Amid pandemic-driven changes, where and how people work is evolving. And, according to a new report from Deloitte and FMI-The Food Industry Association (FMI), the food industry is already planning its steps toward what’s next for the workplace.
To find out how food industry retailers and suppliers are preparing for the “future of work” (FoW), Deloitte and FMI conducted 15 interviews and over 150 surveys with food industry leaders. Nearly half of the surveyed suppliers said evolving demands from retailers was the top influencer of changes to their work. During the pandemic, retailers counted on their suppliers to solve emerging challenges, particularly related to the rise in e-commerce purchases. And suppliers responded, adjusting packaging and shipment logistics to better accommodate shifting consumer purchasing behaviors.
Increased at-home consumption (48%) and margin pressure (46%) were also primary influencers of change for suppliers, prompting them to shift more of their food service supply toward retailers and find ways to deal with increasing costs.
Envisioning the future
For 41% of surveyed food companies, the most important step toward shaping their own FoW was building an organizational culture that promotes growth, adaptability, and resilience. However, what they primarily hoped to get out of FoW planning was growth in sales and market share. Only about 7% shared goals toward boosting innovation, increasing capacity, and cutting costs.
But how prepared are they for the next normal of work? Less than half of survey respondents said their companies were ready for what’s to come. Only around 40% of suppliers said they had a clear vision of how work in the food industry will evolve within the next few years and a detailed strategy for approaching the changing nature of work.
In terms of clarity of vision for the future, retailers were more than 20% ahead of suppliers, which Barb Renner, Deloitte’s vice chairman and US Consumer Products Leader, attributes to what they’ve experienced over the pandemic. Retailers were able to see firsthand whether shopping behaviors like e-commerce would become important to their future and plan accordingly.
It’s a different story for suppliers, though. “If you are a product supplier,” Renner says, “you probably see more open switches still. Is something entirely different happening in your food services channel? Are you going to have your own DTC offering? How are you going to increase your supply chain resilience and deal with commodity inflation?” For many suppliers, challenges like these took precedence over FoW planning.
Investing in the future
The majority of food companies are making investments toward their FoW initiatives. However, only 11% of suppliers have made significant investments — most (51%) have invested moderately, and 31% have made limited investments. Nearly 20% of surveyed executives said a lack of skills, culture, and experience was holding them back from sizable investments. But half were experiencing “too many competing priorities” for them to designate a large amount of resources toward FoW initiatives.
Those competing priorities are the result of “dealing with the return of their foodservice channels, supply chain issues, and inflation,” Renner says. “Product suppliers are working in a much more dynamic environment than before the pandemic. There is a lot out there to grab their attention.” But tackling some of those other priorities may actually aid their FoW planning in the grand scheme of things.
Hiring for the future
Seven in ten executives considered talent/HR leadership to be a champion for their FoW initiatives. The same number said they’ve been transparent with their employees about how their work is changing and have their employees’ trust going forward. But while their current workforce may be onboard, talent acquisition and retention is an ongoing struggle.
Retaining talent and driving company culture were the top workforce challenges for 45% of product suppliers. Not far behind was attracting employees with emerging, high-demand skill sets (36%).
Deloitte’s report notes two points that are complicating the battle for talent in the food industry:
In order to fill vacancies, other industries are no longer requiring degrees for some of their roles, which makes them competitors for the less-credentialled workers on which food companies have relied.
Job seekers now see the appeal of remote and hybrid work options, so companies that can offer such options will stand a better chance of securing talent.
Renner says that while several suppliers are tackling the labor shortage by raising wages for frontline workers, “the smart ones are doing more than that.” Some of those actions include:
Companies that aren’t already taking significant strides toward FoW readiness may soon fall behind those that are. Deloitte and FMI’s report recommends that food companies put people at the center of their planning and make FoW investments a top priority.
The “future” part of the future of work is what Renner believes is causing companies to put it on the back burner, focusing on more immediate issues first. “That’s a mistake,” she says, adding that the future depends on how companies invest today. “It’s like savings and compound interest. The earlier you get started, the bigger payoff you get from each investment.”
And because the food system is a complex network of manufacturers, packaging companies, retailers, and many others, success in the future of work will take a collaborative effort. Many food industry companies are facing similar challenges, and their best hope for tackling those challenges is to do so together.
By Krystle Morrison
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