Study: As Importance of Tech in Food Rises, Investment Lags

Technology is playing a growing role in the food and beverage industry, however, investment in the digitization of the industry is not being prioritized, according to a new report.  

The 2018 CSB-System survey canvassed the opinions of decision-makers within the food and beverage production industry across 29 countries. Concluding that while digitization will have a “huge role to play” in the future of the industry, it is being underfunded.

The decision-makers identified several challenges that digitization could help solve including increasing retailer requirements, strict international legislation on food safety and traceability and growing consumer demand for quality and freshness.

Twice the respondents rated digitization and IT as “very important” compared to a prior CSB survey, jumping from 8 percent in 2017 to 17 percent in 2018. However, investments are still low: only 15 percent of respondents spend more than 1.5 percent of their turnover on IT, while nearly 70 percent do not invest more than 1 percent in digitization.

In terms of which technologies were voted as having the most potential for disruption within the food industry, collaborative robots and artificial intelligence were rated the most promising. While 3-D printing and blockchain ranked last and second-to-last respectively. Decision-makers don’t currently see blockchain gaining a foothold in the food industry, although its possible that adoption by large players such as Walmart and Microsoft might change this.

 “Our survey demonstrated that there is a strong recognition among food manufacturers of the benefits of creating a Smart Food Factory, but there is still a lack of knowledge and understanding that is preventing many companies from investing heavily in IT and digitization,” said Frank Braun, Head of Marketing for CSB, to Food Ingredients First.

Two of the main barriers to digitization were found to be a lack of employee skills and low awareness of available solutions on the market.  The report suggested that working with an IT partner can aid companies in achieving a Smart Food Factory.  

“For many companies, therefore, selecting a suitable external supplier may provide the necessary support and guidance to maximize the many opportunities that digitization offers, in particular, in improving business performance and profitability,” Braun said.

Cost is likely a concern that is holding many companies back from investing in new tech, but if consumers start to see some companies with advanced digitization, they could expect it from all manufacturers. Although this survey indicates that food companies aren’t yet investing big in IT and digitization, that could change drastically in the coming years as the technology becomes more advanced — and more of a necessity.

Digitization is credited with driving down production costs, eliminating errors and improving workplace safety, yield and traceability. However, the high cost of new tech continues to hold companies back from investing. But as manufacturing moves through a digital transformation, it will likely become a necessity for companies looking to advance and improve within the food and beverage industry.