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Challenges of the Food and Beverage Industry

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Optimizing production levels while increasing output levels and maintaining safety for both the employee and end consumer are just a few key examples of the growing challenges faced by food and beverage plants as the industry becomes more globally focused. Below, we’ll discuss some of these issues in detail, along with the challenges the industry faces in today’s economy.


Optimizing Production Levels to Increase Output

With global population increases of approximately 100 million people a year, the demand for food and beverage products is soaring. There is also a great demand for higher value food products. However, the supply to meet this demand is slowing, due to increases in production costs. This puts manufacturers under greater pressure to lower the costs in the food and beverage supply chain at a time when it is becoming ever more complex.

In order to optimize production levels, many companies in the industry have moved away from paper-based operation environments to using automation technology in key areas.  Electronic data-entry systems allow management to measure performance more accurately and make better supply chain decisions. By using real-time production data, workers know whether they are ahead of or behind schedule.


Increased Safety Regulations

Food safety regulations such as the FDA Food Safety Modernization Act (FSMA), apply to all food companies regardless of size.  Small and medium plants are held to same standards as large companies, but have significantly lower resources to address safety standards. Safety lapses can be devastating to brands with non-compliance factors ranging from pricey recalls to plant shutdown.

As the industry is becoming more globalized, there’s also a move to globalize the Food and Drug Administration since its tasks are not only domestic.  This creates a strong interest in global trade and risk issues.  Importers face new regulations aimed at reducing terrorism and counterfeit products.


The Economic Impact

The current state of the economy not only affects industry input costs, it also has an effect on consumer buying habits.  During the economic downturn, when people stopped going out to eat, they first turned to branded food and beverage items.  As the economy worsened, consumers then turned to private label products. Once the switch is made, it’s very hard to get them back without dropping prices.  When the predictability of commodity costs is low, the multi-month moving average used by the industry doesn’t allow for accurate financial planning.

Now that the recession is ending, a new emphasis on profitability and brand repositioning is emerging.  Companies that survived by being reactive to the economy, now have to be proactive in order to hold market share.

 

Speaking of being proactive, we at MAC Incorporated understand the crucial role human beings play in the rate and quality of production output as well as the overall efficiency of asset utilization.  Our candidate base consists of top leaders in engineering, maintenance, and operations management fields. Contact us today to see how we can get to work for you.

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