Industry Expert eBook F&B Distribution Top Challenges (EMEA)
Expert Roundtable: How Food & Beverage Distributors
Tackle Today’s
Top Challenges
The food and beverage industry continues to navigate significant challenges, including elevated input costs, consumer price sensitivity and a dynamic regulatory environment. Despite these hurdles, the industry is expected to grow, driven by technological advancements and strategic investments in automation and sustainability.
Notably, there as an anticipated annual growth rate of 6.16% for automation within the food industry to help companies enhance efficiency and maintain a competitive advantage. And not only that, but enhancing supply chain resilience has become a top priority due to disruptions caused by material shortages, geopolitical conflicts and extreme weather conditions.
A robust transportation management system (TMS) made specifically for the food and beverage industry is essential for tackling these challenges head-on, enabling businesses to streamline their operations, optimise costs and enhance overall efficiency.
To better understand these challenges, how to combat them and the innovative solutions available to help you to do so, we’ve gathered four industry experts with a combined 100+ years of experience for an insightful roundtable discussion. Their extensive knowledge and firsthand experiences shed light on how food and beverage distributors can leverage TMS to overcome obstacles and achieve success.
Meet Our Experts
Jim Endres (JE)
Jim Endres is the Director of TMS focused on helping transportation companies, distributors and manufacturers operate and grow their businesses. He has more than 20 years of experience in the TMS software industry, with expertise in private fleet route optimisation, planned versus actual route visibility and proof of delivery.
Gareth Evans (GE)
Gareth Evans is currently the manager of solution consultants for Aptean’s TMS products and brings a wealth of knowledge from working in the logistics industry for over 28 years. His experience of managing professional services and pre-sales both in the UK and U.S., as well as product manager for Aptean Home Delivery, enables him to help clients realise the benefits of advanced logistics technologies.
Rob Hutton (RH)
Rob Hutton is a Senior Account Executive focused on guiding large enterprises through digital transformation programs in their transport operations. Leveraging his 28 years of logistics industry experience in a variety of operational, consulting, and commercial roles, Rob assists senior executives in understanding how to navigate the changes and challenges a large scale TMS deployment can bring, as well as the huge value delivered across the organisation.
John Mead (JM)
John Mead is an Account Executive with over 30 years of experience in supply chain and specialises in delivering transformative TMS solutions to Aptean customers and prospects. He bridges the gap between complex logistics challenges and the powerful capabilities of our TMS solutions. John’s driven successful implementations for numerous clients across North America, delivering measurable results through data-driven strategies and industry expertise.
To understand the pressing issues faced by food and beverage distributors today, we asked our experts what they’ve noticed and experienced. The complexities in managing various types of products; the impact of external factors like fuel costs and driver shortages; and the crucial role of data management were discussed in detail.
Q: What are the most significant challenges food and beverage distributors face today?
RH: This won’t surprise anybody: food and beverage distributors are facing increasing transport costs. Fuel is traditionally about 25-30% of the total cost of transport, but the remaining 75% is all going up— people, vehicles, tires. Food and beverage manufacturers have a product that’s generally low in value, high in volume, so transport is a key component of their cost base. If they can reduce that transport spend, it has a significant impact on their gross margin.
GE: To echo what Rob said, the major challenge here is the impact of external factors like fuel costs and driver shortages. These are critical issues that need to be managed effectively to ensure smooth operations. If you’re a larger company like McDonalds, Sainsbury, Safeway or Morrisons, you have your own fleets delivering to your stores. It’s all about planning as efficiently as possible to control costs and ensure you’re producing efficient plans which can hit the time windows, especially if you’ve got mixed loads.
Proof of delivery systems help ensure products are delivered correctly and on time, reducing issues like wrong or damaged products and supporting upstream processes such as warehouse management. For instance, planning might assume unloading takes 20 minutes, but actual data might show it takes longer, allowing for better future planning.
JM: One advantage our software offers to the customer is the ability to knock down the silos within the organisation and communicate effectively. Data is the start of every meaningful conversation. If you can’t have shared data across those division silos, that conversation can’t start.
RH: Absolutely. Post-implementation, customers often report improved internal service performance because they can have meaningful conversations based on the same data, eliminating arguments over differing data points.
JE: I’m seeing a lot around ensuring better collaboration on freight visibility. It’s one thing to get a good rate, book a good load and tender that load to a carrier and have the carrier accept it. But when you build a platform that allows all key stakeholders involved in a shipment access to all freight data, including freight audit and pay and analytics, anyone involved in the shipment now has visibility and can collaborate on various tasks related to a shipment. This creates a deeper partnership between a shipper and a carrier, improving overall service quality.
“Proof of delivery systems help ensure products are delivered correctly and on time, reducing issues like wrong or damaged products and supporting upstream processes such as warehouse management. For instance, planning might assume unloading takes 20 minutes, but actual data might show it takes longer, allowing for better future planning.”
Gareth Evans, Manager of Solution Consultants
Different segments within the food and beverage distribution industry face unique challenges and require tailored strategises to effectively address logistics, cost management and regulatory compliance. Our experts share their insights and experiences.
Q: How do different segments within food and beverage distribution perceive these challenges?
RH: Low-value, high-volume verticals, including food and beverage processing and wholesaling, see transport as a key component. Adoption of software as a service (SaaS) TMS is essential for future-proofing businesses. Flexibility, agility and having a proper system in place are crucial for handling variability in transport.
JM: Smaller, more frequent deliveries are becoming the norm, requiring tighter planning. Different segments face unique challenges. The just-in-time model requires frequent smaller deliveries, posing challenges. Different delivery frequencies share challenges around tracking and tracing dates, shelf life and visibility with vendors. For example, a manufacturer delivering weekly or monthly loads faces different logistics issues than those delivering daily.
JE: Lot tracing involves tracking raw materials (food/ ingredients) from its sourcing origin, to the plant for processing into a finished good, then those finished products going to a customer. This requires visibility and collaboration with vendors and carriers/distributors.
RH: It goes back to data, too.
JE: Data is essential. Fresh food logistics involves specialized carriers, refrigerated vehicles, reliable on time pickup and deliveries and quick turnaround times. This affects all parties to a shipment... buyers, vendors, carriers and processors. For instance, moving fresh food requires faster, more efficient processing to prevent spoilage.
JM: Collaboration extends to tracking trailer temperatures from origin to destination, incorporating this data into the TMS for effective management of both inbound and outbound logistics.
GE: Challenges are similar across segments: controlling costs, efficient planning and vehicle access. But with fresh produce, for example, there are smaller, more frequent deliveries, which leads to tighter planning and increased complexities. Beverage delivery companies face vehicle access issues, such as unloading into a pub on the corner of a street versus backing into a supermarket loading dock. Different temperature regimes in mixed loads and dispatch smoothing are significant. Larger companies use routing technologies to handle scale, while smaller companies that rely on spreadsheets can gain significant benefits from using routing software.
We explored how food and beverage distributors address these challenges, particularly in terms of sustainability and environmental, social and governance (ESG) compliance. Our experts highlighted strategies to support sustainability initiatives and ensure compliance with ESG standards.
Q: How are food and beverage distributors addressing issues related to sustainability and ESG compliance?
JM: Sustainability requirements are increasing, with customers needing to measure and report emissions accurately. This impacts their ability to win business. You need to be able to collect and report data, enabling meaningful discussions with customers on sustainability. This is crucial as customers are increasingly being pressured to align with vendors who can demonstrate low emissions and provide accurate reporting.
In terms of requirements for emissions and ESG, it’s a very difficult measurement to gauge, and everything goes back to data. Your ability to measure emissions accurately and meaningfully could make the difference in whether or not you are awarded business from a customer. They’re getting pressure to align themselves and collaborate with vendors who can tout a low emission and report on it. If you can’t report on it, then you’re probably not in the game. Our challenge as a TMS provider is to collect all that data on behalf of the shipper and enable them to report accurately so they can get involved in meaningful discussions with customers on winning business.
RH: Environmental considerations are becoming more important, though measuring CO2 accurately is still challenging. Our technology enables detailed measurement, leading to meaningful conversations and improvements. Collaboration and data sharing are key to achieving sustainability goals. However, there is a challenge in implementing these measures due to the variability and complexity of transport operations.
GE: It’s also important to recognize the simple fact that sustainability is not always the main objective for customers but is considered important. Reducing fuel usage and carbon emissions through efficient planning is valued. However, cost savings and operational efficiencies are often higher priorities. Customers are interested in minimizing carbon emissions through more efficient planning, but their main objective is usually cost savings. Efficient plans can still be improved to reduce carbon emissions, for example, by reversing the route to deliver the heaviest loads first, they can reduce fuel usage and emissions.
John Mead on Managing Uncertainty
“Transportation is a high-variability industry. You have instances where you must manage by exception, because something’s inevitably going to go wrong. And it’s by using purpose-built technology that you can manage those instances as effectively and efficiently as possible.”
Q: What measures are food and beverage distributors taking to build greater supply chain resilience in the face of ongoing global disruptions and uncertainties?
RH: Data visibility and effective collaboration means businesses must move away from spreadsheets and manual processes. Businesses are focused on pursuing efficiency gains—doing more with less, filling vehicles rather than shipping empty or half-empty vehicles, getting the right carrier for the right lane, paying the right price and having flexibility to cope with peaks and troughs without a cost penalty.
JM: Absolutely, Rob. I’d emphasise in particular that building supply chain resilience requires flexibility and adaptability. Companies need to be prepared for unexpected challenges and have contingency plans in place to ensure continuity. This might involve diversifying suppliers to reduce dependency on a single source or increasing inventory levels to buffer against supply chain disruptions.
JE: I think it’s worth nothing that operational efficiencies, achieved through automation and collaboration with customers, enhance brand loyalty and satisfaction. Automating processes reduces manual intervention, which allows for faster, smoother operations.
GE: Another key measure is investing in advanced analytics and artificial intelligence (AI) to predict potential disruptions and allow companies to respond proactively. This helps in maintaining supply chain resilience by anticipating issues before they become major problems.
“Building supply chain resilience requires flexibility and adaptability. Companies need to be prepared for unexpected challenges and have contingency plans in place to ensure continuity.”
John Mead, Sr. Solutions Consultant
Speaking of artificial intelligence (AI), such technological innovations merit investigation when it comes to enhancing operational efficiency and resilience. We explored emergent technologies’ roles in the food and beverage distribution industry with our experts and how these technologies can optimise various aspects of supply chain management.
Q: What role do technological innovations such as AI and automation play in enhancing operational efficiency and resilience for food and beverage distributors?
RH: A lot of folks are moving towards automation right now, where humans are involved at the review stage of the process.
GE: AI and automation play a significant role in enhancing operational efficiency. AI can optimise route planning and decision-making, leading to better resource utilisation and cost savings. Automation helps streamline processes, reducing manual intervention and improving overall efficiency.
RH: We’re looking at ways for AI to help with all of these efforts. There’s a lot of talk going on, and I see that there’s a lot of usage that could be within our software specifically for the food and beverage industries. It’s all about getting better routes in the first place, learning from the algorithm and learning from the results coming out every day.
JE: AI relies on data learning. Without good data and defining how act on this data AI can’t function, it must be taught first. Many businesses starting implementing AI to automate simple tasks or decisions, but due to the critical nature of transport, full AI-driven transport is a journey, and proper systems and decision trees are needed to refine the AI process.
Cloud technology offers numerous advantages for modern businesses, and food and beverage distributors are no exception. We discussed the current rate of cloud adoption and the transition from disjointed solutions to integrated cloud-based systems. One thing is for sure: the ability to access data from anywhere and the enhanced scalability offered by cloud solutions are essential.
Q: What is the current rate of cloud adoption among food and beverage distributors, and how are companies transitioning from disjointed solutions to integrated cloud-based systems?
GE: The convenience and efficiency of cloud-based systems allow for better data access and management across departments. This shift is crucial for integrating various aspects of transportation and logistics operations.
RH: On-premises systems created islands of data, hindering collaboration. Cloud-based platforms offer scalability, security and collaboration.
JM: Agreed. Cloud efficiencies are undeniable, and we’re heading in that direction. Customers now insist on SaaS for their end-to-end business architecture.
RH: The food supply chain, from packaging to raw materials, understands the importance of SaaS TMS, even more than some other verticals. For example, automotive, once a trailblazing sector, now lags behind due to lack of investment.
“On-premises systems created islands of data, hindering collaboration. Cloud-based platforms offer scalability, security and collaboration.”
Rob Hutton, Sr. Account Executive
As previously mentioned, data plays a crucial role in modernising operations decision-making for food and beverage distributors. Our experts dived a little deeper into how you can utilise data to address various challenges and improve efficiency across the supply chains.
Q: How are food and beverage distributors leveraging data to improve operational efficiency and decision-making?
GE: Data is really important in planning as efficiently as possible and controlling costs. For example, in our software, we can compare real-time versus planned performance, which helps in improving future plans. The data helps in understanding actual unloading times at different stores and can be used to make plans more accurate.
JM: Data helps you see the changes and disruptions as they begin so you can be more resilient to them. But if you don’t have the right systems, processes and people in place, it’s very hard to react in time.
RH: Yes, absolutely. I completely agree with these points. One of the real value-adds our customers mention post-implementation is how internal service performance improves. With everyone looking at the same data, they can have meaningful conversations. This eliminates arguments like “My spreadsheet says X” versus “My number is Y.” So, yes, I definitely concur.
Data helps you see the changes disruptions as they begin so you can be more resilient to them.”
Sr. Solutions Consultant
Gareth Evans on the Benefits of Digital Transformation
“Many of our customers are scared of change, but the truth of the matter is, you can only go so far with a spreadsheet. If you want to save costs and improve efficiencies, you have to have a system to help. We often find efficiencies when moving companies from spreadsheets to our systems. We consistently deliver better results. For example, by running historical data through our systems, we can show clients how we would have done better and found efficiencies they missed.”
“Real-time data analytics will also become more prevalent.”
Gareth Evans, Manager of Solution Consultants
To gain a deeper perspective on the future of the food and beverage distribution industry, we asked our experts about emerging trends and technologies that will have a significant impact in the coming years. They highlighted the power of automation in driving efficiency and the shift to faster food, just-in-time demands, as well as the ongoing importance of sustainability initiatives.
Q: What does the future look like for food and beverage distributors?
RH: Automation. More automation. We’ve got examples where teams that managed processes with 35 people are now down to seven or eight.
GE: Agreed. In the future, people will expect everything to be more automated. Look at what leading online sellers have done—they start with 100% total automation and then cut back until they have some human intervention. The future will likely see systems planning automatically, producing routes and dispatching orders with minimal human input. AI will learn from daily operations to continuously improve efficiency.
JE: I’d also note that as the quality of products goes up, there’s going to be more of a focus on how the product was sourced, produced and its sustainability. You’re already starting to see a lot more preservative-free, chemical-free, ingredients- conscious... fresh foods. When you have fresh meat versus frozen meat, it changes the dynamics of transportation greatly. You’re committed to delivering food faster in smaller quantities because a restaurant won’t hold tons of fresh food; it’s almost like just-in-time inventory.
RH: Another aspect is sustainability. Companies will be pushed by regulatory requirements and consumer demand to adopt technologies supporting sustainability initiatives. For example, investing in electric delivery vehicles can help reduce emissions and comply with stricter environmental regulations.
GE: Real-time data analytics will also become more prevalent. This technology can provide immediate insights into various aspects of the supply chain, allowing for quicker decision-making and more agile operations.
In the face of these challenges, food and beverage distributors must leverage advanced technologies and strategic planning to remain competitive. A robust TMS is essential for optimizing operations, reducing costs and enhancing overall efficiency. By adopting innovative solutions and continuously improving processes, food and beverage distributors can overcome obstacles and achieve long-term success.
Accelerate Your Success With Aptean
At Aptean, we lead the industry with our comprehensive, purpose-built suite of transportation and distribution solutions. Our solutions are stable, secure and scalable, enabling you to accelerate innovation and access cutting-edge technologies and services. By leveraging our expertise and advanced technologies, you can streamline your operations, enhance decision-making and build greater resilience in their supply chains. Scale resources up or down to accommodate your needs, ensuring your business is always positioned for growth.
We’re proud to offer a complete software ecosystem that automates your processes, enhancing efficiency, profitability and growth. Our purpose-built systems include:
› Aptean Food & Beverage ERP:
An award-winning, cloud-first ERP built on the Microsoft Dynamics 365 Business Central platform, tailored for all sub-verticals in the food and beverage industry.
› Aptean Transportation Management System (TMS):
A comprehensive suite of solutions offering functionality for carrier rate shopping, freight management, third-party logistics, supply chain visibility and more.
› Aptean Routing & Scheduling Paragon Edition: Route optimisation software designed to enhance fuel efficiency, reduce vehicle wear-and-tear and improve delivery efficiency.
› Aptean Home Delivery: A solution built to help your business strike the balance between service and efficient routing by offering tailored time windows and tracking all customer interactions
› Aptean Electronic Proof of Delivery (ePOD): Mobile-friendly software designed to automatically capture delivery photos and signatures, streamlining the last mile and improving first- time delivery success rate.
› Aptean Business Intelligence: A powerful analytics solution powered by machine learning, providing actionable insights to improve KPIs.
› Aptean Electronic Data Interchange (EDI): Software that integrates with your ERP to digitise and streamline data transfers and business communications.
Are you Ready to Learn More?
When it comes to food and beverage software, Aptean is more than just a provider. We’re your long-term partner, dedicated to achieving success together.
For more information on how Aptean can help you succeed, contact us today or request a personal demo.
Aptean is one of the world’s leading providers of purpose-built, industry-specific software that helps manufacturers and distributors effectively run and grow their businesses. With both cloud and on-premise deployment options, Aptean’s products, services and unmatched expertise help businesses of all sizes to be Ready for What’s Next, Now®. Aptean is headquartered in Alpharetta, Georgia and has offices in North America, Europe and Asia-Pacific.
To learn more about Aptean and the markets we serve, visit www.aptean.com.
