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food beverage industry

Top B2B eCommerce Platform Features the Food and Beverage eCommerce Industry Needs in the Pandemic Economy

Even before the COVID-19 pandemic, eCommerce in the food and beverage industry was already on the rise. 2017 food eCommerce sales in the US of $12.61 million were projected to almost double to $24.12 million by 2021And this estimate was before pandemic conditions drove increased online selling. 

Industry giant Unilever, home of brands like Hellman’s and Lipton, is adopting a new business model that includes selling through B2C and B2B eCommerce. They’ve dedicated a team of 800 people, so you know they are serious about their eCommerce intentions.  LEK’s estimates of growth are even more bullish. They put worldwide growth of eCommerce in food and beverage even higher.

food beverage increase

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COVID-19 Impacts on Food and Beverage Industry

Food and beverage companies face challenges on multiple fronts. Shifting consumption and purchasing patterns, supply chain disruptions, and navigating ever-changing rules and regulations have made every day a new day for those tasked with managing the disruptions. 

Shifting consumption patterns On the one hand, people are staying at home and home preparation of meals and beverages is driving off-premise sales up. And increased sales is good. On the other hand, these off-premise sales are low margin. Increased sales bad? Well, they are coming at the loss of historically high margin out-of-home sales. Even as economies begin reopening, it’s uncertain how quickly those past consumer behavior patterns will return. 

Changing consumption levels  Initial sales volumes spiked based on consumer fear. However, once people begin to move about, overall consumer consumption will likely be reduced by the looming economic recession. Even economists are having a hard time wrapping their arms around this one. The last recession took 18 months to unfold, but this time economic change has been swift. The long-term impact is anybody’s guess at this point. 

Supply chain woes Supply chain disruptions and changing commodity prices make planning, production, and pricing decisions increasingly difficult to make. As hotspots flare up, commodities may become scarce or evaporate. Even moving materials and product within the chain is a challenge. 

Changes in purchasing patterns  Purchasing patterns continue to shift. Pre-pandemic on-line food and beverage purchases were only a little over 3% of online sales. However in March 2020 alone,  according to a Nielsen and FMI survey, 80% of shoppers who made a food or beverage purchase online intended to do so again. If your customers weren’t buying online before the pandemic, they are now. 

Retail sales share in food and beverage eCommerce

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Compliance and logistics complexities Operating in different regions requires adapting to myriad health and safety rules. Logistics is increasingly complicated as drivers must face rules that can vary from loading dock to loading dock, even within a single geographic region. 

What to Expect: Food and Beverage Industry Trends to Anticipate

As 2019 rolled into 2020, only 56% of companies in the food and beverage industry had an eCommerce presence. Being engaged in eCommerce in the food and beverage industry well situated these companies for the demand for online sales brought on by the corona virus and ensuing lockdowns. But that doesn’t mean there isn’t room for additional players. Here’s the major trends in the industry:

Continued supply chain volatility Look no further than Asia for examples of an industry roiled by volatility. While APEC trade ministers place a priority on restarting food and agriculture supply chains, India is short on lab staff for food safety testing, and half of Malaysia’s regions are refusing to leave lockdown conditions. US meat processing plant closures impact prices and availability. Management will be pushed to continually adjust and must have real-time data to form their decisions. 

Growth in direct to consumer (DTC) sales  Retail chains like Wal-Mart, Kroger, and Whole Foods can barely keep up with delivery service sales and InstaCart is scrambling to fill the gap. This makes the food and beverage market ripe for continued expansion into DTC sales. Done properly, DTC increases brand loyalty and sales. 4Sisters Rice stood up an eCommerce site in only 2 weeks while continuing to support their brick and mortar retailers. Successful eCommerce food sales will include DTC channels in addition to B2B sales to restaurants, brick and mortar stores, and food wholesalers. 

Delivery logistics challenges  Long haul trucking to move goods from produce growing areas like California and Florida will likely continue to be a challenge. The additional time required to clean and sanitize trucks is adding pressure to already tight schedules. Lack of rest areas, ability to get meals on the road, and a myriad of local delivery regulations has sidelined many truck drivers. The CDC issued guidelines specifically for long haul truck drivers and the DOT has eased hours of service restrictions during the state of national emergency. FedEx and UPS restrictions and waiver of guarantees for DTC and LTL deliveries continues to change. 

Increased health consciousness by consumers Customers in all sectors are increasingly concerned about their personal health and the safety of their food. This will play out on two fronts. First, products perceived as healthy alternatives will rise in popularity. Second, the concern for end-to-end product traceability is higher than ever. Food and beverage companies will increasingly rely on IoT and blockchain technology to improve food transparency and traceability, a trend started by Auchen. 

What Food and Beverage Companies Need in a B2B eCommerce Platform

Whether you are replatforming an existing site or just getting started in eCommerce beverage and food sales, here are key features you need in an eCommerce solution to survive and thrive a post-pandemic economy.

Integration. No man is an island and no eCommerce solution can stand on its own. Your platform must seamlessly integrate with your ERP, logistics, WMS, CRM, PIM, and other existing solutions. Data must flow freely so all systems stay in sync. In addition, permission-based dashboards break down data silos and place information at the fingertips of decision-makers when and where they need it. The ability to deploy in a traditional or headless architecture provides maximum flexibility in integration scenarios.  

Multi-channel support. Food eCommerce trends show that market demand for DTC sales will continue to be strong. Your platform should be able to support B2B and B2C channels. These very different markets demand a very different customer experience. Make sure you select a platform that handles both equally flawlessly Unfortunately, many B2B platforms are simply repurposed B2C solutions. This may solve your need for B2C but won’t advance your B2B business. OroCommerce is the B2B eCommerce platform designed for the way the food and beverage industry does business. In addition, it supports B2C and even marketplace transactions.  

Personalization  86% of buyers are willing to pay more for a better customer experience. Personalization is a huge part of the best customer experience. 63% of consumers are turned off by generic marketing messages.  Deliver personalized price lists, product catalogs, and minimum quantities to each B2B customer. Push B2C sales with impulse purchases and promotions. Do it all from the same platform! Leverage data and analytics to segment audiences and deliver right time right messages directly to their screen. Personalize to drive brand loyalty and sales. 

Scalability  Today’s eCommerce solution should future-proof your business for tomorrow. As your business grows, your platform should scale with you. Look for solutions that can deploy on-premise, on the web, or in the cloud. Make sure your platform handles an endless number of SKUs and customers. 

Ecosystem and Support  Just as important as the platform you choose is the ecosystem surrounding it and the support available. As a rule, open source solutions provide greater security and operate with a larger developer and user community. Because it’s peer-reviewed, it’s more reliable. The availability of solutions providers and partners is just as important. When it comes to developing the implementation strategy and executing the plan, you’ll want partners that are familiar with the platform.  And speaking of implementation, don’t forget to ask about APIs and plugins available to speed the time to market. 

How eCommerce Addresses Modern Market Issues in the Edibles Industry

The COVID-19 pandemic is serving as a spotlight on modern issues in the food and beverage industry. In some cases, it has accelerated change that was already underway (like a shift in B2B eCommerce) but it is also shining a light on new markets like DTC sales. 

Whether it was a novel coronavirus or some other disrupter, most supply chains just weren’t strong enough to withstand rapid change. 

In the modern market and the market of the future, food and beverage manufacturers, wholesalers, and distributors must have two key ingredients: flexibility and data. 

F&B companies need flexibility to:

  • Scale up and down as rapidly as the market changes
  • Change business models from B2B, B2C, B2B2C and back again
  • Respond with new products to fill new needs as they arise
  • Face ever-changing supply chain and logistics challenges
  • Provide a customer experience that mirrors customer expectations

Data is crucial for:

  • Insights into customer buying patterns
  • Penetrating new markets
  • Diversifying supply chains
  • Delivering right product at right time
  • Segmenting markets to improve conversions
  • Increasing average order value 

Why Is a B2B eCommerce Platform Perfect for Food & Beverage Now?

As the recent crisis demonstrated, FMCG brands should be prepared to volatile demand. Online presence is mission-critical in today’s food and beverage industry. Whether selling B2B, B2C, D2C, the food and beverage industry requires powerful tools for uninterrupted selling across all channels. The right eCommerce solution should provide flexibility and serve up reliable and actionable data important to the industry. It must integrate with existing systems such as ERP, WHM and PIM tools for easy, real-time information exchange.

Lastly, your solution should be as easy to use on the front-end as on the back-end. With a website that is SEO-friendly and built to work on any device, you’ll guarantee quicker adoption, higher conversions, and more repeat sales. FairPrice, a Singapore-based grocery giant, took charge and reimagined their B2B sales arm with a purpose-built B2B eCommerce software. Learn about how they were able to quickly implement a B2B sales portal, fully integrating their ERP system, workflows, promotions, and reward programs with OroCommerce:

FairPrice case study food beverage

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