Are you curious about what the future holds for food processing and manufacturing? Look no further than 2023! As we approach this pivotal year, it’s important to take a look at the challenges, opportunities, and key takeaways that will shape the industry.
From new technologies to changing consumer preferences, there are plenty of exciting developments on the horizon. Join us as we explore the top trends in food processing and manufacturing for 2023 – you won’t want to miss out on these insights!
Introduction: Overview of Food Processing and Manufacturing
The U.S. food processing and manufacturing industry is a $1.1 trillion sector that employs more than 1.8 million workers in over 23,000 establishments. The industry has been growing steadily over the past decade, with a compound annual growth rate of 3.6 percent between 2007 and 2017.
Despite this growth, the industry faces significant challenges, including an aging workforce, rising labor costs, increased regulation, and evolving consumer preferences.
To stay competitive in the face of these challenges, manufacturers must adopt new technologies and processes that improve efficiency and reduce costs. Here are some key trends to watch in the food processing and manufacturing industry:
- Automation: Automation is increasingly being used to perform tasks that are dangerous or repetitive in nature. This not only reduces labor costs, but also helps to improve safety and quality control.
- New packaging materials and methods: Consumer demand for convenient, sustainable packaging is driving innovation in the food packaging sector. Manufacturers are developing new packaging materials made from recycled content or biodegradable materials, as well as new methods of packaging such as vacuum sealing and modified atmosphere packaging (MAP).
- Clean label ingredients: Consumers are becoming more aware of what they eat and drink, and are demanding products made with “clean” resources.
Challenges Facing the Industry in 2023
The food processing and manufacturing industry is forecast to grow at a compound annual rate of 3.6% from 2018 to 2023, according to Mordor Intelligence. However, the industry will face several challenges during this time.
The first challenge is the increasing cost of raw materials. The cost of corn, for example, has risen by more than 50% since 2015. This increase is due to various factors, including droughts and tariffs.
The second challenge is the labor shortage. Many food processors are struggling to find enough workers, especially in regions with high unemployment rates.
The third challenge is rising competition from foreign manufacturers. In recent years, many foreign companies have entered the U.S. market, attracted by the country’s large population and growing economy.
Despite these challenges, the food processing and manufacturing industry offers many opportunities for growth. For example, the industry is expected to benefit from the continued trend toward healthy eating.
Consumers are increasingly interested in buying foods that are low in sugar, fat, and calories. This trend presents an opportunity for food processors and manufacturers to develop healthier products that meet consumer demand. In addition, the industry is expected to benefit from the continued growth of e-commerce sales. Online sales of food products are forecast to grow at a compound annual rate of 16% from 2018 to 2023, according to Statista.
Opportunities for Growth in 2023
The food processing and manufacturing industries are constantly evolving, presenting new challenges and opportunities for growth. As we move further into 2023, there are a few key trends that will impact the industry.
- Increasing demand for plant-based proteins: As consumers become more health-conscious and environmentally-conscious, there is an increasing demand for plant-based proteins. This presents an opportunity for food manufacturers to create new products that meet this demand.
- Technological advances: New technologies are constantly being developed that can help improve food safety and quality, as well as increase efficiency in production. For example, blockchain technology can be used to track food items throughout the supply chain, from farm to table. These sorts of advances present both challenges and opportunities for manufacturers to stay ahead of the curve.
- Changing demographics: The population is aging, and along with that, we are seeing changes in eating habits. Older adults are generally more health-conscious and have different dietary needs than younger adults. This presents an opportunity for manufacturers to develop products that cater to these needs.
- Economic shifts: The global economy is always in flux, which can impact the food industry in a number of ways. For example, tariffs on imported goods can make it difficult for manufacturers to source ingredients at a reasonable cost. On the other hand, economic growth in certain regions may create new markets for food products
Key Takeaways from Industry Trends in 2023
The industry offers significant opportunities for companies that are able to adapt to changing trends and consumer preferences. Some key takeaways from our research on trends in the food processing and manufacturing industry include:
Lessen company and consumer environmental impact: The past years prompted consumers to re-evaluate their purchasing and consumption habits. As a result, more and more consumers are looking for sustainable products and processes that help them lessen their environmental impact and contribute to a Circular Economy.
People want more carbon neutral and up-cycled products. Consumers who are interested in sustainability will find more carbon-neutral and upcycled products on the market. Pending new labeling regulations and commitments will provide consumers more transparency about the products they are purchasing — and will spur reformulation.
Consumers are driven by “clean” commitments and labels. Companies updating consumers on sustainability efforts and goals moving forward within the brand.
Food safety and transparency: customers more concerned about what they are intaking and doing more research behind brands with the help of technology and social media at their finger tips.
Market saturation means that brands must work harder to stand out and differentiate themselves from other competitors.
Consumers willing to pay more to feel green, shift in practices, processing, and packaging. “Nowadays, consumers are willing to pay extra for those food items that are more nutritious. They are known to go the extra mile to search for these healthy products. Therefore, functional ingredients in food will continue to have a stronghold in the industry.”
The sustainability trend will likely shift production materials and time of lines run as well as how we see products within companies transported. As auctioneers, this impacts our inventory at auctions, how we adjust demand for new or used equipment, and how we get creative in our marketing efforts before auctions as well. This adjustments within our brand will protect our sellers from being stuck with unsold items.
- Rising health consciousness among consumers is leading to increased demand for healthy and organic foods. This trend presents an opportunity for companies that are able to produce healthy food products that meet consumer needs.
- Consumers are become more interested in where their food comes from and how it is produced. This trend provides an opportunity for companies that can provide transparency in their supply chains and offer traceability of their products.
- There is a growing trend towards customization of food products, driven by factors such as individual dietary preferences and allergies. This creates an opportunity for companies to develop products that meet the needs of individual consumers.
- The increasing prevalence of technology in the food industry is creating opportunities for companies that are able to use digital platforms, such as predictive analytics, to improve their operations and optimize supply chains.
- Companies also need to be able to adapt quickly in order to stay competitive and keep up with changing consumer preferences. This can involve investing in new technologies, processes, or products.
Digital Transformations within Companies
Food manufacturing industry is undergoing a digital transformation with more companies adopting technologies such as artificial intelligence, virtual reality, and augmented reality.
The pandemic created a shift for digital operations and technology continues to advance, food manufacturers are likely to leverage new innovations to improve production, efficiency, work place safety, and product quality.
AI, VR, and AR have increased output, quality, and reliability. By adopting automated solutions companies can replace repetitive tasks workers were completing with technology, and move workers to more skill-based tasks within their companies.
Now there are more opportunities for machines learning to develop new products in more cost-effective ways — controlling price for consumer as much as possible in low economic, high inflation environment. This impacts auctions by some companies changing technologies while others continue to use what has worked historically.
Currently there is a tight economy and a high inflation rate puts the emphasis on new ways to maintain their consumers and keep them coming back.
Overall, following digital transformations within companies allows us to take advantage of market opportunities and move or sell idle assets for our sellers.
Functional Foods are becoming more popular
Consumers are changing eating habits by protecting and preventing their health. People have become more health conscious post COVID-19.
Industry trends are showing people are paying for organic, ethically sourced, rise of clean labels. Their research on what to eat is just a google search away with a high emphasis on information and health impacts. Furthermore, consumers interested in health benefits from their foods, gut health, reduced inflammation, improved circulation, macro friendly etc. Manufacturers will likely respond with more targeted health promotions to fit consumer interest.
By staying up to date on functional food and beverage trends, auctioneers can identify new product, ingredients, and equipment lines that are likely to be in higher demand for future sales.
The food manufacturing industry is continuing to evolve in response to changing consumer demands and technological advancements. AAG plays a critical role in helping our food and beverage manufacturing sellers manage idle assets and equipment. These assets can take up valuable space and tie up capital that could be better served in future adaptations within your company.
Conclusion on Food Manufacturing
Overall, the food processing and manufacturing industry is on the rise in 2023. There are many challenges and opportunities presented by this growth, but with careful planning and a thoughtful approach to trends, businesses can make the most of these opportunities. With an understanding of changes in consumer behavior, technological advancements, sustainability initiatives, and more, companies will be well-prepared to succeed during this period of growth.