A New Era for Fast Food Restaurants & Supply Chains

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The meaning behind the term “fast food restaurant” is just as it sounds – restaurants that prepare food quickly and easily for customers, often in a drive-thru layout, fall under this category. Common examples include McDonald’s, Burger King and Wendy’s. These three establishments have been popular amongst consumers for years – whether it’s a parent grabbing dinner for their kids after a long day at work or a quick stop in the middle of a long road trip, these restaurants have delivered.

Despite its immense success in the traditional fast food format, Wendy’s has started exploring other options to better connect with their consumers. Mobile order and delivery are huge trends within the industry right now, both of which the fast food chain has kept up with. Their U.S. digital business grew to be 7.5% of sales in Q1 of 2021, up from 6% the previous quarter. Wendy’s attributes this to a shift in consumer demand. 

The pandemic has left many consumers in search of convenient, off-premise experiences. In response, Wendy’s has started redesigning its stores and even designing some locations that are drive-thru only. Equipped with ample outdoor seating, this type of store will make it much easier for customers to pick up mobile orders and delivery drivers will be able to move in and out of the line even faster.

To accommodate the growing number of delivery orders even further, Wendy’s is starting to implement “ghost kitchens”. The term refers to fast food restaurants that don’t have a dining room or a way for customers to order in-person and take their order home. Ghost kitchens exist to support delivery orders placed online, which are a significant part of the chain’s digital business growth so far this year.

While the thought of a Wendy’s where it’s impossible to order food seems unusual, it has the potential to speed up delivery times and drive down cost in some locations. Areas that have a high volume of online delivery orders can benefit from a store focused strictly on meal production. By eliminating the need for a dining room or outdoor patio, the chain reduces the amount of space necessary for construction and saves a significant amount of money. Popular chains including The Halal Guys, Sweet Green, and Chick-Fil-A have also partnered with the leading ghost kitchen brand, Kitchen Unlimited, to offer delivery out of a shared commercial kitchen.

Wendy’s continues to identify and incorporate different location styles into its operations. However, the chain never picks one style to go with and gets rid of the other options. While a uniform experience used to be more important than anything for restaurants, the latest shift in consumer demand has them more focused on meeting the customer where they’re at. It’s more important for the restaurant to fit whatever environment the consumer happens to be in rather than consistency in style and appearance. 

Consumers are focused on convenience and simplicity, so much so that even fast food restaurants are starting to explore ways to fit the latest mold. As the number of restaurant styles and online order volume continues to grow, supply chains will have to work extra hard to keep up with varying inventory and resource needs!

The Future of Shopping for Groceries

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This past year has brought on a number of changes regarding the “typical” way of doing things. One of the biggest changes has been how we shop for groceries. Grabbing a shopping cart and filling it with fresh produce, fruits and vegetables has been the way the world buys food for a long time. However, the pandemic has made consumers uncomfortable with this method as it can be time consuming and involve crowds. Grocers have taken this opportunity to explore automation and online shopping within their stores.

The Rise of Online Grocery Orders

While some grocery stores had rolled out online shopping programs prior to the pandemic, they drastically increased in popularity as a result. Shoppers can fill their carts online, pay and either pick up their purchases or have them delivered. For many shoppers, reducing or completely eliminating their time spent in grocery stores is worth any additional cost. According to industry data, the adoption rate for online grocery shopping has exploded. Consumers who use this method once or twice are 80% likely to come back and place another order.

The demand for online grocery shopping is beginning to outweigh the number of employees available to support the initiative by assembling orders. As a result, popular grocery stores like Walmart, Kroger and Albertsons are starting to invest in high-tech solutions involving robots packaging these orders for them. Some stores already have robots walking through aisles and taking inventory data. 

Make Way for Fully Automated Grocery Stores

Robots able to package online orders are just the beginning of automation in grocery stores. Urbx is a startup company that’s planning on building a grocery story with an automated fulfillment system called Urbx Market. Construction of its first location in Boston will be finished by the end of 2022. Instead of containing product aisles and a service department, Urbx Market will have ordering kiosks for customers to use and robots that deliver orders within minutes. 

Consumers value an in-store shopping experience because they are able to see, smell and even touch products before purchasing. However, the pandemic has changed things and quick fulfillment with limited contact has become more important. This change in mindset made way for entirely automated grocery stores like Urbx Market. Shoppers will be able to select, purchase and receive their quality products faster than ever before. Thanks to the elimination of costly, manual processes, these quality products will be available at consistently low prices. 

The implementation of advanced technology in grocery stores is just beginning. Robots have already started improving operational efficiencies and will expand as more brands invest. With one of the first fully automated grocery stores set to open its doors at the end of next year, it’s safe to say that the future of shopping for groceries is on the fast track for change!

How Plant-Based Protein is Shaking Up the Food Industry

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When most people think of plant-based proteins they picture products like tofu and veggie burgers. However, the plant-based foods industry has started to move towards products that look and taste like meat without any animals involved. These new options are being advertised as a healthy and sustainable alternative for those who choose not to consume meat in addition to those who do.

Plant-based versions of burgers, sausage patties and chicken nuggets created to taste like the real thing are starting to appear in most grocery stores. More recently, they have started to gain traction and appear on the menus of popular restaurants and fast food chains. Technomic Ignite menu data predicts that plant-based proteins will grow 35% on menus by the end of 2022. Their rise in popularity can be credited to a change in consumer perspective. Plant-based proteins are largely recognized as an alternative for vegetarians, vegans and other lifestyles that choose not to consume meat or animal products. While this still holds true, growing sustainability concerns have consumers outside of these lifestyles picking plant-based options off of the menu. Meat consumption is a major contributor to environmental damage and consumers are in search of another option that tastes just as good. Companies like Beyond Meat and Impossible Foods are working to provide a solution.

McDonald’s recently announced its three-year deal with Beyond Meat, making them the “preferred supplier” for the meatless burger in the McPlant. The two companies plan on exploring and co-developing other plant-based items like chicken, pork and eggs. Beyond Meat also has partnerships with PepsiCo and Yum! Brands, the parent company of KFC, Pizza Hut and Taco Bell.

Tesco, a grocery and general merchandise retailer based in the U.K., pledged to increase its sale of plant-based proteins and meat alternatives by 300% by 2025. To reach their goal, Tesco plans to make these products more available, affordable and visible to shoppers who visit their stores. Tesco will also be working directly with their suppliers to bring new plant-based innovations to customers.

What this Means for Supply Chains

The popularity of plant-based proteins and other alternatives have disrupted the global meat industry in a way that traditional burger companies did not expect. Before plant-based options became popular, burgers made of meat did not have a competitor.  As demand launches meat-free alternatives out of grocery stores and into restaurants all over the country, plant based proteins and their supply chains have their work cut out for them.

As the plant-based protein industry continues to expand and create new products, companies will need to rely on their supply chains to keep things running smoothly!

 

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The Turkey Day Supply Chain in 2020

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The holiday season during Covid-19 means smaller gatherings and changes to long-standing traditions for many families. Healthcare professionals are recommending everyone stays home and stays safe for Thanksgiving this year. Regardless of any changes in plans, there’s one thing that will be at the center of most families’ tables – turkey.

A grand total of 46 million turkeys are eaten for Thanksgiving every year. Research has shown that the average cost of this year’s Thanksgiving dinner is the lowest it’s been since 2015. Turkey prices are 7% lower than they were last year at $19.39 for a 16-pound bird, equating to $1.21 per pound. A Thanksgiving meal for 10 people including classic dishes like turkey, stuffing and pumpkin pie costs about $46.90, which is 4% less than last year.

Lower prices can be attributed to the fact that a significant number of people are staying home and cooking their own meals because of the pandemic. More people buying ingredients involved in signature Thanksgiving dishes is good news for many companies, but those who handle turkeys are in a unique predicament.

The “ideal” Thanksgiving turkey typically weighs between 28 to 30 pounds. Distributors were used to operating under the assumption that the best turkeys were the biggest ones. For many families, this rang true. However, as this year’s gatherings downsize, so does the weight of the ideal turkey. The majority of Thanksgiving shoppers are in search of smaller turkeys, making them seemingly impossible to find. 

The entire supply chain is affected as consumers, butchers, meat suppliers, grocers and chefs are left scrambling to secure smaller birds. Some consumers don’t mind cooking a larger turkey because it means plenty of leftovers for sandwiches the next day. To accommodate smaller gatherings that aren’t interested in leftovers, butchers are breaking down large birds and selling parts individually or in smaller bundles. 

Households who don’t want to cook their own turkey regardless of its size are turning to restaurants. To capitalize on the change of pace for this year’s celebrations, restaurants are offering traditional meals that can be ordered in advance for individuals or small households. Those who either don’t want to cook or are unable to cook can still enjoy the classic Thanksgiving meal they know and love in the comfort of their own home.

The circumstances around this year’s Thanksgiving are unusual, but there are still plenty of options in terms of securing the perfect turkey. The key to making sure your table is filled with all the classics is planning ahead. Shop for popular ingredients early and don’t leave anything for the last minute! Place an order for a turkey as soon as you confirm how many people will be at your dinner table and remember it’s never a bad idea to have leftovers!

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Flexible Food Distribution and Restaurant Business Models

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Covid-19 has left restaurants and food distribution companies scrambling to stay afloat. Many are straying away from their traditional business models to keep their companies from going under. The food distribution industry is already expecting to take a $110 billion loss for a year which is a third of their 2019 revenue. The industry lost somewhere between 60% – 90% of their sales in April.

Changing Rules and Regulations

Guidelines for restaurants and food distribution companies looking to operate in the midst of the pandemic vary by state, but they all agree that smaller crowds limit the chance of exposure. Restaurants are advised to limit the use of shared items like condiment bottles, salt shakers, menus and avoid pre-setting tables with silverware.

Regardless of steps being taken to make dining out safer, many people still aren’t comfortable with the idea of going out again. A survey by the Democracy Fund and UCLA Nationscape Project found that only 50% of respondents feel comfortable going out to eat. Restaurants are getting creative in an attempt to change this statistic by setting up patios for outdoor eating, launching new menus, offering cocktails to-go and creating QR codes to allow guests to view their menu online.

Changes to the traditional food distribution and restaurant business models demand a change from their supply chains in return. Many restaurants and food distribution centers had to shut down for a period of time when Covid-19 began to spread. Pausing a company’s supply chain altogether is expensive and leaves products at a standstill. Restarting a supply chain, especially when perishable goods are involved, can be just as costly. Food distribution companies and restaurants were left to find a way to continue to operate under these new circumstances. Here are a few examples of how companies are making it work:

How Traditional Business Models are Responding

Restaurants Become Grocery Providers and Distributors

The Cork and Barrel Wine Bar in Zionsville, Indiana is one of the many businesses that temporarily shut down as a result of Covid-19. Rather than wait until they were allowed to resume business as usual, owner Sarah Hine transformed the bar into a delivery business and mini grocery store.

The restaurant partnered up with Piazza Produce, a wholesaler in Indianapolis that was also looking for a way to keep their operations moving in the midst of Covid-19. Together, the companies produced consumer-sized quantities of products that people needed but were struggling to locate at the grocery store. They began doing 30-40 deliveries a day and while it didn’t replace the business lost, it helped the Cork and Barrel Wine Bar and Piazza Produce keep their doors open.

Both businesses were fearful of not being able to re-open should they have to close their doors. While shifting to a delivery model changed the stock and supplies they needed for operations, it prevented them from having to press pause on their supply chains altogether.

Deli Counters Utilize Grab-and-Go Method

Many deli counters initially responded to the pandemic by shutting down because they were unsure of how to operate. However, deli meats are convenient and easy to snack on – two qualities that are especially important to consumers during the pandemic. To meet rising consumer demand, deli counters are starting to pre-package popular products. While Covid-19 has made it uncomfortable for customers to stand in lines or crowds, they are more than happy to adapt to a grab-and-go method for their favorite deli meats.

While retail food and beverage companies have always needed to remain nimble to respond to changing customer demand, the pandemic has forced many to rethink their supply chains in order to stay open. Having a flexible supply chain that is able to adapt to a changing environment ensures that companies that need to rethink their business models can do so and continue to thrive even after economic hardships like the Coronavirus pandemic.

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Unique Challenges Facing Food & Beverage Supply Chains

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Food and beverage companies produce and distribute essential products every day. The Covid-19 pandemic has resulted in food shoppers buying supplies for a longer period of time (ex. shopping for 2 weeks at a time instead of 1) and purchasing products such as toilet paper, paper towels and disinfectant wipes in bulk. Practicing new skills like baking banana bread and sourdough bread have become popular ways to pass time. A recent study by Acosta revealed that 50% of respondents are spending more on groceries than they did pre-pandemic. Below are just a few of the elements challenging food and beverage supply chains as they race to keep up with heightened consumer demand.

Temperature Control Needed for Freshness

Not all products are able to travel in a standard truck responsible for the delivery of many different types of freight. Some food and beverage products must be stored at a specific temperature. Failing to meet the optimal conditions can result in the degradation of the quality of food and render products unsellable. To meet the needs of these products, shippers have to use refrigerated trucks. Making sure that a temperature-controlled truck is available and able to fit all of the required products is an added process for logistics professionals to consider.

Products Sensitive to Expiration Dates 

Nearly all food and beverage products have an expiration date on their label. While non-perishable items offer more flexibility in terms of when they hit the shelves, products like fresh produce and vegetables are not as forgiving. Time-sensitive products must be moved efficiently to ensure they reach their final destination in a condition that’s prime for selling. Shoppers want fresh vegetables and produce that will remain fresh for a period of time even after purchasing. It’s up to food and beverage companies to make sure their perishable products are in the right place at the right time.

Rapidly Expanding Product Variety

Consumers are starting to gravitate towards healthier products made of fewer ingredients. However, they are not interested in compromising on taste. Manufacturers are constantly adjusting to consumer taste and preferences which creates a wider variety of products. For example, a product as simple as yogurt now dominates the refrigerated aisle of grocery stores to accommodate different flavor preferences and dietary restrictions (oat, almond and soy bases to substitute for dairy). With each new product comes new storage and transportation specifications, making it even more complex for supply chains to keep stores stocked.

How Technology Can Help Keep Food & Beverage Supply Chains Moving

Food and beverage businesses are juggling unique challenges within their industry and those brought on by Covid-19. Implementing technology like Kuebix TMS into their supply chains gives power back to the shipper and lightens their workload. With Kuebix TMS, food and beverage companies can rate, book and track their shipments in a single system. Kuebix TMS gives users complete visibility and control over their logistics operations, making it easier than ever to keep even the busiest supply chains moving. Real-time tracking information and detailed analytics empower shippers to improve their customer service and make better informed decisions.

Kuebix TMS Covid-19 Alcoholic Beverage Industry Blog Post

Beer, Wine and Liquor – The Alcoholic Beverage Industry During Covid-19

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Social distancing has redefined business operations and everyday life throughout the country. Companies are changing their traditional business models to adapt to rules and regulations put in place to keep customers safe. Those that remain open or are starting to reopen are adapting to significant changes in consumer buying habits. One of these significant consumer buying habits is an unexpected surge in sales within the liquor industry.

In comparison to last year’s sales, beer and cider purchases went up by 20% from March 29 to April 4. Packs of beer containing 24-30 beverages grew by 90% that week compared to the previous year, and ready-to-drink cocktails like spiked lemonades and seltzers increased by 106%. Everyone doing their part and staying home means no more refreshments at restaurants or bars. Aside from restaurants that sell craft or specialty beverages in addition to their food, stocking up at a liquor store has been the only remaining option for many looking for a drink. Liquor stores can expect to profit from this surge for a while – it’s going to take some time for all customers to be comfortable going into restaurants again once the lockdown has ended.

Not all branches of the liquor industry are experiencing a positive surge in business, however. Craft beer companies are hurting. A significant portion of their revenue is from being served on tap at restaurants. Without restaurants catering to sit-down clientele, they have to depend on liquor store sales. The number and variety of craft beers varies from store to store because they’re more expensive for retailers to carry and consumers to purchase. As a result, craft beer sales within liquor stores aren’t consistent. Experts say that majority of the 8,000-plus craft brewers in the U.S. don’t sell their product in grocery stores and can’t afford to produce larger cases. With so many consumers shopping in bulk to spend as much time home as possible, they are even less likely to pick a smaller pack of specialty beers.

Many breweries have the kegs they were supposed to distribute to restaurants and bars to worry about. Bell’s Brewery in Michigan reported that even though they have seen an increase in sales through stores, they are struggling to determine what to do about the 50,000 kegs – about 6.2 million pints – of their summer beer they were supposed to distribute. While packaging and selling the beer in 12-packs makes sense, bottles and cans aren’t easy to come by. Craft breweries still have to compete with larger beer manufacturers for supplies.

Companies experiencing a surge in demand can look to Kuebix to keep their supply chains running smoothly during Covid-19. Kuebix is offering 60-days free of our award-winning Kuebix Business Pro TMS to help companies battle through the pandemic. Its cloud-based TMS technology helps shippers expand capacity while successfully managing their supply chains remotely.

As the world adjusts to social distancing even as economies begin to open back up, it will be interesting to see how craft and specialty breweries entice consumers as liquor store profits continue to rise. Supporting these successful small businesses in this uncertain time is both refreshing to consumers and rewarding to the industry!

Super Bowl Food and Beverage Suppliers Retailers

Super Bowl LIV Will Be a Big Day for Food & Beverage Suppliers

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The Super Bowl is an unofficial American holiday – and like any good holiday celebrated in America, there will be lots of food and drink consumed in households nation-wide! In fact, Super Bowl Sunday is the second-highest food consumption day in the USA, right after Thanksgiving. Americans will spend an average of $81 dollars per person to celebrate. This means food and beverage retailers will have their work cut out for them to manage their supply chains and keep customers happy on game day!

This year’s Super Bowl LIV, the 54th Super Bowl, will decide the champion of the NFL’s 2019 and 100th season. The San Francisco 49ers will face off against the Kansas City Chiefs. Many football fans not located in New England are pleased that the New England Patriots will not be going to this year’s Super Bowl, the team having broken their own record for most Super Bowl appearances by any organization of all time in 2018!

Food & Beverages Consumed on Super Bowl Sunday

No matter who you’re rooting for, however, there are several food and beverage staples that will be served at Super Bowl parties everywhere. Common items include buffalo wings, chili, baby back ribs, dipping sauces, pizza, and potato chips. Beer will also be flowing, with popular brands including Bud Light, Budweiser, Corona, Samuel Adams, and Coors Light.

According to an article published by Men’s Fitness, Americans plan to drink 325 million gallons of beer on Super Bowl Sunday this year! In addition to all that beer, an estimated 28 million pounds of chips, 1.4 billion chicken wings, and 8 million pounds of guacamole will be devoured this weekend!

Chicken wings are the unofficial food of this unofficial American holiday. The National Chicken Council announced that chicken wing consumption will be up by 27 million units over last year’s Super Bowl! If you break this number down, that’s roughly 337.5 million chickens slaughtered for this one event (2 wings, a drumette & a flat in each chicken)! If all of these chicken wings were laid out end-to-end, there would be enough to circle the Earth 3 times!

 

Sustainability and the Supply Chain

Many Americans are opting for plant-based meat alternatives this Super Bowl. Trends like Dunkin Donuts’ Beyond Meat Sausage Breakfast Sandwiches and Burger King’s Impossible Whopper have forced meat-alternatives into the public eye. The supply chains of meat-based products are known to require more resources, including more water and fuel which can be expensive and harmful to the environment.

The impossible burger alone is purported to require “87% less water use, 96% less land use, 89% fewer GHG emissions, and 92% less dead-zone creating nutrient pollution than ground beef from cows.” For Super Bowl Sunday, many health and environmentally conscious football fans will be making buffalo cauliflower “wings” instead of traditional chicken wings. With plant-based meat alternatives and other substitutions becoming more popular, food and beverage retailers have the opportunity to save resources and win consumer loyalty by offering meat-alternatives.

How Food and Beverage Supply Chains Can Keep Up

Making sure that your customers have their game-day rations is a must for any food and beverage company that sees a spike during the Super Bowl. But staying ahead of increased shipping volume, not to mention any unforeseen winter weather events can be a challenge. By implementing technology like a transportation management system, any company that needs to prepare for the Super Bowl can smooth out their shipping process and get complete visibility throughout their supply chain.

Transportation management systems (TMS) eliminate operational inefficiencies while providing benefits to all parties. Customers, suppliers and carriers can collaborate on a singular platform with real-time tracking information and side-by-side rate comparisons to save time and money. This is especially important as for food and beverage companies, like those that sell chicken products, ahead of America’s unofficial football holiday!

 

3 Times Social Media Upended the Food & Beverage Supply Chain

3 Times Social Media Upended the Food & Beverage Supply Chain

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Social media has changed every industry and the supply chain hasn’t escaped unscathed. In fact, social media has been behind some of the biggest, and most well-publicized, disruptions in the supply chain over recent years. It’s a question of supply and demand. In the past, forecasters were able to rely on historical data to approximate how much of a certain product would be needed. Now, viral videos, tweets, and even memes can throw off those calculations severely by influencing customer expectations.

This phenomenon is particularly apparent for food and beverage supply chains that deal with hundreds of thousands of sales each week of products with short shelf lives. Huge upticks in sales on a particular product can disrupt production and test the agility of procurement and logistics teams to keep up. Below are three examples of times social media upended the food & beverage supply chain.

Starbucks Gets An Unexpected Endorsement

Early in 2019, Starbucks’ Cloud Macchiato got an endorsement on Twitter by Ariana Grande, a wildly popular singer, songwriter and actress. Grande tweeted about how much she loved the new iced drink and her fans, self-proclaimed Arianators, rushed to their local Starbucks locations to purchase their own.

Senior Vice President and Chief Procurement Officer at Starbucks, Kelly Bengston, recalled how the company hadn’t counted on the huge popularity of the drink brought about by Grande’s social media followers and fans. Speaking in regards to the increase in demand, Benston said, “It creates an amazing opportunity to test how agile your teams are… How do you get to business? How can you move it from store to store?”

The challenge for Starbucks lay in judging how much product was needed to satisfy fans while the Tweet was trending on social media while not overbuying to the point where there was wasted product. It’s a delicate balancing act that forecasting cannot fully take into account.

Rick & Morty Joke Presents McDonald’s With an Opportunity

Disney’s Mulan was released more than 20 years ago. To promote the release of the movie, which takes place in Han dynasty China, McDonald’s added Szechuan Sauce as a condiment option for their Chicken McNuggets. The sauce was a limited release and had been largely forgotten until 2017 when social media would resurrect it and disrupt McDonald’s supply chain.

After an episode of Adult Swim’s popular show Rick and Morty referenced the long-forgotten dipping sauce, the joke was turned into a meme that went viral across the internet. To capitalize on the social media presence, McDonald’s decided to bring the sauce back for a one-day promotion in limited quantities at certain locations. Fans purportedly drove across state lines and even from Canada to get their own Szechuan sauce experience.

Unfortunately, the popularity of the promotion vastly outweighed the amount of Szechuan sauce packets distributed to McDonald’s locations and thousands of fans missed out on the opportunity to participate in the “pop-culture phenomenon.” Furious fans took once again to social media to expound upon their disappointment and urge McDonald’s to bring back the sauce in a larger release.

Rising to the challenge, McDonald’s announced that it would ship some 20 million Szechuan sauce packets to stores in late February 2018. This curbed the social media debacle and ended with McDonald’s being able to satisfy their customers and earn back loyalty. Even though the Szechuan sauce joke in Rick and Morty was just a throw-away joke, it had real-world supply chain implications when it hit social media.

Twitter Feud Sparks a Run on Chicken Sandwiches

More recently, a Twitter feud between Popeyes and Chick-fil-A sparked a social media controversy about which retailer sold the better chicken sandwich. The controversy began in August 2019 when Popeyes introduced a new chicken sandwich item onto its menu. The sandwich was an instant success, even being ranked by Business Insider as the No. 1 fried-chicken sandwich. This prompted Chick-fil-A to tweet “Bun + Chicken + Pickles = all the <3 for the original.” Popeyes quote-tweeted it directly, adding “…y’all good?” and igniting a flurry of tweets by chicken sandwich fans nationwide.

Due to the huge social media attention it was receiving, Popeyes sold out of its new menu item in just two weeks after it was introduced. Supplying enough buns for all the chicken sandwiches the company was selling was a main issue. In a creative supply chain move, Popeyes launched a campaign called “Bring Your Own Bun” so that more sandwiches could be sold. The program encouraged guests to order the three-piece chicken tenders off the menu then construct the sandwich themselves.

Popeyes has announced that the sandwich would be returning to its 150 Popeyes locations in early November this year. In order to keep up with the production of the hugely popularized sandwich, Popeyes is adding an additional 400 employees. Up to two people per store will be solely designated to making the sought-after menu item going forward.

Can Supply Chains Stay Ahead of Social Media Trends?

Social media’s influence across the supply chain is a new frontier for most companies. It can be a challenge to react to unexpected endorsements (or negative comments) in a productive way. These stories about Starbucks, McDonalds and Popeyes can act as examples of how to handle demand shifts for other food and beverage supply chain companies. By seizing the opportunity to promote their brands, these companies were able to restructure their supply chains by increasing production, altering logistics, communicating with customers, and even adding staff. The key is to stay informed on social media trends and not be afraid to be flexible in the face of social media’s influence on customers.

Halloween Infographic Spooky Scorecard

Consumers Aren’t Scared to Spend Money on Halloween

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October is nearly over and that means Halloween is approaching, heralding the beginning of the holiday shopping season. Many supply chains have been preparing for months, some starting as early as January to prepare for the busiest shipping time of the year. Even if your company doesn’t supply or manufacture Halloween-related merchandise, it’s likely that you and your family will fuel the demand for products in some way. In fact, almost 70% of Americans plan to participate in Halloween celebrations this year. Whether you’re purchasing candy, porch decorations or a costume for your dog, few Americans escape the commercial aspect of this spooky day.

Halloween Shopping by the Numbers

The National Retail Federation (NRF) estimated that Halloween sales will top $8.8 billion ($86.27 per household). This year’s total is expected to be the third-highest out of the fifteen years the survey has been conducted. While the total amount spent hasn’t changed too drastically in the past few years, there’s a noticeable change in the motivation of consumers. Many purchases they make are influenced by friends, neighbors or celebrities on social media. Here are a few consumer statistics to consider as the season reaches its peak.

Kuebix Halloween Infographic

Balancing Supply and Demand

Most consumers know the type of candy, costume or decoration they want before going to the store. They expect retailers to be fully stocked to make the selection process as easy as possible and establish brand loyalty. This is especially important for Halloween staples like bite-sized candy to hand out and pumpkins for carving into jack-o’-lanterns. Consumers who walk into a grocery store or department store and don’t find what they’ve come for are unlikely to stick around to buy additional merchandise, resulting in lost sales and poor customer satisfaction. This lack of supply is bad for business.

The inverse is also just as detrimental for retailers trying to make a profit from Halloween sales. If retailers have forecasted incorrectly and have too much Halloween merchandise in stock, they will be left “holding the bag” and need to deeply discount merchandise in an attempt to sell it quickly after Halloween. This is particularly important for items with expiration dates that need to be off shelves quickly.

Demand planners should also keep in mind regional preferences. Running out of Skittles in California or Florida may be worse for customer satisfaction than in Massachusetts. Check out this interactive map from the CandyStore.com to see your region’s favorite Halloween candies.

Source:  CandyStore.com.

While some people look forward to the 75% off candy sales on November 1st each year, these sales are a result of inaccurate demand planning leading up to the holiday. Balancing supply and demand is crucial leading up to any retail holiday.

Where Are Consumers Doing Their Halloween Shopping?

Though this year isn’t anticipated to be a record-setting year in terms of overall sales (that record was set in 2017), the total amount being spent by Americans is still impressive. That means that consumers are opening their wallets with the plan to spend. However, having products for sale in the right locations is becoming more of a challenge for retailers and manufacturers. In order to capture customers, many companies are diversifying where they sell. Consumers now have many more options than traditional brick-and-mortar stores. They can shop online, at local grocery stores, at specialty stores, department stores and even at convenience and pharmacy locations. Retailers like Target and Walmart have expanded their online presence in order to capture customers that prefer to shop online.

In 2018, the National Retail Federation reported that 24% of Halloween shoppers who bought costumes or Halloween supplies did so online. While this number continues to rise, many shoppers still prefer to see what’s for sale in-store.

Don’t Be Frightened by the Halloween Shopping Season

Whether you’re a manufacturer, retailer or consumer, Halloween is a busy time of year for the supply chain. Stores become full of seasonal merchandise and consumers see advertisements and Halloween decorating inspiration on all sides. Hopefully, most companies have their logistics operations well in hand and are on track to meet customers’ needs without excessive leftover stock. If you’re planning to participate in any Halloween activities this year, we hope you have a spooky day!

Kuebix TMS Fall Seasonal Products

Seasonal Flavors Like Pumpkin Spice Add Complexity to Supply Chains Before the Holidays

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October is almost here and with it comes seasonal favorites such as apple cider, candy corn and pumpkin spice. With every brand that tries to stay on this theme comes additional supply chain complexities. The chaos of keeping up with consumer demand is already heating up despite holiday season still being a month away!

Data from Grubhub shows the three most popular months for pumpkin and pumpkin-spice-flavored dishes are October, November and September, respectively. Other flavors such as apple cinnamon, pear and maple grow in popularity around this time as well. The five states with the highest number of pumpkin-related orders are California, Oregon, Washington, Ohio and Utah.

While the most common forms of pumpkin treats are baked goods like cakes and cookies, nonconventional businesses are getting in the spirit as well. Spam launched its own Pumpkin Spice Spam this year and sold out within seven hours. Last year Buffalo Wild Wings offered customers a limited-edition pumpkin ale sauce to accompany their infamous chicken wings.

The most challenging part of pre-holiday season is making sure that inventory is in the right place at the right time. Companies who struggle with this face out-of-stocks and missed chances for sales. It can be difficult to predict which seasonal products will resonate with consumers and drive business. It’s important to be able to move product efficiently and minimize operational delays.

Visibility throughout the supply chain also allows shippers to provide accurate and real-time information to retailers and customers alike. Retailers will have accurate information about when they will be restocking and consumers will know when they can expect to receive their product. This additional information allows retailers to provide better customer service and leaves pre-holiday shoppers more satisfied.

Implementing technology into supply chains creates a smoother shipping process for all involved and provides complete visibility throughout the supply chain. Transportation management systems (TMS) eliminate operational inefficiencies while providing benefits to all parties. Customers, suppliers and carriers can collaborate on a singular platform with real-time tracking information and side-by-side rate comparisons to save time and money. This is especially important as retailers and distributors gear up for the busy holiday season and start introducing seasonal favorites like pumpkin spice flavors to store shelves!

The Biggest Supply Chain Challenge Facing Food and Beverage Companies

The Biggest Supply Chain Challenge Facing the Food & Beverage Industry

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Rising Customer Expectations Present Biggest Challenge for the Food & Beverage Industry

Changing consumer shopping habits and rising customer expectations are putting added pressure on the food and beverage industry. Shoppers are becoming used to having dozens of choices at their fingertips. Whether this is a choice between multiple flavors and varieties where there might have once only been, or the choice to purchase groceries online, at a traditional grocery store, in a convenience store, or any other location, there are more options than ever. This presents a big challenge for food and beverage companies that need to support more SKUs and deliver to more retail locations.

Consumers Are Demanding More Convenience From Their Grocery Shopping

Gone are the days when everyone made a single trip to their local grocery store to purchase the same list of weekly groceries. While some people still maintain this habit, it’s becoming increasingly common for people to shop for food at a variety of locations. Shoppers often want to grab a loaf of bread of a gallon of milk while they go about their busy lives. This means many different retail locations have the opportunity to draw in shoppers by offering an assortment of essentials. Convenience and pharmacy locations like CVS and Walgreens have jumped on this bandwagon, expanding their grocery sections to include more shelf-stable and frozen products. Big box stores like Target and Wal-Mart as also capitalizing on this trend.

Online shopping is growing in popularity across all industry and it’s no different for food and beverage. There are now hundreds of options for shoppers to order ahead to pick-up in store or at a special location as well as have groceries delivered directly to their door. This is not to mention to rise in popularity of meal subscription services which take the planning out of meal prep.

These new ways for consumers to shop for their groceries adds a new level of convenience, but also comes with many challenges for food and beverage supply chains. Instead of just delivering to the dock of routine grocery stores, now manufacturers have multiple lanes to multiple retail locations to fulfill. Juggling the increasingly complicated routing as well as inbound delivery restrictions can be a challenge for food and beverage manufacturers.

Consumers Want More Options than Just Chocolate or Vanilla

In years past, many common grocery items came in only one or two varieties. Soda came in one or two sizes and in standard flavors, yogurt was strawberry, vanilla or plain, and burgers were simple beef patties. Now, these and many other products and categories come in a multitude of flavors and options! When you walk into the dairy aisle of a grocery store these days, you’ll find yourself confronted by a wall of yogurt types. Soda comes in different sized containers and you can find diet options, natural and organic, and even foreign brands. Burgers have transformed from just simple beef patties to an entire food category of their own encompassing meat-free options, health-conscious choices, and even different proteins like chicken and mushroom.

Brand loyalty is also a fading trend. With the advent of the internet and easy ways to compare products as well as learn about new ones, shoppers are more willing to try something new or quite a brand that has disappointed them. As such, manufacturers are now constantly working to maintain their customer base and offer new and more exciting options.

While these new flavors and varieties cater to consumers’ new expectations and shopping habits, adding more SKUs to any product presents challenges for food and beverage manufacturers. Considerations like shelf-life and seasonality need to be factored in as well as where different products are manufactured. Instead of shipping a truckload of a few products from one location, manufacturers may find themselves shipping more LTL from multiple zip codes.

Keeping store shelves full also presents an issue for demand planning teams. Shelf space and backroom space are at a premium, meaning replenishment from the manufacturer needs to happen in smaller batches more frequently in order to keep shelves stocked. Consumers are more willing than ever to buy from a competitor rather than visit another store for the brand they prefer and this can be a risk for manufacturers with a growing SKU list.

How Transportation Management Technology Helps Food & Beverage Companies Face These Challenges

Food and beverage businesses have complex supply chains with many unique characteristics: tight margins, fresh products that may spoil, expiration dates on products, complicated inbound requirements and more. On top of these challenges are industry issues that center around the lack of carrier capacity, shortage of truck drivers and increased regulations and compliance requirements.

Getting the right volume of products at the right time, and at the right location, is no easy task. Visibility into and control of supply chain processes will allow food and beverage businesses to address rising customer expectations all while meeting business goals.

Transportation management systems like Kuebix TMS can help food and beverage companies face the challenges of increasingly complicated supply chains due to rising customer expectations. With features like rating, booking and tracking all from within a single system, any company can save countless hours and realize real, bottom-line benefits by comparing all their rates side-by-side. With added features like ERP integrations and collaboration portals, communication between systems and partners becomes seamless and issues can be avoided before they even begin. Dock scheduling and yard management features help manufacturers keep their supply chains moving so that products don’t spoil and products reach stores with the maximum amount of shelf life.

By incorporating technology into everyday operations, the food and beverage industry can address the challenges created by rising customer expectations, save time and improve their bottom lines all at the same time.

Kuebix TMS Sustainability Meat Alternative Labor Day

What’s Your Burger Made of This Labor Day Weekend?

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Beef burgers have been a summer barbecuing staple for generations of Americans. From Memorial Day to Labor Day families and friends will gather to share this favorite food in backyards across the country, not to mention year-long at many popular fast-food chains. The traditional beef burger is changing, however. Now, when you head to your neighborhood BBQ this weekend, you may find yourself with a wider selection of burger patty options than you expected.

Meat-free options, health-conscious choices, and other patty alternatives are currently trending with consumers. The $90B global meat market is facing disruption unlike anything it’s seen before, with new fake-meat products entering the market every day and consumers branching out from traditional beef products.

Here are a number of popular beef patty alternatives that you may find at your Labor Day barbeque this year.

Beef patty alternatives:

  • •     Fake-meat patties (Beyond Meat, the Impossible Burger, etc.)
  • •     Veggie burgers (MorningStar, Gardein, Dr. Praegers, etc.)
  • •     Mushroom burgers
  • •     Homemade black bean burgers

Why Are Beef Patty Alternatives So Popular?

According to FAIRR, a global network of investors addressing ESG issues in protein supply chains, “Alternative proteins, which include plant-based substitutes for animal-based foods, are expected to capture 10% of the meat market in 15 years and are now worth around $19.5 billion.” It’s easy to see that beef patty alternatives are popular, but the question still remains, why?

Sustainability

Consumers continue to place a heavy emphasis on sustainability, with 68% of US internet users citing product sustainability as an important factor when making a purchase. The Food and Agriculture Organization of the United Nations (FAO) reports that livestock supply chains account for 14.5% of all global anthropogenic GHG emissions, a number which includes the burning of fossil fuels worldwide. Many consumers are searching for a more sustainable way to continue to enjoy burgers without contributing as highly to global emissions.

Changing Diets

Changing diets are having an impact as well. You’ve probably heard about diet trends like Paleo, Low-Carb, Vegan, Vegetarian, Keto, and Low-FODMAP. These and many other diet types play a role in consumers desire for patty alternatives. Some diets focus on weight-loss, reduced-sodium content, eating more “whole” foods, eliminating allergies, improving digestion, and adhering to religious or personal ethics. Consumers are becoming used to having more options to choose from to fit their lifestyles and the burger industry is only the latest industry to see a great diversifying of products.

What Does This Mean for the Supply Chain?

Many large brands are jumping on the meat-alternative bandwagon, and this doesn’t just include burgers! Most recently, Burger King, KFC and Dunkin’ Donuts announced that they would be adding fake-meat products to their menus. Now, you can get a vegetarian Whopper, vegan fried chicken or a plant-based sausage breakfast sandwich. Conagra’s Gardein meat-alternative unit saw its share of the meat alternative market rise to 11% in 2018 from 6% in 2013. Not wanting to be left out of this lucrative market, Nestle is launching its own plant-based Awesome Burger this fall.

The surge in popularity of meat alternatives is having both positive and negative effects on the supply chain. In the short term, manufacturers are facing issues with production. In May, the Impossible Burger’s creator, Impossible Foods, was forced to hire a third shift for its production line and begin building a second line to double supply. Many brands have signed new contracts with food service companies which they may not be able to fully supply at first.

Some grocery chains are also struggling with where to shelve fake-meat products. Some have shelved Impossible Burgers and other meat-like options in the meat aisle, much to the confusion of some. Others are creating or expanding their vegetarian and vegan sections to accommodate new products. These short term problems are expected to slacken as production lines boost output, procurement teams become accustomed to a new category, and retailers adjust their offerings.

In the long term, meat-alternatives promise to be easier for supply chains. This starts with a reduction in the need for livestock which require their own complex supply chains to function. In general, plant-based products have fewer touch-points compared with meat-based products, meaning logistics teams will have fewer points to manage. Patties will also be easier to transport and have higher levels of food safety. Once the initial hurdle of transforming supply chains to accommodate new SKUs and product types is complete, this promises to be a new, lucrative industry for food manufacturers to compete within.

So, if you get to the grill this weekend and see more options than just the standard American beef patty, pick the one that works best for you and remember to have a great Labor Day weekend!

Grocery Food Supply Chain Kuebix TMS

Rising Consumer Expectations are Prompting Change in Food Supply Chains

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The food industry is no stranger to steadily rising consumer expectations and standards. It’s becoming increasingly normal for consumers to shop for food in a variety of ways. Whether they stop at the grocery store to grab a frozen pizza on their commute home, order delivery upon arrival, or subscribe to a delivery service, there’s no shortage of ways consumers are shopping for food. Customer loyalty also seems to be a thing of the past, with many shoppers jumping from brand to brand and flavor to flavor as the mood takes them. For food suppliers, this means getting their products into the hands of their customers whenever and wherever they want, making supply chain operations increasingly complex.

The “Food Anywhere” Trend

Supermarket prepared food departments have seen double-digit sales growth in recent years, and food delivery is expected to grow 12% every year for the next five years. This aligns with the ‘food anywhere’ trend, which challenges traditional ideas about availability and requires suppliers to conform to consumers’ notion that food should be able to be enjoyed anywhere at their convenience. Now, consumers expect to be able to purchase some traditional groceries at their local pharmacy, have pre-portioned meal kits delivered to their doorways, or order online for pickup at the location of their choice. Regardless of location, consumers expect their food to maintain the same quality and taste. Achieving this standard while keeping products in stock can be quite challenging for many food manufacturers.

Transporting food to local vendors for distribution is just as complicated as keeping up with all the final mile options consumers have come to expect. Trucking companies with food-grade truck assets must conform to extensive rules and regulations that ensure food is transported safely from one point to another. Even the smallest misstep can lead to degradation in the quality of the food and render products unsellable. Potential roadblocks to take into consideration include the distance being traveled, the temperature within the truck itself and the risk of cross-contamination depending on what products are being transported together. Drivers need to be aware of FDA, USDA, and DOT regulations in order to ensure products arrive at their destinations in a sellable and safe condition.

Healthier Alternatives

Manufacturers of prepared foods are struggling to meet demands for fewer, healthier ingredients while maintaining the same taste and texture customers expect. This can cause issues in the longevity of prepared foods, leaving products with shorter shelf-lives all while consumers are requiring more variety.  

However, change does come with reward – 73% of consumers are willing to pay more for a “clean label” product. Some food manufacturers have turned to individual quick freezing technology (IQF) to help achieve this standard while still retaining longer shelf-lives. This is a process that is growing in popularity because it flash-freezes products and preserves their nutritional value. The ice crystals created from IQF are small enough that they don’t rupture the cell walls of the products, extending shelf life and reducing food waste because consumers can cook in portions and keep unused leftovers frozen. This may be a compromise for food manufacturers and consumers who demand options, accessibility and health from their food.

Meeting Consumer Expectations With Technology

Food manufacturers have complex supply chains with many unique characteristics: tight margins, fresh products that may spoil, expiration dates on products, complicated inbound requirements and more. Getting the right volume of products at the right time, and at the right location, is no easy task. Visibility into and control of supply chain processes will allow food suppliers to address these challenges while meeting business goals. 

The best way to handle the complexity of transporting such intricately manufactured products is by using technology that provides complete visibility and control of supply chain processes like Kuebix TMS.  Food and beverage companies can use Kuebix TMS to seamlessly rate, book and track their freight. Through the direct integration of purchase orders from ERP systems into the TMS, companies can save time and improve order accuracy, ensuring that their customers’ growing expectations are met.