Consumer Staples

Food Processing Industry Trends Influenced By COVID-19

<p style="text-align: justify;">When the COVID-19 pandemic broke out, we all became familiar with the assertion that we were &ldquo;living in unprecedented times.&rdquo; This peremptory statement became common so swiftly that it was bordering on a clich&eacute; (so much so that I must confess to having made use of it too).</p><p style="text-align: justify;">Nevertheless, a global pandemic is not an unprecedented event, and, while devastating by almost any measure, the emergence and spread of infectious diseases with pandemic potential occurred regularly throughout history.&nbsp;</p><p style="text-align: justify;">When it happened in the past, once the dramatic phase was passed, numerous innovations found their way to the market. It is, in fact, known to most that, in the Chinese language, the word &ldquo;crisis&rdquo; is composed of two characters, one representing &ldquo;danger&rdquo; and the other, &ldquo;opportunity.&rdquo;</p><p style="text-align: justify;">While it is too early to assess the long-term impact and foresee the future &nbsp;of the food industry after COVID-19, some trends are already clearly visible.</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Automation</span></h2><p style="text-align: justify;">The <a href="">COVID-19 pandemic gave food processors a strong motivation to consider automation</a>, in many cases accelerating preexisting trends. Many of these technologies are not only replacing labor &nbsp;(due to the challenge of workers getting sick while operating throughout the process), but they are enhancing efficiency and quality.</p><p style="text-align: justify;">Therefore, even if the implementation of automated solutions started as an immediate need to overcome unexpected challenges, processors are shifting focus from surviving to thriving by understanding first-hand the benefits.</p><p style="text-align: justify;">Since several automation solutions (like robotics and A.I.) are utilized to handle routine and often dangerous tasks, this will result in safer operational environments for the workers.</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Food Safety</span></h2><p style="text-align: justify;">While it is evident that COVID-19 is not a foodborne disease, food processors need to reassure their customers more than ever. Since food safety is the result of many different actions in the supply chain, <a href="">the pandemic confirmed the strong need for more responsive and data-driven approaches to ensure a strong and resilient food system</a>.</p><p style="text-align: justify;">On the sanitation side, before COVID-19, many industries defined the process basing it on the cleanliness of manufacturing and processing equipment. The requirements have been redefined to consider how well an environment might prevent the spread of pathogens. New technologies (such as UV sterilization and progressive methods of sterilizing the airflow) are now being considered because of the pandemic.</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">AI and IIoT</span></h2><p style="text-align: justify;">Although the current situation has led to the development of specific solutions (for instance, to perform temperature checks or ensure workers have their PPE), Artificial Intelligence will assist with a very large range of applications.&nbsp;</p><p style="text-align: justify;">In fact, A.I. allows us to get to the root of a problem way faster than humans do in multiple applications within food processing, comparing dozens of variables in a given process to correlate them with deviances that lead to product defects . A.I. and IIoT (the Industrial Internet of Things) combined will offer new outlooks for equipment control and maintenance, reducing human intervention while allowing real-time monitoring.&nbsp;</p><p style="text-align: justify;">Until now, significant investment requirements have been the limiting factor in adopting these solutions. At the same time, technology and data-driven industry will bring in new talents to deliver the innovations needed to sustainably feed billions for years to come.</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Traceability</span></h2><p style="text-align: justify;">In the coming years, we will see an extensive <a href="">adoption of digital technologies (for instance, Blockchain) in food traceability practice</a>. This is driven by the need for food processors to implement the recommendations within the FDA's new era of Smarter Food Safety blueprint. Furthermore, the way consumers approach their purchases of food will never be the same again.&nbsp;</p><p style="text-align: justify;">Traceability expectations along the supply chain (for instance, understanding where farm-fresh produce is coming from) were already on the rise well before the outbreak, which simply accelerated the trend. By adopting advanced traceability solutions, companies can easily collect and store data on every aspect of the process, guaranteeing a safe product for the consumers.</p><p style="text-align: justify;">Despite new variants, the current pandemic will not last forever, and the most important lesson we need to learn is to be ready with appropriate responses to future massive disruptions in the industry.</p><p style="text-align: justify;">Processors are given an extra incentive to go farther along the path they have already taken, implementing new safety ideas and innovations that are surfacing. This will result in finding opportunities to reduce costs, control risks or gain a competitive advantage.&nbsp;</p><p style="text-align: justify;">If a new pandemic occurs (and unfortunately, chances are pretty high), applying these new measures and solutions, especially in the automation field, will guarantee the processors their own &ldquo;vaccination&rdquo; protocol.</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This <a href="">article</a> was contributed by our expert Alessandro Turatti.</em></span></p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered By Alessandro Turatti:</span></h3><h2><span style="font-size: 12pt;">1. What comes under the food processing industry?</span></h2><p style="text-align: justify;">This is the industry that transforms raw agricultural commodities into food, making them suitable for consumption, cooking, or storage. Some examples are fruit and vegetable processing, cereal milling, milk and derivatives, fish, poultry, and meat products and beverages.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. How large is the food processing industry?</span></h2><p style="text-align: justify;">The global food and agricultural industry for 2021 totals almost $ 9 trillion, which is about 10% of the world's GDP. Food revenue worldwide will continue to increase over the next years and is projected to reach around $ 11 trillion in 2027.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. What is the future of the food processing industry?</span></h2><p style="text-align: justify;">The future of the food processing industry is to feed a growing worldwide population (expecting to reach the 10 billion milestone in 2050) in a sustainable fashion. It is predicted that by 2030, 40% of the demand for water may not be met, and 20% of arable land is already in a deteriorated state. Higher yield and capacity are then the focus for the future.&nbsp;</p><p style="text-align: justify;">For this reason, over recent years, technology and digital disruption have changed the way we process food in a more efficient way through robotics, data acquisition, and state-of-the-art processing techniques.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">4. How can you manage waste in the food processing industry?</span></h2><p style="text-align: justify;">This goal can be achieved through a series of complementary actions. Generally, the process begins with an audit that can help a company to determine how much food is being wasted or the type of food not being used effectively.&nbsp;</p><p style="text-align: justify;">Subsequently, a group of measurements can be implemented (i.e., digital solutions and software to track inventory and manage production, improving and/or replacing packaging, implementation of logistics). The target is to reduce/avoid waste and/or &nbsp;recycle food scraps into bioenergy, bioplastics, and even clothing.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">5. Safety measures in food processing service before and after COVID-19 &ndash; has anything changed?&nbsp;</span></h2><p style="text-align: justify;">The pandemic has opened the eyes of processors to the need to implement more automated solutions. As a matter of fact automation matters, since food processors are highly dependable on human workers to produce their products, but what happens when workers cannot show up for their shifts?&nbsp;</p><p style="text-align: justify;">Nowadays, &nbsp;food processing plants are employing hundreds or thousands of workers, making social distancing impossible, thus increasing the risk of contracting the virus. This scenario is made even worse if you take the asymptomatic transmission into account. Clearly, automation assists also in avoiding potential contamination of foodstuffs from the operators while handling products out of the protocols.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">6. How has COVID-19 Impacted the Food Industry + Consumers?&nbsp;</span></h2><p style="text-align: justify;">Unprecedented disasters such as the COVID-19 pandemic disrupted our food system and clearly changed our relationship with food. While we hope to go through the final phase of the health crisis, it is still difficult to establish which of the trends will remain permanent and which ones are temporary.</p><p style="text-align: justify;">From my perspective, food and beverage companies should carefully review their sourcing strategies while rationalizing their range of products. The agility and resilience of the supply chain also need to be analyzed to be crisis-proof. On the consumer's end, the increased consumption of frozen foods (which was also rising before the pandemic) will continue, and e-commerce and delivery will definitely continue to expand.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">7. What are some current trends in the foodservice industry?</span></h2><p style="text-align: justify;">I anticipate food manufacturers to be expecting an increase in the need to recreate the original taste and mouthfeel of meat with plant-based products that are here to stay, being perceived as good for the health and for the planet. I also see a growth in the interaction between companies and consumers concerning the development of new products and flavors.&nbsp;</p><p style="text-align: justify;">The youngest generation is well used to having constant personal connections with brands on social media, and engaging Gen Z with communication is of utmost importance for the food industry. Food fusion (we all experimented with different ingredients, flavors, and cuisines during the lockdowns) and sustainable packaging (several brands and restaurants are moving toward some sort of green casing, i.e., cardboard boxes) are two other trends I personally foresee.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">8. What is the current trend in food production technology?</span></h2><p style="text-align: justify;">Automation and robotics (as per the previous reply), food safety and traceability (real-time food monitoring via the Internet of Things -IoT- and advancements in blockchain and devices), and food waste reduction since curbing food wastage is critical to addressing food insecurity.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">9. Which sector does the food processing industry depend on?</span></h2><p style="text-align: justify;">On the sourcing side, agriculture is the industry supplying the main raw materials of the food industry, and agricultural products as well can increase the added value through the food industry. On the other end, the distribution and supply logistic chains must be strengthened; in June 2021, the U.S. Department of Agriculture announced a commitment of over $ 4 billion to rebuild the US food system and fortify it while diversifying the chains for the food processing and distributing sectors.</p>
KR Expert - Alessandro Turatti

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