Report Reveals ‘Digital Divide’ with Food and Beverage Suppliers

by | September 12, 2024

Almost half of all food and beverage suppliers commonly rely on legacy approaches to manage communications with buyers, according to new data from TraceGains.

In a new report, Old Habits, New Challenges: The Critical Need for Modernization in Food and Beverage Supply Chains, we measure the readiness and sophistication among suppliers to manage regulatory change and market influences. Based on responses from more than 450 global F&B industry suppliers, the new research shows legacy approaches plague the industry, leaving suppliers inadequately prepared for the next major disruption, regulatory changes, and demand for more sustainable products.

Old habits die hard… and hamper efficiency

TraceGains found that almost half of all suppliers commonly rely on legacy approaches to manage communications with buyers in the food and beverage industry. Beyond daily tasks, this continued reliance on outdated tools hinders their ability to achieve greater efficiency, maintain compliance, and meet evolving environmental, social, and governance (ESG) standards.

  • Nearly half (48%) still use manual spreadsheets to manage day-to-day tasks, processes, and document exchanges.
  • Over two thirds (71%) admit that outdated processes sometimes or often create issues in their day-to-day work.
  • The biggest issue is time consuming tasks (60%), followed by data entry errors (39%) and miscommunication (32%).

Regulatory and consumer pressures weigh in

This lack of modernization among suppliers is partially due to awareness: one in four are simply unfamiliar with available technology to better manage customer relationships with F&B brands. Recent food safety incidents have heightened scrutiny on regulators, while state governments push for faster federal action. The upcoming FSMA Rule for Traceability (204), effective January 2026, will enforce lot-level traceability for specific food materials in the U.S., while strengthening European ESG regulations are reshaping industry practices across Europe.

  • Of those familiar with technology, two-thirds (65%) cite “keeping up with regulatory changes” as the top motivator for modernizing internal software.
  • Other contributing factors include faster responsiveness to consumer preferences (58%), better agility to manage supply chain disruptions (42%), and ability to adopt tech advancements like AI (33%).
  • Further, almost half (44%) of suppliers cite evolving consumer behavior including a preference for sustainable products and increased demand for online delivery has had a significant or moderate impact on business operations.
  • When it comes to decision-making, nearly 89% of suppliers believe alignment with corporate sustainability goals is a crucial consideration, with over half (53%) rating this alignment as very important.

The F&B supply chain needs some upgrades

“This new research underscores the urgent need for suppliers to update their operations,” said Paul Bradley, Senior Director, Product Marketing, TraceGains. “With increasing regulatory pressures and shifting consumer demands, widely used, outdated methods are putting companies at risk. Embracing digital solutions should no longer solely be seen as a competitive advantage – it’s required for staying ahead and meeting compliance, sustainability, and market demands.”

For more findings and key takeaways from this supplier-based research, read the full article from The Food Institute.

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