Meeting the new normal of the beverage market
The global beer industry faces its greatest challenge in 50 years. All at once, there is falling consumer demand, increasing competitive products, heightened requirements by retailers and consumers, and tougher market access. This mix of challenging developments is not only creating temporary roadblocks for beer manufacturers, it also marks the beginning of a difficult era for the entire industry – a new normal.
The need to change
After decades of volume decline, breweries need to prepare for these challenges. Companies must recognize that their infrastructures and operational processes may no longer correspond to current market conditions. Product teams, for instance, that are used to stable portfolios may have a hard time keeping up with the swift and steady product launches of more agile manufacturers. Purchasing practices geared toward locking in a certain price rather than creating product availability are not likely to be flexible enough to react quickly to unexpected surges in consumer demand. Manufacturing sites designed for the production of large volumes at low cost are unsuited for niche products that require small batches and fast retooling processes.
Furthermore, the logistics departments of legacy breweries may struggle with the increased requirements of serving both the highly fragmented trade channel and the evolving spread of convenience stores.
In addition to these operational issues, breweries also face organizational challenges. The global expansion and M&A activities of the past years have often resulted in structures that resemble loose confederations of local businesses rather than genuine multinationals.
Where to go? What to do?
To overcome these structural, operational and organizational challenges, some breweries are searching for cost savings in procurement, manufacturing and marketing, and are striving to find new ways of meeting the challenge of catering to consumers in a highly dynamic and demanding multichannel environment. Another and highly efficient way to overcome the challenges of the new normal is to take a close look at the design of the operational processes of the value chain and evaluate whether they are sufficiently streamlined and effective.
Striving for operational excellence with technology
A brewery’s ability to streamline, simplify and automate business processes – from receiving raw materials to delivering products to customers – is vital. Lean processes help create the best-performing players in the industry. Around the globe, breweries are working to improve customer acquisition, revenue growth, and efficiency – but it’s the ones that embrace technology that succeed.
With technology in the form of a brewery management solution (an ERP system specifically designed to support and empower the processes of breweries), breweries can support and automate their business processes, and boost their ability to carry out their processes in a fast and efficient way.
With a state-of-the-art brewery management solution the entire value chain can be tied into one seamless, simple and efficient workflow and provide new, valuable real-time business insight that will increase speed and accuracy in the decision-making.
