Food and Beverage Industry in eCommerce
Let us have a glance into the challenges of the food and beverage eCommerce industry and plan effective strategies for a great online business boom!
The food and beverage industry is one of the biggest and oldest industries in the world. Despite being around for ages, the food and beverage industry hasn’t really changed according to the times. A clear indication of this is the fact that the number of eCommerce outlets in the F&B industry is relatively low. And, the number becomes even more negligible when it comes to the B2B food and beverage industry.In US, the revenue from the eCommerce food and beverage industry was at 18.7 Billion USD according to the statistics noted in 2020. Estimates are informing the projection in the eCommerce food and beverage industry as 25.7 billion USD by 2025.
Handling your F&B business through the eCommerce channel might seem scary at first but the rewards are much too great to pass on. B2B business operates under the assumption that neither their clientele nor their mode operation will change. But, eventually, every food eCommerce business will have to change to meet the needs of the customer.
The scariest drawback for the B2B F&B industry is that in case of an unprecedented event they could end up taking the worst fall. Because the products are perishable and they can’t keep them stored forever especially when the quantity is huge. eCommerce eliminates this possibility by giving your business an omnichannel presence.
The omnichannel presence doesn't just mean your eCommerce store and your physical store for a B2B business. It means that you can expand your business to the B2C or even the D2C spectrums. It enhances the flexibility of your business and opens up new opportunities.
The future of F&B belongs to merchants with an omnichannel presence
Food and Beverage eCommerce delivers accuracy and immediacy, 2 aspects consumers desire the most.
Meal kit services, fresh produce, and ready-to-make meals are delivered to the front door. With rapid shipping, urgent fresh food orders can also be delivered with ease.
Customers get a convenient way of selecting, picking and ordering their favorite food. Also, get easy access to nutritional specs and sourcing info about the food.
Side by side customer reviews help to ease the decision-making process for new visitors.
- Nearly 50% of all U.S. B2B businesses offer their full product line online
- Online grocery sales in the U.S. are projected to grow to $59.5 billion by 2023
- Retail eCommerce revenue from food and beverage sales amounted to almost $7.5 billion by 2020
- U.S. online beverage alcohol sales hit $2.6 billion in 2020
The Challenges Involved
Many people often hesitate when they have to take their F&B business online. This is usually because they are afraid of going into something new which they have no prior experience. But, staying in your comfort zone can only get you so far. What you need is a reliable eCommerce partner who has experience working with all the spectra of the food and beverage industry.
The other troubling factor about running an F&B industry is that the food items are perishable, and hence time is critical in the F&B industry. You can’t store the products in a warehouse indefinitely when you are dealing with perishables. As an eCommerce expert who has worked with the online sales of perishable goods, we can guide you to make the right choice for your eCommerce store. You can add logistical functionality to your eCommerce store to set the date and time of the delivery as well as use expedited shipping. Furthermore, the admin can track all the orders from the back end and even group them together geographically to make shipping simpler.
Since we are dealing with perishable goods, product handling is a lot more complex than typical eCommerce. You might not be at the capacity to set up a pickup service for everyone or every locality. One way to tackle this problem is to provide a pickup option to the locals near you or your warehouse from where the products can be directly collected from you. Even in the case of delivery, please keep in mind that consumers are already used to paying delivery fees to UberEats and InstaCarts.
Apart from this, there is also a legal aspect that you should be concerned about. The sale of any food items in the U.S. is taken seriously and the FDA regulates all foods and food ingredients sold online. It is absolutely essential that you follow these regulations under all circumstances. You need to stick to strict operational practices to ensure food safety and quality. If you fail to do so the consequences could be severe.
Recent Challenges and Opportunities in Food and Beverage eCommerce
At the commencement of 2020 , a mere 56% of companies in the food and beverage industry had an eCommerce presence. These companies were in a good position to capitalize on the shoot in online sales caused by COVID-19. But there's still a lot of scope for more players. The Covid situation has improved the food and beverage eCommerce scene and the businesses are booming. Small and medium businesses can reap the benefits of the scene and become productively involved and scale their businesses online.
To keep the ball moving, you should consider exactly what kind of food and beverage products you’ll be selling online. The F&B products that are sold online can be broadly classified into 5 segments - Food, Seafood, Alcoholic Beverage, Coffee & Tea, Restaurants, and Confectioneries.
Expertise in All Types of Food & Beverage Business
Each food and beverage business is unique. And so the way you go about managing your F&B business changes with the type of F&B product you are selling. For example, the FDA regulates all foods and food ingredients sold online. However, meat, poultry, and certain processed egg products are an exception to this as they are regulated by the U.S. Department of Agriculture.
You need an eCommerce partner who has proven expertise in serving all major F&B segments so that your business is guided in the right direction. The major F&B businesses include Food, Seafood, Alcoholic Beverage, Coffee & Tea, Restaurants, and Confectioneries. And no two businesses are the same, each F&B business has unique requirements as well as features.
This section consists of essential food items such as meat, veggies, eggs, dairy products, etc. Essential food items are perishables and extra care must be taken when dealing with them. Time is an important factor when it comes to essential food products. You can’t afford to lose the freshness of the veggies or dairy products you sell. Selling inferior quality products can only cause damage to your F&B business. Whereas meat and eggs can be stored for a longer period without any damage.
With the help of eCommerce, farms can sell to both wholesalers (B2B) and retailers alike or you can even sell directly to the end consumer (D2C). The best option, however, would be to keep an omnichannel nature to your business which lets you sell to multiple customer categories. This gives your business flexibility beyond comparison and prepares your business for any unprecedented eventualities. We can help you bring the best out of your business and help you strategize your eCommerce venture regardless of the nature of your business (B2B/B2C/D2C).
Seafood is one of the most promising markets in the F&B industry and holds a great deal of profit potential. One of the reasons behind their high-profit potential is the demand for seafood is almost always high. The demand for seafood is even greater at places where there are no coastal regions nearby. The Food Marketing Institute’s survey found 56% of Americans eat seafood at least twice a month.
Virtina, as a company that has worked on multiple eCommerce stores for the seafood industry, can help shed valuable insights into the working of a seafood eCommerce store. Our experts can guide you to create that equally accessible B2B, B2C, and D2C. With features like individual pricing, Virtina can optimize your eCommerce store for omni channel selling.
When it comes to alcoholic beverages, the eCommerce field is very different from that of food items. The most prominent of these differences is the nature of the products. Unlike food items, they don’t go bad with time, so the storage and sales are much easier when it comes to alcoholic beverages. However, when you are dealing with alcoholic beverages it is important to make sure that the legal aspect is checked.
You can visit the alcohol control board websites and find out the regulations regarding the sales of alcoholic beverages. You’d also need a liquor license for the business. It goes without saying that sales of alcoholic beverages to people below the age of 21 is illegal and you need to ensure that the age restriction is followed in the website. Our team of experts can help you set up custom functionalities that help you effectively control the age restriction of your buyers and more.
Coffee & Tea
Although coffee & tea can not technically be classified as an essential food product, it is considered essential by the people who use them. Every coffee or tea drinker would not prefer to go a single day without their favorite drink. A study commissioned by the National Coffee Association found that 64% of Americans drink a cup of coffee every day!
It is also relatively easy to store and transport. And the best thing is that if your product is good enough it shouldn’t be too hard to find customers that buy from you on a subscription basis. The Virtina team can set up a subscription program that is automated, which means that you can just sit back and relax while the website does all the work for you. We can even make your eCommerce store handle its own tax returns and more.
The restaurants are also embracing the eCommerce way of life today. They are cutting off the middle man from delivering their own products and making more revenue from it. It also makes it easier to manage reservations, book dinners, and more. It is also an excellent platform to promote your restaurant to a wider audience.
We can help you strategize your restaurant business online and bring up the best eCommerce plan for it. You can even implement a loyalty program on your restaurant’s website and this is just one of the ways to help you boost your revenue. Our team of experts analyzes and formulate strategies that are tailor-made for your business.
Confectioneries are one of the first food and beverage businesses that shifted to the eCommerce platform. It is already a well-established sector in the F&B industry. Confectioneries are a high demand product and offer a promising market for your business. But in order to be successful in this field, your business needs to be heard of by the customers. Virtina will help you set up the right tool for this job. Everything you need to bring your business to the limelight from SEO to email marketing plugins.
Know The Trends in The Food And Beverage eCommerce Industry
Statistical predictions have indicated a growth possibility of 18 % in the Food and Beverage industry in the U.S. in 2019. The reports in 2020, show that 31% of customers prefer online delivery even after the pandemics issues are ended. The rise of 20% is more than the prior Covid-19 situation. Which implies that the current trend is providing a more favourable scene for the Food and Beverage eCommerce industry.
From analysis of the global trend, a conclusion can be drawn that a 15-20% scaling in sales will be possible by 2025. This would be 10X more than 2016. Surprising results, isn't it?
What is the Secret Behind the Trend?
The industry is seeking alternative methods to meet the requirements of the clients in the Covid scenario. While customers are forced to stay indoors, the online supply and home delivery is the highest convenience for them. They need not step out of their homes yet get their food supply at their doorsteps. A perfect fit - no chances of acquiring deadly infection and an easy arrangement of the essential goods.
The food and beverage supply chain industry has expanded their logistics internally and customers unable to purchase directly from manufacturers are relying on the e commerce partners for delivery.The short delivery of goods and fast flow of products are all propelling food and beverage e commerce industry to popularity.New digital possibilities adapted by the industry are all helping it win customer satisfaction as an ideal goods provider. Customers prefer the updation on orders as they will be able to understand when the products will be supplied to them. Online retail giants as Amazon are already promising an hour short delivery of products and the customers are thrilled! Amazon Fresh is thus revolutionizing the food and beverage eCommerce sector. Surely,you want to model the success and we are ready with our assistance!
Our team of experts can create a custom theme for your store that aligns with your brand and what it stands for. With the help of custom plugins you can implement special functionalities for your website. Make use of the custom functionalities on your site for attracting more customers to your website like reward programs, or get creative and implement a lucky spinning wheel.
The Adoption of eCommerce For Food and Beverages Supply
eCommerce has a significant role in the Food and Beverage industry. Consumers lay great emphasis on availability and immediacy. In situations such as Covid-19 crisis, interruption in food supply and lack of availability, accessibility to all kinds of food and beverage products have all been important factors affecting the population. Online delivery of F and B products have saved the situation and settled consumers comfortably.
36 percent of specialty food and beverage sales are from eCommerce platforms, statistics have depicted. This trend of fresh produce, packaged goods and ready-to-make meals delivered to your homes is only expected to continue as the industry updates with the preferences and demands of consumers. Plenty of companies are adopting eCommerce methods for food supply but survey has confirmed that only 64 percent are successful and have developed eCommerce technologies.
A multitude of consumers want streamlined means of browsing, choosing and ordering their favorite food products and the eCommerce technology disruptions are favouring the same. It is predicted that shoppers will do further online search this year before a final purchase. Companies can provide easy access to all nutrition labels and sourcing information and ensuring that it is compatible with a variety of mobile platforms. Moreover, connecting to consumers through social media channels can help improve accuracy, shoot up buyer satisfaction and boosted sales.
Already 70% -80% of food shoppers prefer online purchasing and they are happy that their favourite products are only a click away.
Variations in the Consumption Levels
The Lockdown situation has led to an increase in the food and beverages demand. While coffee parlours have shut down, oversupply of milk has been the result leading to the dumping of 3.7 million gallons of milk every day. Covid-19 has brought in new complications in the F&B eCommerce such as changing commodity prices, supply chain disruptions, food productivity scarce but the need of the occasion has helped cross all difficulties and frontiers, reach out to customer demands seamlessly with right strategizing.
eCommerce is Essential For Food and Beverage Business Growth
In the U.S., the retail sales of food and beverage are a $1 trillion dollar category. Before COVID-19, US food and beverage eCommerce sales were projected to grow to $32.22 billion this year, constituting just 3.2% of total retail sales. From March 1 to 22, there was a hike of more than 300% in the number of people who scaled their online grocery shopping.
The eCommerce share of food and beverage retail sales growth by mere 2% as a result of the shift in the buying patterns, implies $20 billion growth in online F & B sales. If small and medium food and beverage retailers and wholesalers act fast to capitalize on the opportunity, they can save the most of the added revenues that would otherwise be capitalized by big online retailers as Amazon.
Food and beverage mega brands are great players. Amazon acquired Whole Foods back in 2017 for $13.4 billion to convert grocery consumers to online purchasers. Unilever dedicated a team of 800 people to its eCommerce business which was growing at 40% back in 2018. Nestle grew its eCommerce sales by 18.5% in 2019 to reach 8.5% of its total retail sales, a notable eCommerce share in the F&B industry.
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