At the
  same time, Internet of Things (IoT) affords a more precise means of
  tracking assets through the supply chain. Expect greater interest in
  data management technology to optimize supply chains as businesses
  continue to see success with customer-facing tools and realize the
  bottom line impact of integrating demand signals up the supply chain
  to distributors and suppliers for more efficient production and
  movement of products.

• Helping homemade happen. Fresh to-go meals are
  commonplace in supermarkets, fresh foods are increasing in convenience
  stores and meal
  kit delivery services represent a $1.5 billion dollar industry
  (source: Packaged Facts) that is expected to grow, thanks in large
  part to millennials who want a homemade food experience despite
  limited time, supplies and sometimes even meal prep space. Some
  supermarkets are offering
  their own meal kits similar to HelloFresh and Blue Apron at lower
  cost. And, retailers often have an advantage since consumers visit
  their stores regularly, know where things are and trust in their food
  safety. Datassential predicts supermarket prepared food will
  grow 3.8 percent in 2017. “Conventional” ideas of where and how to
  purchase foods are shifting and lines are becoming blurred (e.g.,
  grocers featuring in-store restaurants, big box retailers selling
  groceries online and convenience stores offering fresh foods), but
  having the right data platform and visibility are essential whether
  businesses are dealing with brick and mortar or virtual locations.
• Traceability begets confidence. Traceability is a
  cornerstone of successful supply chain management in any industry, but
  especially in foodservice. Traceability is crucial in helping
  restaurants, farmers and food processors meet FSMA requirements,
  mitigate recalls and food-born illness outbreaks, meet consumer demand
  and support clean eating trends (disclosure of ingredients and their
  origins). Companies will improve traceability through technologies
  that help automate data collection and management (e.g., sensors and
  RFID) and through processes like dynamic network management. Broader
  collaboration across supply chains – enabled by cloud computing – will
  bring a higher degree of transparency and lower cost technology to
  integrate and analyze the data.
• Sustainability and the circular economy. We are seeing
  and will see more promise put into practice related to circular
  economy efforts throughout industries. This is supported not only by
  increased political efforts (such as the UK Labor Party’s recent
  pledge to place sustainability and circular economy efforts at the
  heart of its policies), but also as a by-product of increased efforts
  to tackle issues like paper cups recycling and the reduction of food
  waste. Designing with the end in mind and identifying ways to
  close the loop are increasingly senior management level concerns. As
  more applicable technologies and processes reach the market, companies
  have realized not only the long-term resource and environmental
  impact, but the cost savings and long-term gains toward their bottom
  line and consumer perception of their brand when they adopt a circular
  economy approach to use resources efficiently during production and
  distribution, through use and during reuse and repurpose of products.

HAVI serves the most complex supply chains in foodservice, retail and
convenience around the globe for some of the world’s leading brands,
enabling the most efficient and effective supply chain networks.

About HAVI

HAVI is a global, privately owned company focused on innovating,
optimizing and managing the supply chains of leading brands. Offering
services in supply chain management, packaging, logistics and recycling
and waste, HAVI partners with companies to address challenges big and
small across the supply chain, from commodity to customer. Founded in
1974, HAVI employs more than 10,000 people and serves customers in more
than 100 countries. HAVI’s supply chain services are complemented by the
customer engagement services offered by affiliated company The Marketing
Store. For more information, please visit HAVI.com.

Contacts

Burson-Marsteller
Marybeth Roberts
760-294-6958
Marybeth.roberts@bm.com