This article was updated in March 2023 to reflect current trends and new information.
The food and beverage (F&B) industry is challenging to manage in terms of inventory and resource planning. The problems it faces include tough competition, seasonal demands, narrow margins, limited shelf-life, strict health and safety requirements… The list goes on.
Food and beverage inventory management is essential to reducing waste and overheads. This guide breaks down the challenges of food and beverage inventory control, the solutions available, and more.
In this food and beverage inventory management guide
The challenges of food and beverage inventory management
1. Seasonal and consumer demand
In the F&B industry, shelf-life of product components is so short that it must be optimised for consumer demand. When we consider the rapidly changing nature of consumer trends and the availability of seasonal produce with greatly fluctuating prices, this challenge becomes greater.
Food and beverage inventory management software helps businesses manage fresh ingredients.
2. Many units & many components
Online inventory management software is needed to meet the demands of this task. Food and beverage companies or restaurants have a myriad of recipes, all with different units of ingredients that are not the same as the units of raw components received into stock or the units of finished product going out.
This can make for a resource management nightmare if it was not for online inventory management systems; inventory management software allows businesses to quickly break down their incoming stock into smaller units.
3. The risk of contamination
The food and beverage industry can be more stringent than other industries because of the high food safety requirements. Failure to follow the requirements can lead to food contamination or spoilage for manufacturers.
Traceability of all ingredients is paramount to ensure any damaging effects on consumers is eliminated for future batches. Lot traceability, batch and serial number tracking are vital for this task as they allow complete traceability and transparency of ingredients throughout the supply chain.
4. Shelf-life surveillance
It is nigh impossible to successfully keep track of all ingredients’ shelf-lives so that waste is eliminated and overheads are optimised.
That is, if automated software is not used.
Inventory management software is capable of surveying the shelf-lives of all ingredients and automatically alerting production management as to when a product is nearing the end of its use-by date.
This ensures the production, marketing and sales processes can be streamlined so that product is almost always used in its prime, reducing the need for wastage and discards.
Transportation can also be a significant challenge for the F&B industry given the complexity. The whole process is extremely time and condition-sensitive and therefore there is no room for error.
To reduce overheads, time and labour costs, businesses might consider scheduling stock transportation so that multiple shipments can come at once, or even offering discounts to customers based on where you would like the product to go, considering efficiency and optimised shelf-life.
Any food and beverage business that hopes to compete must be able to capitalise on opportunities – that’s where inventory software can help.
The solution: Food & beverage inventory management software
Food and beverage inventory management can be done in a variety of ways. Often, companies will rely on a combination of methods, including web apps, written notes and spreadsheets. These processes can become troublesome, however, especially in larger companies with multiple departments.
A singular, streamlined method for food and beverage inventory management can be much more efficient and effective.
6 benefits of food and beverage inventory software
While food and beverage production may present unique inventory challenges, there’s a simple and affordable solution: Food and beverage manufacturing software.
Below are some of the main benefits of inventory software in food and beverage businesses
Compliance is vital to sustaining a successful food or beverage business and failure to do so can result in operational downtime, shutdowns or financial loss.
Inventory management software helps reduce the risk of human error and provides greater functionality for batch and lot traceability. This provides a more accurate and up-to-date report on your food inventory status. The improved visibility allows you to track products quickly and easily in the event of a contamination, and to efficiently undertake product recalls if necessary.
2. More predictability
Predictability is a significant part of effective inventory control and food inventory safety. In an industry reliant on perishable products and limited shelf life, overstocking is a major issue. Inventory management enables high levels of business intelligence and improved demand forecasting.
Tracking core KPIs with inventory software can be a game changer in the food and beverage industry.
3. More traceability
Inventory management software facilitates a more precise monitoring of product ingredients throughout the supply chain. Detailed reporting enables more ready discovery of wrong ingredients, while also addressing contemporary marketing and consumer trends such as ‘farm to fork’ transparency.
4. Better planning and scheduling
Timeliness is everything in food and beverage inventory management, which places an added pressure on supply chain processes. Production planning and transportation schedules work to strict timetables to preserve ingredient and product quality control.
Scheduling functions of online inventory management software provide a streamlined method to manage the production and shipping schedules. Automated timetables can be arranged by priority to fit with the company’s current requirements.
5. Reduce costs and wastage
Cloud-based inventory systems allow you to monitor raw materials from the time you receive them to the moment they are sold as a finished beverage. This allows you full oversight of the entire process, and this way you can get an understanding of how best to reduce production costs.
Being aware of the whereabouts and condition of raw materials also allows you to estimate the best times for replenishing stock. This can help prevent the accumulation of expired items, which in turn will avoid the costly issue that is excess or obsolete stock.
6. Improve product pricing
A reliable cloud-based inventory system will allow you to see the cost of every individual ingredient that goes into your beverages. This way, you can come up with sales prices for each finished product that adequately offsets production costs and helps boost your profit margins.
This includes enabling you to track bottles, kegs and barrels, as well as expiry dates of raw materials. Again, this will allow you to determine accurate pricing for finished products that best accounts for production and ordering costs.
Food and beverage inventory management gives the ability to organise and interact across departments, from anywhere, at any time.
Why Unleashed is the best inventory software choice for F&B manufacturers
There are several inventory management solutions available for businesses. Unfortunately, many of these systems do not address the unique problems mentioned in this article.
Call us biased, but when it comes to food and bev, Unleashed inventory management software is the ultimate solution.
Why? Because we’ve specifically designed our software to meet the needs and concerns of food and beverage producers worldwide.
With Unleashed, food and beverage producers can:
- Streamline operations through batch planning, scheduling and ingredient forecasting
- Manage, plan and monitor inventory levels in real-time
- Eliminate costly manual processes
- Provide the same information to all staff
- Remotely access information when offsite though our mobile sales app
- Reduce delays and bottlenecks through more efficient inventory control
- Improve inventory management through tracking and recovery
- See at-a-glance when products are reaching use-by dates and take measures to reduce losses on these items.
Cloud-based inventory planning tools can help breweries work smarter by shifting individual areas of inventory management into a single, easy-to-use software product. Cloud software can be used to streamline planning by automating the entire process, reduce waste and the cost of stock-outs.
8 features to look for in food and beverage software
1. Inventory management
Many large food and beverage organisations rely on overly sophisticated, resource-sapping and expensive Enterprise Resource Planning (ERP) systems to meet their requirements.
However, medium-sized food manufacturers are under no obligation to make the same sizeable investment of working capital and resources in setting up an integrated inventory management software solution for their business.
The right inventory management system is key to fostering greater efficiency, productivity and profitability for businesses.
2. Batch tracking
Total visibility into the movement of each item through the supply chain creates a ripple effect which generates greater efficiency and efficacy along every node — from demand forecasting, through to purchasing, manufacturing, distribution and sales.
A batch tracking feature allows food manufacturers to track a batch of products through all the stages of manufacturing; from processing right through to distribution. Batch tracking provides manufacturers the freedom and flexibility to trace all of their products quickly and easily.
This is especially relevant for food manufacturers as it reduces losses if there was a compromised batch. They will be able to easily identify and locate the batch.
Batch tracking is a critical feature of food and beverage manufacturing software.
A smart food and beverage software solution is able to leverage the power of manufacturing automation to further enhance the efficiency of procurement, production, distribution and sales.
Without the capability to track, trace and account for stock from source to sale, process managers have no dependable and accurate way to enforce inventory protocol.
4. Data access
Another key feature to look for in food manufacturing software is convenient access to data.
Cloud storage means data can be accessed anywhere and any time by someone with an internet connection. This allows users within your operation to keep up-to-date with changes. Products can be moved between storage locations and on to the next step in the supply chain – all while keeping everyone in the loop.
5. The ability to scale and evolve for growth
Greater operational efficiency and productivity leads to business growth and success. And while it seems counter-intuitive, success can cripple a business that is unprepared.
Systems built on the need to store data in separate spreadsheets or that require manual updates by staff do not tend to scale well as businesses get larger. Food inventory management software can handle large increases in size without becoming significantly more complex or costly.
At a certain point the ability to scale for growth becomes critical.
With the right software at their disposal, procurement managers are better able to integrate their data with their suppliers. This ensures that lead times are kept to a minimum and the lines of communication are open, clear and free of misinterpretation.
This leads to a marked decrease in the under- or oversupply of inventory. When dealing with perishables, this can lead to significant savings as a result of less wastage or delays in production due to inventory being out of stock.
7. Smooth integration of updates and improvements
In many food and beverage businesses, staying at the top requires frequent re-thinking of systems and processes to ensure efficiency is where it needs to be.
This frequent change is positive from a competitive perspective, but in inventory management, the goal is for as little disruption as possible. If things have to slow or shut down for even a short time, this begins to erode any advantage of the new change.
Some software systems may be better than others in this regard, so taking time to find what is best for your business is important.
8. Reporting and planning
When margins are tight, being able to collect and review data from your business is critical. The right food and beverage manufacturing software provides managers with a range of reporting and analysis tools so they can be on top of the numbers. The software allows unit or concept sales, purchases, profit and loss to be viewed in real-time.
Past sales data can be processed in user-defined formulas to create a basis for planning, and managers can forecast for a range of days, weeks or months.
CASE STUDY 1: Gourmet Organic Herbs
Fourteen years ago, Gourmet Organic Herbs were operating from the kitchen table at home. Now they send their herbs and spices all over Australia. Owner Anibal Zarate aims for big business delivery, with that same kitchen-table approach to customers, sustainability and quality.
When Anibal was still involved with the production side of the business, he knew everything that was happening on the floor, such as how much stock was on hand and what needed ordering.
However, since removing himself from production, he has had to keep an eye on stock levels in other ways. Anibal soon realised they needed a more automated way of doing things.
Since adopting Unleashed, Gourmet Organic Herbs have improved the efficiency of their business – the company now sets appropriate budget and goals based on accurate data, and their sales rep has a more efficient way of handling their sales process.
Unleashed has had positive impacts not only on the company, but also for the staff. As the software is cloud-based, it allows Anibal to remotely access Unleashed. This allows him to have more time to work on the business, which greatly helped his work/life balance.
CASE STUDY 2: Brandini Toffee
Brandon Weimer and his best friend, Leah Post first started Brandini Toffee to raise money for a class trip. From these modest beginnings, they have grown and created a gourmet toffee brand.
Having started with paper records and handwritten logs, the duo wanted an inventory management software that would provide the data visibility and organisation that was missing from their business. As a food manufacturing company, Brandini Toffee needs fail-safes in case of a product recall; they needed inventory management software that had tracking and tracing features.
When it came to choosing a food inventory system, Unleashed was a clear winner for Brandon. Unleashed ticked all the boxes – a cloud-based inventory management system for tracking products, that was easy to implement with comprehensive training and support.
As their business continues to grow, they now have a software that will grow with them.
Unleashed has provided the certainty of batch tracking so they no longer worry about the traceability of a product. Brandon and Leah now have a food manufacturing software system they can rely on for product visibility and inventory management.