The impact of Digital Transformation in the Food Industry

What is the impact of digital transformation in the Food industry? The food industry has been revolutionized by digital, from production processes to distribution, and from data-driven marketing, the disruptive role of social media, to the frontier of personalization.

Food is not just something we eat to nourish our bodies, it also inspires physical sensations and emotions, and it’s often the things that brings us together with our families and friends. At the same time, food is also a very digital topic. 

To get an idea, just open Instagram. How many photos do we see of perfectly photographed dishes or a perfectly set table? Then, there is the universe of reviews for restaurants, bars, taco stands, and coffee shops on dedicated portals such as TripAdvisor. The things we read and see on such portals, which many of us use every day, are often the basis of our choice of not only where to eat, but what to eat. Moreover, more and more space is also being given to online and app bookings (think of The Fork, which is connected to TripAdvisor). There is another large field that is expanding rapidly: that of delivery services. And, finally, there is the digital marketing field that is upstream, data-driven, and, constantly and continuously updated.

In short, digital transformation in the food industry has radically revolutionized the sector and its diverse supply chain, so much so that it is impossible to fully track all these changes.

In this post, we will provide an overview, starting upstream, from production, to the importance of social (and therefore of storytelling, often based on images or, even more, on videos), then on the logic of data-driven marketing, to reach, finally, personalization, which is the real frontier in this field. 

 

The importance of digital for production and distribution

Digital Transformation in the Food industry has had a huge impact on Food & Beverage companies, starting from the very mechanisms of production, which, while they are the least visible to the public, they are decisive, because this is where it all starts.

In a few years, we have passed (or are passing) from very mechanical and “old” processes and machinery, to the increasingly massive implementation of Artificial Intelligence, IoT (Internet of Things), machine communication, and machine learning systems. 

In other words, we have moved from traditional factories to ones that are increasingly “intelligent” and interconnected, that continuously collect data, which is invaluable for optimizing all phases of production, but also for predictive maintenance operations, for managing emergencies, and for increasing quality.

From production we then move on to distribution; even here, digital has changed most everything. The perishable nature of food and drink make distribution a central challenge. Here too, digital solutions revolve around maximum inter-connection, the collection of an enormous amount of data, their deep and intelligent interpretation (Big Data), but also the design of dedicated applications tailored to the needs of the individual company.

Naturally, all of this has significant repercussions not only on manufacturers, but also on restaurants, stores, and all types of retail outlets that are part of the supply chain. This translates into reduced costs, increased efficiency, and improved quality; elements that come together in an unprecedented virtuous circle.

In short, digitization applied in the production and distribution phases, is a huge issue. But now, we’ll transition to the side that concerns the relationship between the industry and its customers—i.e. all of us.

 

The disruptive role of social networks

Social networks are central to the food industry, where an effective strategy is fundamental for businesses of every size, from large multinational companies, to small artisans, from restaurant chains, up to individual enterprises.

Let’s start from some data:

  • In 2019, there were 3.48 billion active users on social networks around the world, an annual increase of 9%
  • Of these, 3.26 billion have access to social networks from mobile devices, with an annual increase of 10%

But let’s go into even more detail:

  • The average user spends 2 hours and 16 minutes a day on social networks.
  •  Instagram is the social network with the fastest and most solid growth. Importantly, it is an ecosystem-based almost entirely on images and videos, the type of media that is much more effective for storytelling in the food industry.

It’s no surprise, that a recent survey by Accenture commissioned by Instagram found that Food & Beverage is the topic of greatest interest for users (source).

Let’s get even more specific: for 53% of people interested in the theme of “food” on social media, videos are the preferred content; for 35%, it’s images. And what are the keywords that move these “foodies” to promote one brand over another? They are: “quality,” “attractiveness,” “sustainability,” and “education” – a broad concept that involves both the responsibility of the company and the individual’s desire to know more – (source).

Finally, more than 95 million photos and videos are published on Instagram every day (source). This growing figure gives an idea of the size of the playing field where food and beverage marketers are operating. And what can help? Big Data. 

 

Using the Big Data compass

We’ve seen how big the playing field is, and we know that the audience is potentially everyone. So what do marketers need to know about the sector’s trends, the changing preferences, and consumer habits and behaviors?

Once again, digital is coming to the rescue. Digital means data, huge amounts of data, which we all disseminate daily through our online searches, the videos we view on YouTube, the posts we publish on social networks.

This is why it is essential to equip ourselves with the most advanced systems to analyze and interpret this Big Data. This is the only way to get a more concrete idea of the audience to which your company (large or small) can turn, to have an initial contact” and then try to establish a fruitful and lasting dialog.

In short, it is a question of adopting a data-driven marketing perspective.

Let’s look at a concrete and central example, the analysis of  “sentiment”, an index that measures what is said about a brand, a topic, or a product, and food and drink, of course, are no exception. In short, sentiment analysis can help provide insight into trends for a variety of sectors.

Here, it’s about tracking significant mentions and keywords on social, dedicated platforms, and search engines and doing so in the most complete (and omnichannel) way. Such data can inform decision making, both at production and promotion level.

Imagine you are a brand that produces craft beer. You will be interested, of course, in the sentiment about your specific sector, divided into geographical and demographic areas (for example). For example, you would want to know that, in northern California, those from 25 to 35 years old demonstrate very positive sentiment towards a certain type of beer. Knowing this, you can initiate more targeted promotional and marketing operations without being forced to target everyone.

 

Beyond data driven, there is personalization

The analysis of Big Data leads to a better understanding of one’s own audience, the potential audience, and the real audience. And—if well done—it can be used to predict their possible behavior. Ultimately, it is a question of dividing it into segments with consistent characteristics and packaging “tailor-made messages” for each of these.

Can we go further? Yes. We can aim at the individual person. This is what is known as “personalized marketing,” which is the heart of the business of specialized companies like Doxee.

It’s about really getting to know who’s in front of you, person by person, and, thanks to digital, building marketing communication in a one-to-one perspective. To address everyone, therefore, in a different way, according to their characteristics

In retrospect, it’s a strategy as old as business itself. It is the same that your trusted baker, or your favorite restaurant employs, where you feel at home. With Digital Transformation, this dynamic spills over into the big numbers. 

Download this infographic to learn more about how the food industry is changing with digital transformation

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