4 Ways Organic Food Distributors Are Overcoming Industry Challenges

Elizabeth Scolari
July 19, 2016

Organic food distributors are expected to face significant challenges in the coming years. Several major cultural shifts, not least among them the growing demand for fresh, safe and ethically-sourced food, have resulted in a host of industry-wide changes and disruptions. The growing reliance of distributors of all stripes on new technologies, such as on-demand eCommerce ordering, have also given rise to an equally large number of new opportunities. Organic food distributors in particular are vulnerable to changes at external points in the supply chain. The food sector has perhaps experienced more change than almost any other retail area, with the rise of online shopping, “grab-and-go” outlets that maintain little inventory and the growth of takeaway and home-delivery options. In light of these challenges, integration and collaboration between previously distinct points of the food value chain are growing increasingly important. This integration is largely being driven by technological innovations, but also the establishment of departments responsible for the collection, synthesis and communication of information both internally and across third-party companies. In this post ,we’re going look at four key ways that suppliers are rising to the challenges presented by an inherently disruptive market. 1. eCommerce is solving on-demand issues for organic food distributors. One of the biggest problems that organic food distributors face is the need to provide consistent and speedy replenishment of inventory. Because of the inherent issues with perishability, and given the high short-term turnover that retailers experience, it is important that suppliers are able to respond quickly to retailer needs whilst also limiting the amount of time that organic goods spend in transit. eCommerce platforms are providing retailers with customer-centric, efficient ordering experiences that overcome many of the issues that arise whilst attempting the short-term, on-demand replenishment of perishable inventories. By providing the ability to duplicate complex repeat orders, monitor supplier inventory levels, and take advantage of multi-device eCommerce functionality, such as mobile ordering on the shop floor, organic food and beverage suppliers are cutting down on both the time and effort required on the part of retailers to provide goods to their customers. 2. Agile logistics networks are catering to local, fragmented supply chains. In a sector prone to fads and unexpected changes in consumer behavior, close collaboration with logistics partners is a necessity for organic food distributors. It is becoming increasingly common, for example, for logistics companies to offer integration with the eCommerce platforms of third-party distributors so that they can provide real-time information to their customers about the transit of goods. In particular for organic food distributors, the logistics challenges that apply uniquely to local, fresh and sustainably-grown food are being overcome by fostering a dialogue with those elements further down the supply chain. Whilst local food supply does have its benefits, largely relating to the shorter transit time and consequent lower levels of waste, problems do arise when dealing with lots of independent growers. This has meant that suppliers have had to shift away from a one-size-fits-all logistics solution in favour of a flexible and dynamic one, often operating with numerous logistics providers. 3. Data collection and sharing is enabling traceability and safety Integration and collaboration, again, are the key watchwords here. As has already been mentioned, organic food distributors are particularly vulnerable to mishaps across the supply chain. Nowhere is this more evident than in relation to food safety and traceability, where a problem caused by a farmer or processor can dramatically harm the reputation of a distributor or retailer. Because of this, food safety and hygiene standards and industry best practices need to be communicated effectively across all the companies involved in the supply chain. Because the quality of organic food is easily ascertained by consumers and is also a key competitive differentiator, the demand for quality assurance on the part of retailers is growing. Given this importance, it is vital for distributors to be proactive about offering these kinds of guarantees along with cultivating the types of relationships and integrations that enable the free flow of information down the supply chain. 4. Customer-facing distributors are empowering consumers Distributors are increasingly undertaking the development of customer-facing profiles aimed at end consumers. It isn’t enough that informed consumers are convinced of the ethical standing of a particular supermarket chain or food retailer. They want to know, for example, about the carbon footprint of the food they’re eating, its provenance, and also about the initiatives of the companies involved in its processing and distribution. Very often, the responsibility of collecting and updating this kind of information will fall on the shoulders of the supplier. Retailers expect to have ready access to particulars relating to all points of the supply chain. The growth of eCommerce allows suppliers to provide it. But it’s also important that they formulate their own customer-facing “brand” on the basis of this information in order to contribute to the “added-value” of the final product. What are your thoughts about these modern-day industry challenges facing organic food distributors? Let us know in the comments section below!