Digital Food Supply Chains

Artificial intelligence and automation are propelling the shift toward personalized customer experiences in the food industry. Aimpoint Research analysts are closely monitoring the growth of automation across the agri-food value chain to determine how the current adoption and advancements are going to be transformative to the industry. 

Grocery retailers have been moving towards curated and customized solutions for consumers for years, but the digitalization of food supply chains tailored to specific consumer needs and preferences is accelerating thanks to accelerated adoption of e-commerce grocery combined with big data analytics companies like Amazon. 

Major food companies and retailers are beginning to compete on the capabilities of their digital ecosystem in order to remain competitive. Fulfilling e-commerce grocery purchases has increased costs that retailers are not comfortable passing on to consumers. Many grocers are shifting to digital optimization of supply chains as a primary focus for growth and profitability and in some cases, even locating digital customer fulfillment centers in locations with no physical grocery store. The insights attained from the increase in digital is expected to drive retail product decisions like determining overall number of SKUs, private label products and decisions to vertically integrate supply chains.

Why it Matters

Digital Grocery

Digitization of the supply chain is the first step in the evolution of the food supply chain. As supply chains increase their digital capabilities, major food retailers will look to minimize supply chain costs, reduce supply chain risk, find new market opportunities, and use insights to develop personalized customer experiences that align with evolving customer needs. 

Customizable shopping experiences, nutrition, flavor profiles and environmental footprints are expected to emerge as new levels of insight are gathered with the advancements in digital supply chains. 

Supply chains will react much faster to future shifts in consumer behavior and input providers upstream must be prepared to move quicker to changes in the marketplace. Suppliers must focus on value creation through advancing their own digital connectivity capabilities or aligning with anticipated shifts in consumer values.