Rising Inflation is hitting the Food and Beverage Industry harder than most. Prices are surging, overheads are increasing, and profit margins are slipping. With inflation rates hitting a 3-decade high, running a Food and Beverage businesses has never been more challenging than now.
As inflation levels look set to increase into 2023 food and beverage businesses need to implement measures that combat inflation or you could risk going out of business. Here are 5 Strategies Food and Beverage Businesses can use to combat rising inflation.
1. Streamline and Automate Processes
There’s no other way of saying this but the only way you can combat surging inflation is to minimise costs where possible. The first way Food and Beverage businesses can combat rising inflation is to streamline and automate daily processes.
Food and Beverage businesses should look to implement automated technologies that streamline operations and reduce manual labor. By using a Food and Beverage Management Software like EasyVend, businesses can automate many daily tasks of running a food and beverage business like ordering, inventory control, receipting, invoicing and much more. The benefit of automating your processes is it will ultimately reduce your costs and maximise efficiency.
Related Article: 5 Tasks Every Food Distributor MUST Automate in 2021.
2. Business Reporting
As costs grow and margins slip, reporting has never been more important! To combat rising inflation food and beverage businesses need to implement a strong reporting system.
Reporting will ultimately make or break your business. Your business needs to know vital information fast, so that you can make strong, strategic decisions that push your business further into the future. The benefit of having a strong reporting system in place is it gives your business the ability to adapt to the current environment as inflation grows.
Related Article: How Food Distribution Software Improves Reporting.
3. Analyse Your Pricing Strategy
When your costs go up, the price you sell your products for has to follow. There is no point selling your products at a loss. To combat rising inflation, your business needs to frequently review your product prices.
Frequently reviewing your products pricing will give you the opportunity to adapt to the current market conditions and ultimately minimise the risk of insolvency due to rising costs. Before you consider updating your pricing strategy it is important that you research your competitors pricing and consult with your accountant to understand how far you should increase your prices to still maintain profitability.
4. Reduce Expenses Where Possible
It’s no secret, the only way that you are going to combat rising inflation is to reduce your costs. We get it, when running a food and beverage business there are some areas where you are not be able to reduce costs eg. Products, but there are other ways you can minimise expenses and not impact operations or customer service.
Some expenses that your business should review is overheads like utility providers, internet providers, payment suppliers etc. Shop around see what providers are offering and see if they will better what you are currently paying.
Another way to reduce cost is to limit the amount of staff you have rostered on at a particular time. Understand your demand and only roster on the appropriate number of staff. The last thing your business needs at a time like this is having too many staff working and not enough demand.
5. Maximise Repeat Customers
It is so important to build and maintain repeat, loyal customers. At the end of the day, your repeat customers are what’s going to keep your business going. To combat rising inflation, food and beverage businesses need to maximise customer retention.
Businesses need to go out of their way to ensure loyal customers keep purchasing at their regular interval. The reason why repeat business is so important is because it will help you forecast and base your future business decisions on. If you know you have a certain amount of revenue being generated from loyal customers per month you can plan appropriately.
Inflation is hurting everyone, especially businesses. However, there are ways to combat surging inflation and still generate a heathy return. The 5 strategies mentioned above are a few great ways Food and Beverage businesses can combat rising inflation in 2022.
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For food and beverage businesses, EasyVend supports and automates every part of your business, freeing you up to grow your sales simply, unlike other ERP systems.
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