5 Challenges Facing the F&B Warehousing Industry in 2022

January 19, 2022

It’s an exciting – and challenging – time to be in the food and beverage warehousing business. Today, the market is experiencing tremendous growth, with experts predicting F&B warehousing to grow by more than $210 billion through 2025, progressing at a CAGR of approximately 15% during the forecast period. Despite this growth, productivity in the warehousing and storage industry dropped 7.6% last year. Much of this can be attributed to growing pains as companies such as food warehousing businesses try to increase warehouse capacity and adapt to changing customer expectations, new technology, food and beverage e-commerce demands, and more. 

Five Challenges for Food Warehousing and Distribution

Let’s take a look at the top five challenges that the food and beverage industry, and warehouses in particular, are trying to manage and solve.

1. Warehouse Capacity

Many warehouses and distribution centers are built based on the needs of the business at the time of construction. Of course, the F&B industry is always evolving, and the industry is experiencing rapid growth. Today, people are purchasing more groceries and other food products online than ever before. In fact, food manufacturers are experiencing nearly a 120% increase in direct-to-consumer sales. While some of this can be attributed to the pandemic, it’s unlikely that most will go back to their old ways once the threat is over. 

To meet demand, F&B companies are rapidly expanding product lines and SKUs to include more flavors, healthier offerings, different packaging materials and sizes. The result? Food and beverage warehouses quickly reach capacity (for example, when it comes to organic food warehousing, product must be kept separate from all other goods). So what can fulfillment warehouses and distribution centers do? To maximize space, F&B warehouses may want to consider expanding vertically, not horizontally. This can be accomplished by installing customized storage solutions using pallet racks, industrial shelving, and other material that matches the layout of the warehouse, improving food and beverage storage capacity and efficiency.

2. Product Safety & Traceability

According to the Center for Disease Control (CDC), approximately 1 in 6 Americans get sick from contaminated food or beverages and 3,000 die from foodborne illness every year. The U.S. Department of Agriculture (USDA) estimates that these illnesses cost the United States more than $15.6 billion each year. This puts a lot of pressure on companies to strengthen food safety for warehousing and distribution. Of course, as F&B manufacturers continue to add more SKUs to their product lines, with many having different and specific storage and handling instructions, this becomes more and more difficult for food warehousing companies. 

To help ensure that food safety is not compromised, and product is not spoiled costing the business money, warehouse operators and workers need to be cognisant of first-in first-out (FIFO) procedures, food temperature, humidity levels, and more. To manage all of this, many F&B businesses are investing in new processes and technologies such as Warehouse Management Systems (WMS). A WMS, most of which are cloud-based solutions, provides transparency into the supply chain and helps ensure that goods and materials move along in the most efficient and cost-effective way. 

A good WMS keeps an eye on warehouse design, inventory tracking, picking and packing goods, receiving and put-away, shipping, labor management, yard and dock management, and reporting. It also improves food warehousing standards, helping support product traceability. This is also important for accelerating responsiveness when there is a product recall; the WMS helps warehouses identify which products were made with the affected goods so that they can be quickly withdrawn from the supply chain.

3. Inventory Scheduling & Control

This goes hand-in-hand with food safety practices and traceability. F&B warehouses handling perishable foods, beverages, and ingredients with short shelf lives must constantly meet transport and storage demands. If they don’t have a system in place to achieve this goal, they face shortened selling windows, spoiled or damaged products, and unhappy customers (not surprisingly, all of this results in lost profits).

To manage food inventory scheduling and control, once again many F&B warehouses are turning to a modern WMS. With a smart WMS in place, food warehousing operators can control and monitor inventory, gaining a 360-degree view of product in real-time, from the moment it enters a warehouse until it’s transported out to stores or end-users. The system allows them to record changes in inventory, anticipate inventory needs, and much more.

4. Employee Safety

The warehouse can be a dangerous place. Accidents at docks or those involving forklifts, conveyors, materials storage, and manual lifting can result in injury or even death. 25% of all industrial accidents occur at the loading dock while forklift accidents result in nearly 35,000 serious accidents annually.

Aside from the devastating impact on those injured and their families, F&B warehouse accidents affect the business itself. Warehouse accidents account for 95 million lost workdays every year, and accidents result in a loss of productivity, worker compensation claims, lowered employee morale, and potential OSHA fines. To ensure accidents remain at a minimum and warehouse employees remain safe, F&B companies need to regularly keep track of potential maintenance issues throughout the warehouse and consider installing safety features such as dock alerts, lighting, and safety gates; as well as rack netting, end guards, and pallet support bars. Download our warehouse safety checklist here.

5. Technology

Digital transformation is poised to forever change warehousing, distribution, and fulfillment. Today, the food and beverage industry has the largest revenue share in the logistics automation market, with 80% of its total investment in equipment and machinery. Automation improves efficiency and makes holding just-in-time (JIT) inventory more practical. This allows warehouses to decrease or diversify their on-site inventory, which offers more flexibility when demand shifts and stock needs to be changed quickly. This automation advantage is critical for F&B warehouses since JIT shipping maximizes shelf life. In addition, automation solutions like flow-through sortation improve the accuracy and timeliness of store replenishment, giving warehouses more time to adapt as necessary. 

While robots – defined as machines that resemble humans and perform tasks on command – remain rare in U.S. F&B warehouses, they may not be too far off for some companies. Today’s robots are becoming less expensive and more precise in their movements, reducing product damage while allowing them to do more complex tasks; many also have sensors and cameras that enable them to automate more processes. Collaborative robots, or cobots, have also emerged in recent years. Cobots are designed to work safely alongside warehouse employees, handling the more dangerous tasks while also increasing operational effectiveness

Because of the cost of adopting new technologies, it’s important for F&B warehouse and distribution centers to truly understand their needs and the intended goals for their F&B technologies, as each is different and includes various features. You’ll want to weigh the pros and cons and make sure you’ll see a healthy ROI over the shortest amount of time.

How SSE Helps F&B warehousing Companies

Is your F&B business feeling the strain of any of these distribution challenges? If your warehouse is located in Florida or South Georgia, the professionals at Southern States Enterprises (SSE) want to help. For over 20 years, companies in the area have relied on Southern States Enterprises as the leading name in motive power, docks and doors, industrial pallet rack, pallet storage systems, and warehouse equipment. 

We know how to expand your facility vertically, allowing you to save money, increase efficiency, improve operations and employee productivity. We also know how to make safety a priority, and know exactly what you need to keep your docks, doors, and racks safe and efficient. Our field service technicians will also keep your facility running smoothly and safely at the lowest possible cost through a planned maintenance and repair schedule using a warehouse safety checklist. And, when it’s time for a new part, a replacement part, of a technology upgrade, we can help and make recommendations and find the right equipment for you.

Visit our F&B Industry Page to Learn More!

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