Digital Transformation & Industry 4.0 in the Food and Beverage Industry

Those plants that swiftly adopted IIoT and the above-mentioned industry 4.0 applications saw the benefits in terms of streamlined plant operations, reduced unplanned downtime, and faster root cause analysis and equipment repairs, both during remote work conditions and once employees were able to return to work in person. The food and beverage (F&B) industry isn’t at the head of the pack when it comes to digital transformation, but the last few years saw F&B companies pick up the pace of digitalization  even before the impact of COVID-19. 

This post is last of a series exploring the impact of digital transformation on various process manufacturing industries. Read our earlier articles about the oil and gas industry, the pharma industry, and the chemical industry.

The State of Digital Transformation in Food and Beverage Manufacturing

Consumer trends towards healthier, more sustainable food, a rise in regulations around food safety, and a rise in smaller, more personalized production have all contributed to pushing F&B manufacturing plants to embrace the benefits of industry 4.0 over the last 2-3 years. 

However, like other industries, the F&B industry was deeply affected by the global pandemic. Supply chains fractured and broke, employees were unable to come in to work in person in crowded plants, and customer demands swung even more wildly. The overall level of demand varied greatly from plant to plant, as the need for restaurant products plummeted but the market for staples for domestic use, such as flour, milk, and pasta, soared. 

In many ways, the food and beverage industry was further along digitally than a number of other manufacturing verticals before COVID-19 arrived. A significant number of plants already use automated equipment items such as ovens, processors, and cold chain storage units equipped with sensors. But when the pandemic began, few of them had smart devices that share data with each other and a broader integrated data analytics system, or the connectivity that enables remote operations. 

According to one study, 73% of F&B companies have continued or increased their investment in digital technologies, with supply chain operations (51%), data collection (38%), and improved business analytics (37%) standing out as the primary use cases. 64% say that their progress towards digitalization has been good or advanced. 

Key Trends in Digital Transformation in the Food and Beverage Industry

Meeting sustainability requirements

Sustainability is the leading issue for 79% of food and beverage companies, as the consumer desire for better product traceability and visibility steadily increases. Today’s consumers want to know the origins and environmental footprint of all the ingredients they consume, and retailers in turn pass the pressure on to F&B production plants. 

This primarily manifests in improved supply chain solutions, which are also needed to overcome the catastrophic impact of COVID-19 on over-extended supply chains. Plants are adopting tools that allow full transparency both upstream and downstream, so that they can quickly and easily respond to requests to demonstrate provenance, as well as identifying and responding to bottlenecks before they cause serious delay or shortage in raw materials. 

Customers also want to see “greener” manufacturing processes. To that end, plants use predictive analytics solutions to help raise overall plant efficiency, and cut emissions, energy use, and wasted resources. Newer packaging equipment and methods allow companies to decrease the amount of packaging they use, particularly non-biodegradable plastic, to meet demands for more environmentally friendly manufacturing. 

Raising food safety standards

Alongside increased demands for sustainable, green manufacturing, F&B companies have to raise their safety standards. When asked what matters to them about their food in the future, safety was the third most important issue cited by consumers, just behind eco-friendliness and trailing health. 

A UN Food and Agriculture Organization’s (FAO) Food Safety report from 2019 concludes that approximately 600 million people, or 10% of the global population, become ill every year after eating contaminated food, and that 420,000 die as a result. Public health organizations around the world are tightening food safety regulations, while manufacturers are highly aware of the disastrous impact that food recalls, or worse, food poisoning incidents, can have on their reputation and thus their bottom line. 

A number of digital technologies come together to address food safety:

• Robotic process automation (RPA) can improve quality control and prevent human errors that could contaminate food during production.
• Better hygiene processes like cleaning in place (CIP) technologies can monitor microbial levels and improve the reliability of cleaning protocols. 
• Improved supply chain visibility together with Industrial Internet of Things (IIoT) temperature sensors increase confidence that perishable food and raw materials have been consistently kept in the correct conditions and aren’t close to expiry. 
• Logistics logging tracks every step of the shipment up until delivery, confirming that items haven’t been contaminated or tampered with. 

Streamlining plant operations

Like other verticals, food and beverage plants found that COVID-19 forced them to adopt technologies that enable employees to work from home and production to continue without disruption, such as cloud project management and communication tools; machine learning (ML) and big data for predictive maintenance; IIoT devices together with edge computing and augmented reality (AR) to support digital twins; and RPA on the factory floor.

Leading companies are moving towards an integrated, automated system that handles demand forecasting, production scheduling, process configuration, maintenance planning, inventory management, supply chain organization, and fulfilment. 

Improving agility 

Demand forecasting was challenging even before COVID-19, with customer preferences fluctuating frequently and a rise in small-batch, personalized orders. But it was exacerbated a thousand-fold by the pandemic, when restaurant closures and lockdown rules caused demand for some foods to plunge and others to skyrocket, while supply chains buckled and broke. 

Like industries such as chemicals and pharma, food and beverage manufacturers were forced to adopt technology to be able to respond quickly to last-minute changes in supply chain, demand, or small batch orders, without compromising quality or inflating costs. Advanced analytics that use ML algorithms to crunch market data and produce fast and accurate forecasts became invaluable, and integrating data from supply chains enabled better, faster decision-making. 

Plants also use ML-powered predictive analytics to help mitigate or eliminate bottlenecks in production, so that product volume can be ramped up or down whenever needed. Digitalized production lines are more swiftly reconfigured for the next batch, and automated configuration rules help prevent manual error. 

What is Holding Back Food and Beverage 4.0?

For a long time, the primary barrier to improved digital transformation in the F&B vertical was legacy infrastructure, but recently worries about lack of digital skills and knowledge have been overtaking it. 

A recent report found that 51% of companies consider that knowing how to use and integrate technology is their biggest obstacle. Lack of skills is holding back digital transformation across the manufacturing industry as a whole, with companies from numerous markets citing it as their primary barrier. 

Connected with the dearth of digital skills come anxieties about leading a digital culture change and reeducating employees, managers, and often executives into an industry 4.0 mindset. 

Food and Beverage is Rapidly Ramping up its Digital Capabilities 

Between the impact of COVID-19 on supply chains and customer demands, and existing pressures for improved sustainability, transparency, and food safety, food and beverage companies are moving swiftly to implement their digital transformation and enable industry 4.0 approaches. Industry-wide problems such as a lack of talent and the tripwire of legacy infrastructure are slowing things down, but the pace of change is encouraging.