Food and beverage: Industry faces sustainable...
Food and beverage

Industry faces sustainable change

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"New Work" is changing the industry, pressure on prices and margins in the food industry will continue to increase.
"New Work" is changing the industry, pressure on prices and margins in the food industry will continue to increase.

GERMANY, Berlin/Cologne. The Corona pandemic is accelerating change in the food sector: existing developments such as price and margin pressure are continuing, strategies and business models are coming under scrutiny, trends such as sustainability and digitalization are getting an additional boost, and "New Work" is changing traditional work patterns.

This is the result of the current study "Everything different?" by the Federation of German Food and Drink Industries (BVE), the Employers' Association for Food and Drink e.V. (ANG) and Ebner Stolz, which examined the impact of Corona on the food and beverage industry based on a survey of industry experts from more than 180 companies.

The companies' balance sheets illustrate the pressure to act in the food sector, as the pandemic left deep impacts in some cases last year. It is therefore not surprising that 60% of the 188 survey participants expect a significant decline in sales in 2020. Looking to the future, however, the industry is thoroughly optimistic: 57% of the companies expect the general business situation to improve again or to improve further, and just under four-fifths of the top decision-makers surveyed believe that the pre-crisis sales levels will be reached again by 2022 at the latest.

The economic consequences of the Corona pandemic are also reflected in companies' employment intentions. It is true that 58% of respondents do not expect any changes in 2021. But more than a quarter of the survey participants fear that they will have to reduce staff; in the wholesale/consumer sector, even almost a third. Only 8% plan to hire new staff in the current year.

Looking ahead, the vast majority of survey participants (80%) believe that the pandemic will not lead to disruptive, but relevant or significant changes in the food industry. In particular, 55% of respondents include companies' points of contact with customers, which will increasingly shift to the digital world.

Four Trends will shape the future

According to the experts, four trends in particular - some of them independent of the current situation - will shape the industry in the near future. First and foremost is the pressure on prices and margins, which 84% of the industry experts believe will continue. The respondents gave a similarly high rating to the "New Work" complex, which includes the decline in business trips and the further increase in flexible forms of work and home office. In addition, sustainability and digitalization as cross-industry trends will determine further action in the food sector.

Numerous companies are therefore taking advantage of the crisis to open up new sales channels, to question processes, organizational and management structures, or to press ahead with digitization. These first steps toward sustainable corporate transformation are often accompanied by a far-reaching strategic realignment that includes numerous aspects of the current business model - from redefining target groups, channels and corporate structures to adjusting product ranges, organizational, cost and plant structures.

Source: BVE
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Germany Berlin
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