Successful omni-channeling in food business

Today, in an uncertain world, the food business needs to adapt their characteristics to unlock value by making use of omni-channeling. One of our recent studies showed that, for B2B food production, there are major opportunities to be seized by unlocking the full potential of their existing product range.

Improve the food business model?

In the B2B food market, a majority of firms are manufacturing ingredients for other food manufacturers. The profit is directly related to the global demand. If the demand is higher than global production, the profit can be substantial. If it’s the opposite, the profit is under pressure, simply because the ingredients can be obtained elsewhere. In both analyzes, quality is not included as a distinguishing factor.
Food ingredient manufacturers nowadays understand that value is created if brands and ingredients are known by the end-customers. If this is the case, profit is higher. The next company in the value chain will pay a better price if they are able to sell for a better price to the consumer themselves. A stronger supplier brand reputation adds value. For traditional food ingredient companies, there is the world to win by adding a B2C channel approach and built direct brand awareness and exposure to end consumers. This could be either by introducing their own brand or by making clear to consumers that the consumed final product is made with the help of their reliable and high-quality ingredients.

Develop a digital strategy with omni-channeling

If you are such a company, there is a need to develop a digital strategy to create or increase your brand or product reputation to add value and gain more profit. For this case it is clear that there are more sales channels to add in the market place, so an omni-channel approach is applicable. What is relevant here?

  • Challenge yourself: Challenge your own business model and your traditional way of working. Firms that failed to challenge their incumbent businesses include Saab, Nokia and many others. Incumbent managers and organizations tend to defend their own profit sources and their well-proven (in the past) business models. Continue to ask questions yourself.
  • Work with food tech startups: There will be smarter and faster players in a better position to deliver food products to the consumer market … eating away at the edges of incumbent organizations. With regards to those food tech startups, it may be better to partner than to compete. In other words, a part of the product/service development should be outsourced to a startup.
  • Be customer-centric: To maintain profit margins, the food industry must continue to invest in consumer confidence. According to a large company: "In terms of quality is still a lot to gain by betting on the traceability of products, optimize processes and shortening the chain. Increasing transparency is crucial". You need to build a digital, customer-oriented culture inside the organisation. Not just profits, but profits as a result of a successfully differentiated and long-term sustainable customer strategy. Trust is key in food services, and trust is determined first of all by reputation (brand image and customer experience), which is becoming more digitized. Improving your reputation and satisfaction scores will bring you additional clients at lower costs.
  • Pursue an omni-channel delivery model: Even if omni-channel is a buzzword or not, the fact is that customers are using multiple devices and multiple channels to accomplish a task or search for information over time, and this is especially true when purchasing new products and services. The customer expects the same experience on every device and on every channel, and they expect to be able to perform a seamless handover between devices and channels.
  • Eliminate silos: Eliminate business and staff departments to reduce overhead and inefficiency. Find a way to align objectives across channels and neutralize organizationally driven internal competition. Break the conflicts.
  • Build an open IT architecture: If you want to build your competitiveness on agile web-scale platforms and open up your offering to partners and third parties, you need to completely rethink your IT architecture. Openness and flexibility are the key words. You need an open, programmable, agile architecture to connect your channels and profit from the centralization of information.
  • Embrace cooperation and competition: The time where organisations could run their business in isolation, with very little sharing of cross-industry platforms, is over. A large number of organisations is under a massive attack from internet giants and legacy-free startups. They stimulate the need for systematic, cross-industry alternative digital solutions. This is a new way forward: building new, digital, common platforms, with competition based on customer preferences around branding, customer experience, value propositions and add-ons.

More information: www.ditragroup.com