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Dr Janet Huang
Dr Janet Huang
Published Nov 14, 2017
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Executive Summary
Food Distribution, which involves the transportation, storage and marketing of food to the general population, is an important process that is often undermined. Food distributors have to maintain and ensure food safety, reduce damage of goods and manage timely deliveries, all at the same time. They also face challenges in meeting with the lifespan of the products, refrigeration needs, and multiple points of delivery. The importance of Food Distribution is gaining traction, due to the convenience and popularity of online food-related platforms, growing consumer affluence and the need to address the lifestyle of busy working executives, amongst others. These trends, which are elaborated below, bode well for food distributors globally.
KEY HIGHLIGHTS
- Technological transformation of Food Distribution. The advent of online food-related platforms has provided consumers with an alternative to conventional supermarkets as well as access to a wider selection of goods. While online food-related platforms are not substitutes for conventional supermarkets, consumers enjoy the conveniences that come with it. For instance, the comfort of shopping from home and having the goods delivered to the doorstep, which meets the lifestyle of busy working executives today. In addition, food manufacturers and distributors are leveraging these platforms to market and sell their products, either through collaborating with e-commerce players, or by incorporating an online store within their website. Food distributors, therefore, stand to benefit from maximising the use of such technology. These benefits include, but are not limited to accessing a larger consumer base, and new potential markets worldwide.
- Rising affluence and increased spending on food. Consumers tend to spend more on food when income increases. Such spending indicates changes in buying attitudes, which, in turn, affects the demand for food - in particular, the quantity purchased, quality sought and varieties offered. Furthermore, a change in buying attitudes is also reflected in the dining habits of consumers. Rising affluence indicates more expendable income to eat out. This, coupled with the willingness to spend, propels the demand for food from the retail and hospitality markets, and thus, the need for more Food Distribution services.
- The need to feed 10 billion people by 2050. Over the last decade, the global population has increased significantly, at an estimated 80 million persons per year. As there will be more people to feed, there is a need for further food supply, particularly in the world’s most densely inhabited countries like China and India, where population is expected to reach 1.4 billion and 1.7 billion, respectively, by 2050. The impending growth in population numbers requires food to be distributed further globally, leading to the need for extended food supply and distribution networks. For food distributors, the increased need for distribution networks signals opportunities (and a challenge) to serve a larger global market.
- Growing food demands from the travel industry. Globalisation has facilitated open skies agreements, and hence, the growth in numbers of people travelling. As a result, airlines are increasing their inflight catering services to meet this demand, which, in turn, allows food distributors the opportunity to support them. Likewise, through the interconnectedness of trade, sea travel has also been made more accessible. Increasing trade between countries has also resulted in the rise of the number of vessels at sea, providing food distributors the opportunity to supply provisions to cruise ships, passenger and commercial vessels.
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Ravi S. Sharma
Educator & Research Advocate
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Have you thought about blockchainning for food security?
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