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  • Writer's pictureMicha Veen

Food & Beverage Innovation without Operational Innovative solutions, introduce these 5 key initi

Across the Food & Beverage industry, we are seeing a continuous focus on product, customer and food innovation. Through the various international articles the following areas are widely explored and assessed:

  • Sugar reduction or full ban, examples are the sugar tax in the UK, which likely will be adopted by other nations in the world),

  • Introduction of nutrigenomics and personalised nutrition whereby food is designed for the consumer,

  • Focus on the right dietary supplements and automatic “inclusion” into consumer’s food to increase the health effectiveness of food,

  • Further reduction of GMO and/ or increase of organic food to increase food’s core elements, taste and attributes,

  • Increasing regulatory food changes, aimed at increase consumer safety around food, e.g. infant milk powder scandal in China, horsemeat/ beef scandal in Europe, etc.

Across multiple continents and countries there is a continuous focus on the latest food innovations to deliver better quality, healthier and more “transparent” food. Even though the Food & Beverage market is owned by a small number of global conglomerates, e.g. Coca Cola, Nestle, Unilever, etc. lately many small organisations are being established that have the “next” food or beverage that is more convenient and will allow the consumer to be healthier…

However, during my various engagements with many of these “small” Food & Beverage Innovation companies, I have seen how they are continuously challenged with ensuring optimal food quality, premium packaging and innovative food solutions, while keeping the operational costs down. As these organisations are not the large conglomerates, which have multiple manufacturing locations across the globe, and are therefore able to reduce their operational costs through to large-scale operations, these organisations require to not only be innovative around their “products”, but also around their operations.

Unfortunately, this lack in innovative operations have led to more and more innovative food companies that are “struggling” to keep in business. Munchery, an on-demand US food company, wastes an average of 16 percent of the food it makes. Blue Apron, another innovative food company, has health and safety issues in its warehouses, and a competitor, Sprig, paused its delivery service, relieved its drivers and kitchen and laid off seven members across its marketing and operations teams. We also see mature food organisations, e.g. Viplus, an Australian infant formula milk powder producer, established in 1893, has been prohibited to sell and distribute its infant formula in China due to regulatory reasons.

So the question is, how are these small, sometime established, innovative food & beverage organisations able to deliver their innovative quality products through operational innovative solutions to guarantee their quality, premium and speed to market?

Similar as in the leading-edge technology environment, many small and medium innovative food companies have started to combine their efforts across manufacturing, supply chain, transport, logistics and distribution and other back-office processes to drive cross-organisational effectiveness, allowing them to deliver their core product offering.

But, instead of assisting each other with value-added innovative operational solutions, I have seen many of these Food & Beverage organisations trying to imitate the operational environment of these global conglomerates.

So, how do these organisations “survive” and are able to compete with the well-established Food & Beverage organisations:

1. Establish operational partnerships

Small organisations should look further than solely creating partnerships with their customers, suppliers and industry partners. To ensure that your operations and back-office provides value-add innovative solutions, it’s imperative to extend beyond your “sales” and “purchasing” partnerships and identify and create partnerships with operational partners, e.g. manufacturing, transport, distribution and logistics, finance & accounting. Partner with industry peers and go-to-market together to increase your effectiveness

2. Focus on value-add operational activities

Ensure that your operational teams only focus on value-add processes, reporting, etc. Ensure that you “outsource” your transactional processes, e.g. financial accounting, transactional marketing and sales processes, manufacturing processes, etc. Through introducing of progress metrics, KPI’s and clear periodic update sessions and agreements, you’re able to “control” your transactional processes, while you’re able to focus on the value add initiatives, like customer and supplier interactions.

3. Keep up-to-date with the latest industry trends

It’s imperative that you are keeping up-to-date with the latest industry trends. This will assist with identifying continuous operational innovative solutions and/ or partnerships. Not only your “products” should continuously evolve, but your operational effectiveness should also increase

4. Operational Innovation follows your NPD route

Similar to your new product innovations, your operations will go through ideation, testing, validation and improvement stages. I have seen successful organisations that have extended their NPD processes into the operations, which allowed their operations to run through the same process to continuously evolve and innovate

5. Use external assistance

Innovation doesn’t happen through continuous improvements or the “same” internal stakeholders. To introduce innovation you need to use “external” assistance, views, insights and support. This doesn’t mean that you need to hire expensive external consultants, but you should work across your teams, from manufacturing to sales & marketing to finance to procurement. Innovation only starts when people with different views, experiences and ideas come together.

Operational Innovation is imperative to establish, exist and grow in the current Food & Beverage business landscape, which is becoming more global by the day…

If you’re looking for hands-on, active support in how to introduce Operational Innovative solutions in your business, please feel free to schedule a meeting/ call to understand how we can guide you to create a solid foundation to grow your business faster, further…

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