The food & drink industry is immense, diverse, and highly consequential. It comprises a vast network of players—from farm to factory to fork. With globalization, these networks and the supply chains by which they deliver value have become increasingly complex.
This complexity has served to help meet rising and varied demands. However, it has also given rise to opaque, unwieldy, and interdependent systems that make it challenging to adapt in the event of disruption. With the onset of the pandemic, these vulnerabilities within many global food & drink supply chains have been exposed. The cascading effects of the past two years have, like in many industries, put additional pressure on food & drink organizations—many of which are already navigating evolving consumer tastes and behaviors and the need to operate more sustainably.
These forces drive innovation and new approaches to value chains in the industry. And rather than thinking narrowly in terms of new products, convenient formats, and customer experience, today’s food & drink industry is increasingly acknowledging the complexity—and myriad opportunities and challenges—that exist in today's global food systems.
In this blog, we’ll present some of the forces shaping the future of the food & drink industry, along with the key trends, game-changing technologies, and practical industry applications, highlighting how organizations are finding and leveraging innovative opportunities.
Forces Shaping the Future of the Food & Drink Industry
1. Global Food Security
Despite global commitments to achieve zero hunger (SDG 2), more than 30% of the world’s population now faces moderate or severe food insecurity. This figure has risen gradually in the last several years due to climate change, economic downturns, and conflict. The pandemic further exacerbated the issue of food insecurity, exposing weaknesses in food systems and supply chains. Unable to keep pace with growing populations and food demands, existing food systems must undergo transformation. This will require new technologies, corporate governance, and diplomacy to ensure equitable and affordable access to healthy, sustainable diets.
Meeting rising demands and achieving food security for all will require transformation of these systems. This starts with sustainable farm management and land use. Precision Agriculture will help optimize production practices and improve yields by employing drones, IoT, automation, and predictive analytics. Integrating other Future Farming solutions like regenerative agriculture, hydroculture, pasture and crop rotation, and advanced seed coatings will also be essential to systems-level responses.
Inspiration: Montana State University researchers are collaborating with farmers across 15 states to improve the efficiency of their operations using technologies like yield monitors, protein sensors, and AI/ML platforms. The project will develop a user-friendly system for on-farm experimentation, data collection, and analysis, alongside a framework to help farmers make the most cost-effective and ecologically sustainable management decisions to support food security.
2. The Wellness Movement
The idea of food as medicine has grown alongside greater awareness and adoption of integrative and holistic approaches to health. The global market for healthier, less processed food & drink will continue to grow as more consumers take control over their health. Meanwhile, the pandemic triggered a rise in demand for products and supplements labeled with “immune support.” There is persistent interest in herbal, CBD, and other functional, natural ingredients that tout therapeutic, cognitive, or anti-aging benefits. However, these so-called nutraceuticals are largely unregulated in many countries, and consumers are increasingly scrutinizing products and seeking Evidence-Based Value.
The pursuit of Pure Goodness—emphasizing minimal additives and preservatives—and the demand for safe and superior quality food will drive further development of Antimicrobial Packaging technology. This “active packaging” reduces the need for added chemical preservatives and maintains the nutritional profile of food products, including the macronutrient, vitamin, and mineral content.
Inspiration: Scientists from Harvard T.H. Chan School of Public Health and Nanyang Technological University in Singapore have developed a new biodegradable, antimicrobial food packaging material that can help combat both food and packaging waste. Produced from corn protein, starch, and other biopolymers, it contains natural antimicrobial compounds like thyme oil and citric acid that can extend the shelf-life of fresh fruit by up to three days.
3. Planetary Health
A new definition of healthy eating is emerging to encompass more than just nourishment. The impact of the food & drink industry on planetary health has come into stark focus. As a result, more consumers are adopting climate-friendly diets that incorporate low-carbon, local, and seasonal foods. There is a growing demand for minimizing food waste and supply chain transparency to validate claims of sustainable, ethical production. These shifts require examination and optimization of the entire value chain—from precision and regenerative agricultural practices to reducing food and packaging waste.
Biomanufacturing and 3D Printing are promising alternative production methods for a more sustainable food & drink industry. As consumer preferences move towards Sustainable Nourishment, the market for meat alternatives—e.g., plant- and insect-based proteins and "lab-grown" meat—grows. However, continued investment into improving and scaling these technologies is needed to reduce price and enhance palatability for consumers.
At the same time, many consumers are inundated with (sometimes conflicting) information on environmentally and socially responsible choices. This has led to the rise of Easy Ethics and brands empowering their customers through accurate information, ethical options, supply chain visibility, and accessible channels for offering input on key issues. An example of Easy Ethics is carbon labeling on food & drink items—in line with the trend Carbon as a Currency.
Inspiration: Chemical company DIC is partnering with Debut Biotech to use the startup's cell-free biomanufacturing platform to create natural pigments for food colorants and cosmetics. The ingredients are intended to replace synthetic petroleum-derived colorants amid growing consumer demand for more sustainable ingredients that are natural and biodegradable.
Much like retail, the food & drink industry experienced massive disruption due to the pandemic. Restaurants, supermarkets, and food & drink manufacturers rushed to meet their customers online with e-commerce solutions and on-demand (contactless) delivery. Lockdown periods accelerated the rollout and adoption of these solutions. While some habits are likely to revert to pre-pandemic “normalcy,” the online presence of the food & drink industry and demand for direct-to-consumer services will have permanence. This will require infusing technology into existing distribution and delivery models to streamline operations and elevate the customer experience.
The pandemic has made Rebuilding Retail a priority for many brick-and-mortar outlets in the industry. Businesses must consider new distribution and retail strategies that address the rising dominance of e-commerce and direct-to-consumer services. Even as COVID-19 restrictions ease, Value Drive Delivery of food & drink is expected to thrive and expand into less densely populated areas, made possible by technologies like Unmanned Deliveries, dynamic routing, real-time tracking, and predictive analytics.
Inspiration: Launched in October 2021, Castiron is an e-commerce solution for independent chefs, many of whom have been hard hit by the pandemic. Castiron offers its users customized e-commerce websites, including dynamic inventory management, order fulfillment tools, marketing collateral, and more. Appealing to risk-averse entrepreneurs in foodservice, the platform only takes a fee once users start making money.
5. Global Flavors
Interest in different food cultures and cuisine continues to rise. Consumers are seeking the novelty of new flavors and the health benefits of traditional ingredients like herbs, spices, fruits, teas, etc. Food & drink companies are competing to identify the next promising local or even hyperlocal flavor to introduce in new markets. Making these flavors mainstream and engaging consumers, in some cases, calls for new formats, creative combinations, and authentic storytelling around the product. However, global supply chain disruptions and shifting climate conditions threaten not only the availability of indigenous crops but their very existence.
With the ongoing debate around cultural appropriation, brands have a fine line to walk when incorporating and marketing traditional ingredients and products. Empathetic Brands with a clear set of guiding values will exhibit Local Appreciation. This means engaging with, uplifting, and recompensing the communities or organizations that are custodians of the traditional knowledge related to the food or drink.
Consumers are also increasingly interested in Tracing Origin to ensure provenance claims on food & drink products. Distributed Ledger Technology can enable uninterrupted, unimpeachable origin tracing, protecting the interests of all players and reinforcing a trustworthy, authentic supply chain story.
Inspiration: Koji, a Japanese fermentation starter inoculated with the mold Aspergillus oryzae, is gaining popularity outside its traditional market and gourmet kitchens. With its signature umami flavor and fibrous texture, koji is the main ingredient in US-based Prime Roots’ plant-based meats and seafood.
6. Supply Chain Resilience
Disruptions to the food & drink industry have persisted since the start of the pandemic. Labor shortages and transportation bottlenecks have exposed vulnerabilities, especially in global supply chains. The situation is made worse by increasingly severe and frequent weather events. As a result of these factors, the cost of doing business and, in turn, food prices continue to rise. To break this cycle of disruption and inflation, food & drink producers are seeking ways to improve the resilience and agility of their supply chains—from localizing production and reducing wastage to digitalizing and automating workflows.
Resilient supply chains are inherently Green and Lean—optimized to be both more efficient and sustainable. Intelligent emergent technologies like IoT, AI/ML platforms, robotic process automation, and digital twins enhance green supply chain management and are essential to Automating a Greener World.
Inspiration: Aspire Food Group, a leader in advanced insect agriculture, is building the first fully-automated food-grade insect protein manufacturing facility. It will operate using IIoT (industrial internet of things) sensors, AI, and ML. Integration of these technologies will improve productivity and resource efficiency, and, together with the low environmental footprint of insect protein, Aspire aims to establish a sustainable, resilient supply chain.
Where to Play in the Food & Drink Industry
Applying an industry lens to the process of environmental scanning helps organizations direct their focus and resources more optimally. And by gaining an understanding of the technological developments and trends that may present future opportunities in their industry, organizations can equip themselves with the innovation intelligence needed to take decisive, strategic action and, ultimately, gain a competitive advantage.
Download our latest report, Where to Play: Game-Changing Technologies for Food & Drink, which showcases some of the exciting possibilities and key solution drivers set to usher in unprecedented growth for the food & drink sector. The report is interlinked with the ITONICS Innovation Platform to help organizations better connect the dots between these drivers of change, anticipate the most rewarding opportunities for the future, and gain strategic advantage.
Have more Time?
- Read 4 Steps For Enhancing Environmental Scanning Capabilities
- Read The Power Of Purpose-Driven Innovation In A Pandemic at Distell
- Listen The Foresight Formula At Mars Wrigley
The ITONICS Innovation Software helps organizations to take their innovation management to the next level. If you want to learn more, visit our product overview or get a free trial of our software.