Confectionery companies identify market diversification with digital tools
Sophie Jewett, of York Cocoa House, has noted that diversification in supply chains is a key concern to the sector. Pic: Neill Barston
A major trend of confectionery companies seeking greater diversification within supply chains in response to challenging and uncertain market conditions, according to analysis from digitally-focused financial technology group, Phlo Systems, writes Neill Barston.
The UK-based firm’s recent industry assessment found that many smaller and medium-sized enterprises within the sector faced notable challenges without a designated strategy to enable them to rebalance amid testing conditions, which required a flexible approach.
Clearly, the combination of pandemic pressures, Brexit trading complexities, and near-record levels of inflation in the UK worsened by the ongoing war in Ukraine have collectively impacted across a number of sectors, including companies operating within the confectionery space.
Saurabh Goyal, CEO of Phlo Systems, which has worked with businesses in the wider supply chain including Ghana cocoa processing company Chocomac and Scoopega Scoops Cocoa and cashew firm, noted that businesses faced ‘more confusion’ without a clear direction in navigating present turbulent conditions, with many firms utilising outdated systems to monitor business conditions.
“Getting on the right track following the last few months of crises requires purging any business practices that prevent quick response to volatility – such as addressing the use of clunky legacy systems, like Excel spreadsheets, filled with outdated data.”
“Messy data has become a weed that many businesses have grown accustomed to, but by adopting a digital transformation strategy, they can turn those neglected weeds into a lush garden of supply chain opportunity,” noted the business founder, who had gained previous related industry experience working in risk management and IT for global ingredients business Olam.
He added that once companies take a step towards turning messy data into a supply chain opportunity, they can then move onto stage two of their digital transformation and begin fine-tuning better data into actionable business insights. This can be done by aligning data on suppliers, customers, processes, and technology all in the same place to create advanced predictive analysis.
Commenting, Mr. Goyal says: “Digitising the international supply chain is very much like turning it into a digital Swiss army knife – the right tools at the right time – to cut through the uncertainty and react with synchronised agility that can quickly balance cost and variability in the face of real-time demand. Your business can even action corrections at the touch of a button.”
“The ability to pivot your approach with live data is an essential component to diversifying your supply chain so, if one supplier falls short, you can shift your approach quickly to remain ahead of the game.”
Commenting on conditions, Sophie Jewett from York Cocoa House agreed with the digital firm’s analysis. She noted: “Managing differing and sometimes outdated supply chain systems are part of the growth phase challenges of start-up businesses. Particularly when technology and consumer demands require innovative approaches that are often not compatible with the status quo. Businesses can quickly find themselves using tools that are not fit for the purpose that needs to be able to evolve with them.
“It’s challenging to build systems when at the outset you are still exploring new markets, products, and processes, it makes manual methods a sufficient default – but in today’s world and operating online we are demanded to be a 24/7 business that can engage in multiple geographies – finding effective, timely and reliable ways to record, store and share information throughout the product life cycle is becoming more and more critical.”
“As a confectionery business, we are focused on the celebratory moments of indulgence for our customers but we must increasingly consider agility, waste, and rapidly pivot for seasonal and changing consumer demands. It’s essential to focus on value and value-added activity and to consider resources wisely and be able to work with effective and reliable data to make smarter strategic decisions, save costs and identify emerging trends as quickly as possible.”
