Among the multi-billion dollar industries, food production is responsible for making a significant contribution to the economies of local areas through employment, business and service opportunities.
With a lot at stake, industry players need to find a path back to value creation, focusing on the importance of food safety and quality.
As food supply becomes globalized, the need to strengthen food safety systems and enhance food quality become more crucial. According to World Health Organization (WHO) data, unsafe food kills around two million people every year. Unsafe food, that contain harmful bacteria, chemical substances, parasites or viruses, could trigger more than two hundred diseases, ranging from diarrhea to cancers.
- Quest for Innovation Food production is not only about taking raw ingredients and converting them into marketable food items which have longer shelf life, but also about transforming raw materials into nutritious products. Innovation capability is necessary and achievable through understanding consumer preferences and tastes, moving quickly to be first-to-market, and finding a demand that is insensitive to changes in price. Some of the biggest global food and beverage manufacturers (like Nestlé and Kraft) started their businesses by creating innovative packaging that increased the shelf life of their products. Today, they are competing by introducing new products such as low-fat and fat-free products in various categories.
- Simplified Business Processes Learning from the big companies, manufacturers would benefit from simple and clear business processes. By focusing on the importance of food safety and quality, manufacturers can work at the highest level of efficiencies and eliminate waste as well. For example, hydroponics method can be used as an alternative to cultivate plants faster than in soil, while at the same time eliminating soil-borne pests and diseases. As a result, manufacturers do not need to use large amounts of pesticides.
- Creation of Shared Value Instead of aiming at cost-advantage, food and beverage manufacturers should aim to create shared value wherever they are operating. This means using raw materials produced by the local farmers to make products that are made to their palates and sold in their country. That way, the community connected to the manufacturers would start to grow together – from employees to supplier, distributors, and so on.
- Expansion of Product Line Once a business takes off, it is natural to expand its product line. By doing this, the company can see which products get good traction in the market. Big global food and beverage empires like Kraft, for example, started from creating one product line – cheese – to owning more than sixty products ranging from snacks to beverages today.
- Investment in Research and Development Building a high-quality food production company would require a sizeable amount of investment in research and development. For example, the most effective inspection options for manufacturers to maintain food safety and quality today vary from X-ray inspection technology to metal detection technology. As the company grows, there will be a need to put a whole range of products into clinical and medical trials.
The importance of food quality and safety is not only beneficial for the consumers but also boosting a company’s brand image. With industry overcapacity, consumer price sensitivity, grocery price wars, and retailer pressure on manufacturers’ economics, a holistic approach to management system is definitely required in order to create a competitive yet sustainable business model. The 5 ingredients shared here should be put into practice by any player in the industry, since they are the key to grow a successful food production company.