Managing “Farm-to-Fork” Supply Chain: Are Distributors the New Catalysts in the Equation?
The manufacture and sale of food is one of the largest and most widespread operations across the planet. The fact that there is a wide variety of ingredients, constantly evolving customer and consumer demands & requirements for highly customized offerings, establishes a very complex landscape. The food ingredient manufacturers are always on the lookout for increasing opportunities, so that they are able to align themselves with the evolving trends, and hence crave to be closely associated with their customers. However, in some cases, due to regional and/ or economical limitations, the manufacturers depend immensely on distributors. Food ingredient distributors have always had a very critical position across the food industry value chain. Nevertheless, in the rapidly changing food and beverages space, the distributors have been adapting and now have for themselves a niche position, by providing added value services for their small and/or localized customers. This in turn, could pose a challenge to the growth of the food ingredient manufacturers, as the presence of such distributors could potentially change the dynamics of the food ingredients value chain and tip the scale towards their favor.
Food Ingredient Distributors and their Increasing Presence in the Value Chain
Modern consumers demand a variety of both local staple foods and exotic foods, and they expect products from either category to always be of the highest quality, affordability and safety. In response to this ever-growing demand, the ‘farm to fork’ food supply chain has grown and now involves many types of organizations and influence the success or failure of supplying safe, wholesome food to consumers. There is a range of high and low risk factors in the supply chain, due to multiple factors including distribution by sea, rail, road, or air, and the diversity of ingredients, end products and processes. With so many variables, ensuring effective supply chain management has developed into a challenging process.
Food ingredient distributors are a vital component of manufacturers’ marketing strategies —a means to reach small customers or those that are difficult to serve economically, in an increasingly competitive market. The best distributors have deep market insights and the capability to create real value, both for manufacturers and customers.
The business environment today makes it imperative for food ingredient manufacturers and distributors to continually improve their value-added services. Today we move between domestic, regional and global supply that’s increasingly complex. Customers, consumers, journalists, Non-Government Organizations (NGO’s), shareholders and investors are interested in your supply chain and how it’s managed against quality, safety, environmental and social issues.
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Author:
Sreedevi K, Associate Consultant