Financial services leader Rabobank Group's global food and agribusiness research and advisory recently released a report that revealed many food companies lack organizational adaptability and would be ill-equipped to adjust to new sourcing, production or logistical challenges they could face in the coming years. These problems will only continue and worsen as the global population continues to grow and the demand for food products increases.
As the market grows steadily, food companies must take new concerns into account and better address the business problems they currently have. One of the issues that will only be compounded in the coming years is a desire to beat short-term price rises. Rabobank's report noted that the preoccupation of companies with these minor spikes could contribute to its inability to cope as demand grows. These enterprises could perhaps be better served and enjoy greater cost savings by focusing on strategic sourcing and product availability, rather than focusing solely on prices that may rise for a few weeks at a time.
Proper supply chain management is also a critical concern, as companies that fail to have properly functioning processes now aren't likely to succeed in the future. Implementing strong procedures with the proper risk mitigation tactics is essential for firms that want to remain competitive and ensure they're able to meet market demand in the future.
However, stronger cooperation with partners can also play a role in determining a firm's ability to be successful and reduce operational expenses. Companies that have close relationships with suppliers, transporters and manufacturers can ensure they are aware of any changing conditions that could alter processes before they occur and avoid any potentially risky situations, or even streamline processes to ensure production and sales goals are being met while a business is still limiting expenses.