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What challenges do the FMCG and F&B Industries face?
Demand Volatility and Forecasting Issues:
The FMCG and F&B industries are subject to frequent demand fluctuations as a result of external market forces, seasonality, and changing consumer preferences.
- Frequent demand fluctuations disrupt production schedules, leading to stockouts and overproduction.
- Poor forecasting can lead to lost sales of 10-20% of potential revenue and loss in customer satisfaction of up to 30%.
Supply Chain Complexity and Traceability
Lack of transparency in supply chains can lead to quality control issues, delayed shipments, and increased costs.
- Only 6% of FMCG companies achieve full supply chain visibility, affecting quality control and increasing costs by 10-15%.
- 75% of companies experienced major supply chain disruptions in 2023, with only 20% having full traceability.
Rising Operational Costs
Companies in the FMCG and F&B industries feel the pinch from the increasing cost of labor, raw materials, and energy. :
- Logistics and transportation costs have increased by 12-15%
- Labor costs have risen by 10-15% annually and are expected to continue rising
Regulatory and Compliance Pressure
Strict rules about food safety and standards for sustainability pose major challenges for companies.
- Food safety regulations have increased complexity, with 60% of companies facing challenges due to frequent changes.
- Product recalls cost the FMCG sector an average of $10 million.
Labour Shortages and High Turnover
Labor-intensive tasks like material handling, packaging, and sorting are heavily reliant on human workers, who are hard to find and retain.
- The FMCG sector faces a 20-25% average turnover rate, leading to inefficiencies in training and production quality.
- 50% of companies report significant challenges due to labour shortages.
