With massive transformations in global markets, AI and machine learning have become important assets for companies since they have the power to transform the way companies in the food and beverage industry deliver customer experiences. These technologies offer huge opportunities to companies to revolutionize critical aspects of their business processes. In the food and beverage industry, producers, retailers, and restaurants are rapidly changing their business strategies to incorporate innovative technologies to meet consumer demands, stay ahead of the competition, and provide an enhanced experience. Through the implementation of AI and machine learning technologies, retailers in the food and beverage industry can transform business processes and directly enhance the customer journey. In this article, we have summed up some of the interesting benefits of AI and machine learning that retailers in the food and beverage industry can leverage to improve customer engagement as well as ROI.
What the Client Wanted
Gained a 360-degree approach to the market effectiveness and enhanced the ROI.
Food Service Industry Overview
The global food service industry includes restaurants and leading food chains that aim at expanding their consumer base by offering low-cost options to the customers to replace home-cooked meals. Over the years, the global food service industry has been greatly affected by economic volatility, altering consumer preferences, and market dynamism. As a result, leading food service companies are exploring innovative ways to meet the relentless demands of customers and improve their position in the market.
Food Service Industry Challenges
Shortage in the supply of raw materials: Of late, the food service industry has been witnessing a drastic shortage in the supply of raw materials and this can is due to the adverse weather conditions and natural calamities. Moreover, with the changing climatic conditions across the globe, the supply of raw materials has been hindered.
Economic instability: Owing to the recent fluctuations in the economy, the prices of the commodities have been increasing. This is mainly due to the extravagant tax rates being imposed by the governments across the globe. This fluctuation in the prices of commodities has greatly reduced the consumer’s spending.
About the Client
A leading food service provider based out of the United States.
The food service provider with a considerable number of business units spread across the globe wanted to establish an optimum marketing mix model. Additionally, the client wanted to comprehend the problems related to their marketing spend and leverage the use of marketing mix modeling to stimulate customer outcomes –incremental volumes, revenues, and ROI.
Summary of our marketing mix optimization engagement
To gain in-depth insights into our marketing mix optimization engagement for food and beverage industry players
With the help of Quantzig’s marketing mix optimization engagement, the food service provider quantified the marketing effectiveness of their channels in terms of revenue, contributions, incremental sales, and ROI. Additionally, the client gained a 360-degree approach to the market effectiveness and optimized their marketing efforts and measured an increment in the revenue and profit. The client also leveraged insights into market conditions to further improve the decision-making process and unlock organizations’ potential.
Marketing Mix Optimization Solution Insights
Quantzig’s marketing mix optimization engagements can help firms in the food and beverage space to measure the impact of long-term sales and the overall customer experience. Additionally, food service providers across the globe can measure how specific channels are performed at specific time intervals in the presence of negative media publicity. This further helps companies evaluate their ROI.
To know more about how our marketing mix optimization solution helped the food service provider
What the Client Wanted
Create customized products and facilitate effective loss prevention.
Gained actionable insights on improving the overall customer experience
Summary of the probiotic foods industry
Consumers across the globe are conscious about their snacking habits and are increasingly adopting healthier food habits today. Also, the rising awareness of the benefits of probiotic foods is a major growth driver for the market. This trend is gaining popularity as regular consumption of probiotic foods prevents the growth of harmful bacteria inside the digestive tract; thereby, enhancing the absorption of nutrients.
Consumer-centric healthcare: Today, factors such as healthcare innovations and technological trends are driving the shift towards consumer-centric health care. This has increased awareness among the global population and helped them to play an active role in any treatment plan.
Drug approval stagnation: Drug-specific issues and stricter guidelines have been major factors contributing to the stagnation of drug approvals. Such factors pose major challenges for probiotic foods manufacturers and decrease the time-to-market for the drugs.
About the Client
A world-renowned probiotic foods manufacturer based out of the United States.
The company was facing challenges in increasing their focus on building stronger bonds with their best customers owing to the competition in the industry. The probiotic foods manufacturer also wanted to improve customer satisfaction, loyalty, and reduce churn rates. By leveraging strategies such as aggressive pricing, promotion, and customer acquisition, the manufacturer of probiotic foods wanted to gain actionable insights into customer metrics.
Benefits our big data analytics engagement
To gain in-depth insights into our analytics solutions for the food and beverage industry
The probiotic foods manufacturer was able to anticipate the future behavior of the customers and accordingly segment them in order of their importance with the help of Quantzig’s big data analytics solution. Additionally, they were able to offer personalized product and services to the customers, which further helped them to efficiently calculate risks.
Big Data Analytics Solution Insights
Quantzig’s big data analytics solutions help food and beverage industry players to enhance customer experience, innovative products, and devise risk management strategies. Additionally, with the help of these solutions, companies can streamline the purchasing activities of the consumers and proactively track them.
To know more about how our big data analytics helped the probiotic foods manufacturer gain insights into the latest food and beverage industry trends
The client: A leading player in the food and beverage industry
Area of engagement: Customer analytics
The global ready to eat food products market is segmented into three types based on the packaging, distribution channel, and product type. The high demand for ready to eat food products can be attributed to several factors such as the rise in urban population, busy work schedules, and on-the-go consumption habits. The rise in disposable income in emerging countries along with consumer preferences for healthy and convenient food are the other factors that are fueling market growth.
However, unhealthy substitutes and low quality and taste along with a growing shift towards a healthier lifestyle are likely to hinder the growth of the global ready to eat food products market in the coming years.
The Business Challenge
Company Description– A leading food and beverage industry client, specializing in the manufacture of ready to eat food products.
The client, a leading player in the ready to eat food market, approached our team of experts to help them leverage the use of customer analytics to streamline their business processes. The client was looking at refining their business strategies to optimize their marketing efforts and improve ROI. They also wanted to strategically plan their policies so as to improve customer satisfaction and boost profitability.
With the help of Quantzig’s customer analytics solution, the ready to eat food products manufacturer wanted to enhance their reach by expanding their customer base and by offering relevant services. Moreover, the client also wanted to streamline their campaigns and reduce the overall marketing costs.
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The Solution and the Business Impact
Leveraging Quantzig’s customer analytics solution assisted the ready to eat food products manufacturing company in enhancing their service and product offerings to suit the needs of their customers. The solution offered also helped them garner insights that led to the development of a strategic plan that had the highest probability of engaging customers in relevant ways.
The solution also offered the following benefits:
- Reduction in customer acquisition and retention costs
- Enhanced sales force effectiveness by targeting qualified prospects
- Delivered higher returns on marketing and promotions investments
- Increased sales to new and existing customers
Customer Analytics Predictive Insights
Quantzig’s customer analytics provides actionable insights that help ready to eat food products manufacturers improve their on-the-shelf performance as well as enhance their overall marketing effectiveness. It also helps them identify the consumer trends and behavior in various segments of the market.
Moreover, our client was delighted with the insights this analysis offered to their marketing strategy. Customer analytics also enabled them to work smarter by making better-informed decisions as they are in a better position to understand the actual customers’ demands.
Food and beverage industry drivers:
- Rising demand for food products with longer shelf life– The demand for food products with longer shelf life is a major driver for the ready to eat food products sector. Also, the growth in working population and busy lifestyles have led to the rise in demand for packaged ready to eat food products as they can be stored for long durations and retain their freshness.
- Packaging technologies to retain maximum freshness– The global ready to eat food products sector is witnessing an increase in the use of different packaging technologies to retain the maximum freshness of the product. The selection of right packaging technique also plays a key role in increasing the shelf-life of the food products.
- The rise in the demand for organic food– The rising demand for organic food products is expected to be an emerging trend in the global ready to eat food market. Organic products offer several health benefits such as a high nutritive value, higher source of antioxidants, and are free of preservatives or chemicals.
Want to know more about our approach to digital analytics and how we helped a ready to eat food products manufacturer to identify and adjust to the latest food and beverage industry trends?
The Client: Frozen yogurt manufacturer
Area of Engagement: Trade Promotions
The frozen yogurt industry has been booming for the past decade, driven by strong consumer interest in healthier dessert alternatives and innovative product offerings. Consumers today are more health conscious and tend to consume desserts that are low in fat and have a minimal amount of sugar. It is in this context that frozen yogurt has become the best alternative to unhealthy desserts as it fulfills both the requirements of consumers. Another factor that is expected to boost the sales of frozen yogurt is the distribution of these products through online channels, as online retailers offer a wide variety of frozen yogurt. Also, online stores provide frozen yogurt with lucrative offers and coupons. All of these benefits are expected to boost the growth of the global frozen yogurt industry.
However, our analysis of the food and beverage space shows that the frozen yogurt manufacturers are facing challenges in terms of:
- Increased competition from substitute products: Today, consumers purchase frozen yogurt mainly because of their health benefits and indulgence factor. However, food and beverage manufacturer across the globe are offering various other products that also offer numerous health benefits including low-calorie ice-cream and other frozen fruits.
- Consumer preference for fresh food: Typically, consumers of today have a perception that frozen foods are stale and have low nutritional value. This perception is causing a shift in the consumption factors of the consumers.
Many such challenges are compelling firms in the global frozen yogurt manufacturing space to leverage the use of trade promotions optimization solutions. Trade promotions optimization solutions help firms effectively address issues pertaining to transparency and visibility on trade spends. These solutions also help companies improve efficiency in promotion planning and standardizing global promotions to keep them on par with the customer requirements.
The Business Challenge
A leading frozen yogurt manufacturer with business operations spread across the globe was facing significant market pressure from their competitor, their trade promotion programs, and substitute products. As a result, the client wanted to improve their capability to plan product promotions, inventory levels, and profit margins. Additionally, the client wanted to evaluate the effect of various promotions, including volume discounts, and seasonal sales, and shift to a more targeted promotions approach.
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The Solution Benefit and the Business Impact
With the help of Quantzig’s trade promotions engagement, the frozen yogurt manufacturer was able to improve promotion reach and effectiveness and further create plans based on cost, timing, and depth of promotional activities. The client also analyzed promotional efficiencies based on period and food and beverage industry trends. This helped the client effectively plan future promotions based on segments, type of promotion, and frequency of occurrence.
Trade Promotions Predictive Insights
Quantzig’s trade promotions engagements help firms in the food and beverage industry space to analyze the promotional SKUs and product demand pattern along with customer segments. The engagement also helps firms minimize their revenue budget constraints for better trade promotions. With the help of Quantzig’s trade promotions engagement, firms can also optimize their budget allocation strategies.
To know more about how our trade promotions engagements helped a leading frozen yogurt manufacturer identify the impact of the latest food and beverage industry trends
LONDON: Quantzig, a global analytics services provider, has recently completed their latest supply planning solution for a CPG client. The global CPG industry is the foundation for the contemporary consumer economy as it drives enormous amounts of money into businesses like advertising and retail. It is also a means for the national economy to increase the gross domestic profits (GDP). Players in the CPG industry are looking to create and enhance shopping customer experience owing to the recent digital advances.
“The supply planning solution helped the CPG client to take into consideration the seasonality, tendencies, and the cost of production to decrease stock-outs. Additionally, the engagement helped the CPG client to predict customer demand patterns and meet production requirements.” says an industry expert from Quantzig.
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The supply planning solutions helped companies to increase forecast accuracies and enhance version management capabilities. Additionally, firms were also able to develop a robust inventory replenishment plan to offer consistent and reliable customer service to drive improvements in the supply chain performance.
Additional Benefits of the Supply Planning Solution
- Increase forecast accuracy and management capabilities
- Offer consistent and reliable customer service
- Help predict demand to decrease the cost of production and stockouts
- To know more, request a free proposal
To know more about how our supply planning solution helped the CPG client
The client: Food retail client
Area of engagement: Pricing analytics
The global food retail space is witnessing considerable growth owing to altering customer preferences, a radical shift toward online shopping, and rising global population. Since food is considered to be one of the key categories of spends, prominent organizations in the food retail space are planning to invest in research and development to enhance their product offerings. Along with the convenience factor, macroeconomic factors such as the burgeoning GDP, increasing consumer spending, and changing lifestyle are further contributing to the growth of the food retail space.
Although the food retail space is witnessing considerable growth, owing to the growing demand from the end-user segment, some prominent factors may influence the growth of the industry. These include:
- Supply chain effectiveness: In leading organizations, supply chain plays a pivotal role in meeting the growing demands of the end-user segments.. Without an effective supply chain management strategy, the flow of the goods from the manufacturer to the end-users will be affected. It becomes essential for organizations to maintain supply chain effectiveness to retain the flow of commodities to the end-users.
- The threat from unorganized players: Since a majority of the revenue generated is from the food industry; prominent organizations are planning to increase their investments in the food retail Moreover, altering preferences of the customers are also encouraging businesses to enhance their product offerings across the niche market segments.
To counter these challenges and address the pricing requirements of the customers, leading organizations in the food retail space are leveraging solutions like pricing analytics. Pricing analytics helps businesses understand the current market prices for the food products offered and accurately estimate the impact of pricing on the sales volume. Pricing analytics solution also offers real-time insights into the market conditions and helps companies target contribution margins.
The Business Challenge
Supermarkets and hypermarkets comprise the largest share in the food retail industry and are expected to account for $7500 billion by 2019
The client, a prominent food retailer, wanted to understand the impact of price differentials on the market share and estimate the price-change triggers based on customer behavior. Through a reliable pricing analytics solution, the client in the food retail space wanted to understand the past performance of the products and accordingly realign their product prices to increase the profit margins. Moreover, the client also wanted to monitor the market closely and anticipate the impact of price change on promotional campaigns. The primary concern of the client was to develop a well-defined pricing strategy to plan the price changes and promotions.
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The Solution and the Benefits Offered
Strategies we recommended based on our analysis to analyze the current pricing levels
The pricing analytics solution offered by Quantzig helped the food retail client manage their prices and promotions and leverage the use of data to drive the customer’s buying decisions. The solution also helped the client accurately meet the pricing needs and cover relative price points. Moreover, the pricing analytics solution also helped the food retail client optimize their pricing strategies to maximize profit margins. With the help of Quantzig’s pricing analytics solution, the client also sought ways to create a database based on the initial and the final pricing.
Pricing Analytics Solution Predictive Insights
The pricing analytics solution offered granular insights into the market, sales, and the cost data. The client was able to automate price-setting to position products effectively against the competitors. The pricing analytics solution also helped the client identify quick wins and develop high impact price strategies to improve revenue efficiency.
To know more about pricing analytics solutions
The client: A food retail company
Area of engagement: Price point optimization
The food retail sector is one of the largest industries in the US and the firms in this space are preparing to expand their consumer base and increase their foothold in the market. Typically, food retail establishments include outlets that serve food outside the home such as restaurants, cafes, takeaways, and catering and vending companies. Food retail companies across the globe are planning on devising practical measures to improve their offerings and meet consumer demands due to the rising consumer expectations. Additionally, the ever-evolving customer demands, favorable demographics, rapid urbanization, increase in disposable income, changing lifestyles, and food habits are driving the growth of this industry. However, the growth of the food retail industry is subjected to certain factors. These factors include:
- Stringent government regulations: Today, government authorities are facing pressures to devise quality measures and provide safe and reliable food services to customers, as they have become conscious about their health outcomes. Additionally, government bodies across the globe have also made it a mandate to ensure safety in the food products offered due to the increasing instances of food allergies.
- Impact of digitization: Firms within the food retail space are looking for promising ways to engage with customers and open new revenue streams due to the growth of numerous e-retail platforms. Additionally, the fluctuating preferences of customers are compelling food retail firms to offer ease and convenience in their offerings.
These factors are compelling firms operating in the food retail space to leverage the use of price optimization strategies. Price optimization solutions are used to combine data across different data sets with information and inventory levels to recommend robust pricing strategies to enhance the current profit margins. Price optimizing solutions also help firms calculate the demand for products at different intervals and scales.Furthermore, these solutions also assist firms in forecasting demand, developing robust pricing and promotion strategies, and subsequently, improve customer satisfaction levels.
The Business Challenge
Total food retail sales in the US amounted to about 5.32 trillion dollars in 2015.
The client, a leading food retail giant in the US with business operations spread across the wanted to collect historical data including the competitor’s prices, company’s pricing and promotions, and economic conditions. The client also wanted to understand the impact of price differentiation across customer segments and devise a robust pricing strategy to enhance customer satisfaction. Additionally, they wanted to formulate better initial pricing, discount pricing, and promotional pricing strategies.
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The Solution and the Business Impact
The food retail client was able to set temporary prices for companies to spur sales for items with longer life cycles with the help of Quantzig’s price optimization solution. The client also gained actionable insights into the customer buying patterns in real-time. This helped them devise strategic ways to retain their most profitable customers. Furthermore, the engagement also helped the client define profitability levels and understand the sensitivity of customers.
Price Optimization Solution Predictive Insights
With the help of Quantzig’s price optimization solution, the food retail client identified customer segments with a higher probability of cancellation. Additionally, the client gained a detailed analysis of the market in which the company operates by creating a competitive management analysis. This helped them forecast future renewal rates for their clients.