Logistics serves up solutions to F&B industry challenges
February 23, 2023
Consumer demand and expectations have upended the food and beverage supply chain, with global economic concerns and geopolitical instability adding to the challenges. Yet it’s still possible for food and beverage businesses to increase cost efficiency and improve data management and inventory visibility, all while delivering on environmental and sustainability goals — with the right partner.
It’s why leading food and beverage brands are turning in droves to expert logistics partners that offer increased capability and agility to help their businesses scale efficiently and at speeds that otherwise would be out of reach.
Let’s take a closer look at the top three challenges facing the industry and what steps food and beverage businesses can take to solve them.
Cost efficiency remains imperative
Brands are under pressure to manage expenses in every aspect of their business. Labor, real estate, utilities and inventory management are especially important for maximizing cost efficiency on the logistics front, and it’s clear that inflation and wage growth have amplified existing challenges.
Logistics providers can help brands save big. Businesses can significantly reduce costs by leveraging multi-user warehouses equipped with modular technology, starting-up new operations faster and more smoothly. This allows companies to capitalize on the cost benefit of only contracting the necessary warehouse space and labor while taking advantage of additional services that would be out of reach without scale.
For example, we helped one of our growing food and beverage customers to:
- Increase throughput by more than 300% over three years by driving efficiency through innovative warehousing processes
- Reduce costs via shared facilities with dedicated operations in strategic locations
- Build in room for expansion
Implementing automated warehouse technologies can also streamline labor and drive efficiencies. Not only can companies increase productivity by eliminating repetitive, time-consuming tasks, but they also can reduce physical demands on workers, improving safety and helping to attract and retain talent, by increasing automation. Whether operations are fully automated or simply leverage modular technology to solve specific challenges, automation can be a real game-changer.
With intelligent automation, we have helped customers achieve:
- 4-6x productivity improvement with team members supported by robots
- 5x more items shipped year-on-year using automation
- 30% average reduction in employee turnover
Waste reduction and recycling matter now more than ever
Every industry has unique environmental and sustainability challenges. More than 30% of global greenhouse gas emissions stem from agri-food systems — that’s 18.7 billion tons of carbon dioxide equivalent.1
Although transportation gets the lion’s share of headlines for food and beverage GHG emissions, waste and poor recycling have a significant impact as well. Logistics partners can step in to deliver dramatic improvements. The right technology deployed in the right way can:
- Divert waste from landfills. GXO’s network diverts 79% of waste globally
- Boost recycling efforts. In the UK alone, GXO has helped its customers recycle 690,000 tons of waste packaging per year
- Reduce shrinkage and food inventory inefficiency. Warehouse automation and tracking technology improves order management, fulfilment accuracy and inventory turnover — which can deliver up to 60% reductions in inefficiencies
For one global brand, we designed a fully automated warehouse to meet their ambitious ESG goals to reduce energy and water consumption and CO2 emissions.
The environmentally friendly solutions include:
- An efficient ammonia refrigeration system
- A lighting system comprising 100% low-energy LEDs
- A rainwater harvesting system to fulfill some of the site’s water needs
- Operational design and processes ensuring economy of movement, reducing emissions and fuel consumption
Data management and visibility to deliver a critical competitive advantage
Many companies in the industry have yet to take full advantage of data management and traceability opportunities, whether that’s because they don’t have the right technology to capture the information or they’re struggling to make sense of the mountains of data amassed across the supply chain.
Specifying the right technology to manage your logistics operations is vital and logistics partners are there to support that journey. Our data scientists help to compile and parse data to derive actionable insights, allowing brands to make decisions with the help of predictive analytics and historical analysis.
The resulting visibility goes far beyond mere data availability — it allows brands to:
- Maximize team productivity
- Optimize inventory
- Spot opportunities to improve efficiency
At GXO, we helped one restaurant chain:
Scale from 1,700 to 2,700 locations without compromising traceability and tracking
Implement integrated solutions across 5,900 product lines
Manage all inbound supply, including forecast and demand analysis, product ordering and budget management
Deploy technology for real-time supply management, events-based stock forecasting and live delivery tracking
A holistic approach, combined with the right technology such as lot-code and date-code tracking, also ensures that food and beverage products are handled safely and properly across temperature zones and throughout transport — for regulatory purposes and the safety of the end consumer.
An expert logistics partner can help better manage disruption and overcome current and future supply chain challenges — unleashing potential for growth.
Integrating a new partner into supply chain operations may feel risky — the more variables, the more opportunity for things to go awry. But the right partner can quickly implement custom solutions, delivering rapid results.
With over 50 years’ food and beverage experience and a network of over 970 global distribution centers, including over 150 dedicated food and beverage sites, GXO understands the dynamics and challenges affecting this sector. We work in partnership with companies globally to deliver end-to-end solutions designed to optimize the supply chain, meet seasonal and organic spikes in demand and overcome future challenges.
Customers trust us to deliver results and leverage our scale and expertise to advance their operations through network optimization, technology deployment and continuous improvement.
The industry is experiencing rapid change — and partners like GXO are a proven way for food and beverage businesses to capitalize on the opportunities change presents. GXO can help tap hidden potential, working with companies to create innovative, bespoke solutions faster and at scale.
Read success story: Delivering results for a food and beverage brand with next-generation automation
1 Tubiello, Flammini, Kari, and Laryea, “The share of agri-food systems in total greenhouse gas emissions,” Food and Agriculture Organization of the United Nations, 2021.