Food and beverage manufacturing is on the frontline. It’s at the intersection of pressing challenges and emerging opportunities from shortages of raw materials to shifting demands in sustainable food and securing a resilient workforce. In short, food manufacturers face an especially intense and ever-evolving landscape. 

Digging into some more of the specifics, we are seeing uncertainty and new challenges across the food & beverage manufacturing enterprise. Specifically: 

Supply Chain Volatility

Reliable access to raw materials and ingredients remains challenging. Since the pandemic, occasional shortages are the ‘new normal’. At a recent CFBN supply chain event, industry experts acknowledged the continuous volatility caused by natural disasters, disruptions, or disease outbreaks such as bird flu. Preparing for these disruptions requires scenario planning strategies that prepare manufacturers for disruptions of many kinds. 

One important lesson is to watch out for the ‘diamond-shaped supply chain’, where manufacturers contract with several different raw ingredient suppliers, only to discover that they all rely on the same source, which creates vulnerabilities when disruptions occur. 

Regulatory Push for Reformulation 

The FDA has announced steps to phase out petroleum-based synthetic dyes and instead to encourage natural alternatives. While no formal ban has been proposed (yet), the need for reformulation is on the horizon. This presents challenges including the risks of changing food structure, shelf stability, and increased supply chain costs. Banks like Wells Fargo and Rabobank have written about the potential opportunities when manufacturers proactively reformulate with natural coloring.  

Staffing Challenges

Without employees, food and beverage manufacturing is impossible. Like many other industries, staffing is a challenge. Based on the National Association of Manufacturers’ Q2 2024 Outlook Survey, 67% of respondents identified difficulty in attracting and retaining employees as their top challenge. Meanwhile, the job market is showing signs of cooling, as recent data shows fewer new positions are being created. Thus, manufacturers are looking at several options to keep their plants running: 

• Implement Flexible Schedules 
  

In 2024, The Wall Street Journal reported Land O’Lakes’ policy to replace the rigid 12-hour shifts with flexible schedules. This should make work more manageable for employees and simultaneously increase retention rates in the plants. 

• Accelerating Automation 
  

Formic and Land O’Frost, two valued CFBN-members, collaborated in implementing automation improvements at the Land O’Frost’s Lansing, IL facility. Automated palletizers increase production efficiency, improves employee well-being and saves on labor costs. More on this project can be found here.

Sustainability’s Future

Packaging is central to sustainability efforts in food manufacturing. The 2020 U.S. Plastic Pact aims to end plastic waste. But recently, several participating large CPG companies namely, Mondelēz, Mars and Nestlé - have left the Pact. Additionally, PepsiCo announced some changes in their sustainability strategy including weakening the goals for reducing the use of virgin plastic. 

Join the Conversation 

For more insights on challenges and real-time discussions about solutions, join us at “The Flavor of Collaboration: Tackling Industry Challenges”, organized by Chicagoland Food & Beverage Network, Contract Packaging & Manufacturing Association and graciously hosted by McCormick Flavor Solutions. The event includes an exclusive McCormick Flavor Solutions tour, panel discussions, and networking opportunities. Sign up here.