How EDI can help you launch a direct-to-consumer sales channel, boost revenues and cut out the middle man.

The global pandemic has transformed the UK food & beverage industry almost overnight as consumers switch from physical to online shopping. During the height of lockdown, online grocery sales surged 91% year-on-year according to analysts at Kantar, with one-in-five UK households buying food & beverage products online. Meanwhile, in the US the growth of food & beverage ecommerce is set to nearly double from 8% to 15% by the end of the fiscal year.

This seismic switch from physical to online food & beverage sales channels presents huge challenges. But it also offers some golden opportunities for manufacturers with the right future-proofed supply chain and distribution technology, such as Electronic Data Interchange (EDI).

Food and Beverage SMEs can follow in the D2C footsteps of Heinz and PepsiCo

As a result of food & beverage’s shift online, some brands, such as tinned food giant Heinz, are opting to bypass retailers altogether by adopting a direct to consumer (D2C) sales model. Heinz rolled out its D2C ecommerce website in less than three weeks during lockdown, bundling together tinned food and table sauces. Meanwhile, consumer goods giant PepsiCo followed suit in the US launching two websites to sell bundles containing top-selling brands such as Quaker, Gatorade and Tropicana.

Generally speaking, tier-one operators like Heinz, PepsiCo and Aldi, with big budgets and enviable resources, are future-proofing their operations faster and more comprehensively. Meanwhile, SMEs with less impressive firepower have generally struggled. But this needn’t be the case. There’s no reason why smaller food & beverage brands can’t launch a D2C offering if they’re armed with the right technology.

EDI can help food & beverage manufacturers rise to the direct-to-consumer challenge

A report by LCP Consulting suggests that food & beverage brands boost their revenues by 5% when they open up a D2C channel. This is a great way for smaller businesses to achieve better margins while establishing new revenue streams and lines of business.

Smaller-scale UK-based organic baby food brand Piccolo, for example, pulled off this feat, launching a temporary webshop in just three days during lockdown. Smaller food & beverage challenger brands have also recently joined forces to launch Mighty Small, an online supermarket for independent food & beverage firms.

One of the biggest D2C challenges for SMEs is managing volume, especially when orders spike during a pandemic, or when using a marketplace like Amazon. Managing tens of thousands of customer orders in one day may be impossible for a human team. However, when an SMEs’ enterprise resource planning system (ERP) is connected to EDI, mission-critical information (customer names, addresses, products and quantity) is automatically shared without the risk of human input error. Market-leading EDI solutions also include address verification, ensuring that orders are sent to the right address first time, every time.

Real-time inventory is also a critical ingredient of any D2C operation. Manufacturers must be confident the products on their website are in fact in stock. An ERP solution connected to EDI not only ensures you’re keeping up with the volume and sheer demand, but that you are doing it accurately and efficiently.

In addition, if an SME is using a marketplace such as Amazon, with the right EDI there is often no need to invest in an eCommerce platform at all. The EDI solution will be able to manage the high frequency of message exchange required.

EDI – enabling food & beverage firms to adapt at lightning speed

Months into the pandemic, food & beverage manufacturers alike are still having to adapt at lightning speed. They’re grappling with an increase in demand, a surge in invoicing, the need to change assortment/inventory quickly and the necessity of switching suppliers to de-risk and maintain product availability.

The challenge for manufacturers entering the D2C arena is remaining customer-centric and demand-driven when the situation is fluid and without precedent. The answer here is the flow of accurate, granular and timely data and the ability to act upon that data at speed.

The food & beverage manufacturers with the right technology, such as EDI, have coped much better than their less digitally transformed competitors. That’s because, compared to conventional email and excel systems, EDI automates and digitises data flows between trading partners, speeding up processes, increasing accuracy and saving money.

For example, food & beverage manufacturers with a new D2C channel and an EDI-powered trading network can switch suppliers at speed, process an influx of orders faster and more accurately, and change the contents of a shipment across multiple systems with minimum fuss. With EDI it’s also possible to expedite payment processes and reconcile invoices and ASNs in a fraction of the time.

When it comes to launching a new D2C sales channel, future-proofing your supply and distribution networks with EDI solutions in this way frees-up your employees to do more value-added tasks. It also reduces your exposure to future shocks, such as a second wave of Covid-19 or trade disruption resulting from a no-deal Brexit.

EDI is no longer a tool reserved for tier-one food and beverage firms

Cloud-based EDI is a natural choice for SME manufacturers in search of future-proofed technology which will enable them to grow online. It is no longer a tool reserved for tier-one food & beverage brands. These days EDI solutions are also generally considered low risk, unlike some newer technologies. That’s because they have been tried and tested across a wide range of sectors.

Transalis simplifies every aspect of implementing an EDI solution. Our easy to understand and competitively priced bundles, flexible switch on/off services features, backed up with the price promise of no hidden costs such as VAN charges is a great option for food & beverage manufacturers looking to introduce a D2C channel. There is also the added benefit of future-proofing their supply chains and distribution networks during a period of great risks, as well as great opportunity.

Information source:
Kantar
Forbes
Food Manufacture


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