The New Gold Standard for Collaboration
The food, beverage, and supplements industries face a host of new challenges as they struggle to stay establish a gold standard for collaboration and remain competitive in increasingly crowded markets. Today’s most daunting obstacles include:
The number of bogus items in food and beverage products grows every year, whether it’s corn syrup passed off as honey – the third-most counterfeited food – or cheaper oils labeled “extra virgin olive oil.” The U.S. Pharmacopeial Convention (USP) suggests that food fraud, or “economically motivated adulteration,” affects as much as 10% of the world’s food supply – costing the industry anywhere between $10 billion and $15 billion a year.
Fraud is just as prevalent in the supplement industry, even drawing the attention of the New York State Attorney General back in 2015 when the office accused four major retailers of “selling fraudulent and potentially dangerous herbal supplements.” According to the New York Times report, the AG’s office “conducted tests on top-selling store brands of herbal supplements at four national retailers — GNC, Target, Walgreens, and Walmart — and found that four out of five of the products did not contain any of the herbs on their labels. The tests showed that pills labeled medicinal herbs often contained little more than cheap fillers like powdered rice, asparagus and houseplants, and in some cases, substances that could be dangerous to those with allergies.”
Claims and clean labels
Consumers want to know what’s in the food, beverages, and dietary supplements they’re buying. Just as importantly, they insist on knowing what isn’t in these products as well. Demand for organic, non-GMO, and gluten-free products has never been higher. Customers who want to meet that demand need clean, honest labels – and the paper trail to back them up.
Changing demographics, changing tastes
Millennials are the second-largest generation, and their influence is driving food, beverage, and supplement trends in a big way. Millennials want convenience, transparency, and more customized products. Fickle millennial tastes now dictate the constant reformulation of existing products and the rapid introduction of new products. They love their snacks, but they also love their planet, placing more value on sustainability than price.
They’re also more open to alternative medicine and more likely to take dietary supplements than older consumers.
Split retail channels
Brick-and-mortar stores no longer dominate the CPG market. Just 20 years ago, traditional retailers owned 90% of the market. Today, they account for less than half of food, beverage, and supplement sales. Increasingly connected consumers are much more likely to shop for their food or supplements online. Experts estimate the online market to double in the next three years.
Additionally, home delivery, curbside pickup, and meal-kit deliveries are leading to massive SKU-proliferation among product lines.
When it comes to supplements, direct-to-consumer startups are bouncing back, challenging the historical dominance of traditional retailers.
Innovation is costly
Generating updated packaging with new nutrition and supplements facts panels cuts into profit margins. And R&D departments at food, beverage, and supplement companies face stronger regulatory headwinds than ever when trying to bring new products to market.
Supply chain quality assurance, ingredient transparency, and R&D acceleration require a sea change in how vendors and their customers communicate and collaborate. External and internal knowledge silos need to be eliminated, replaced with collaborative platforms that connect all stakeholders, streamline workflows, and scale without piling on headcount.
TraceGains is the collaborative platform food and beverage, supplement, and CPG companies have been looking for, where R&D, procurement, quality assurance, and regulatory departments can work together with suppliers across the globe to bring new products to market faster safely. Our Networked Ingredients Marketplace makes more than 30,000 supplier locations across more than 100 countries available for manufacturers to source and qualify new vendors, procure new ingredients, build, and reformulate recipes, negotiate ingredient specifications, and automatically collect supporting quality and regulatory documentation from an ever-growing library of more than a million supplier documents.