EDITOR
Kirstyn Brown
kbrown@annexbusinessmedia.com (519) 429-5205
BRAND SALES MANAGER
Pat Lorusso
plorusso@annexbusinessmedia.com (416) 518-5509
ACCOUNT CO-ORDINATOR
Debbie Smith
dsmith@annexbusinessmedia.com (416) 510-5107
MEDIA DESIGNER Graham Jeffrey
CIRCULATION
Beata Olechnowicz bolechnowicz@ annexbusinessmedia.com
GROUP PUBLISHER
Anne Beswick abeswick@annexbusinessmedia.com (416) 510-5248
PRESIDENT & CEO
Scott Jamieson sjamieson@ annexbusinessmedia.com
JP Giroux • jp.giroux@emccanada.org
VICE PRESIDENT AND GENERAL MANAGER
Amanda Doman • adoman@emccanada.org
VICE PRESIDENT, MANUFACTURING SECTOR PERFORMANCE
Scott McNeil-Smith • smcneilsmith@emccanada.org
MARKETING & COMMUNICATIONS MANAGER
Tiffany Robbins • trobbins@emccanada.org
Sherry Aziz, CFO of Amir Quality Meats.
Canadians are often described using a number of stereotypes: we love maple syrup; we say “aboot;” we’re polite to a fault; we’re hockey obsessed (OK, that one is accurate). But in the wake of recent political events, we’ve demonstrated that Canadians are also quite resilient. Over the past few months, we’ve seen plenty of economic shake-ups — most notably, the whirlwind of Trump’s on-again, off-again tariffs — that have left many industries on edge. But despite the U.S. president’s repeated threats of annexing Canada and the attack on our economy, there’s a lot to be optimistic about.
A prime example comes from the BDO Canada’s Momentum: Manufacturing and Distribution Leadership Report, which reveals that many industry leaders are embracing digital transformation and AI to bridge productivity gaps and untangle complex global supply chains. It’s a sign that even with the challenges we face, like rising costs, trade uncertainties and labour shortages, there’s still room for growth and innovation. (For more on this report, turn to page 7.)
And while the global stage has its fair share of turmoil, there’s another bright spot here at home. Canadians are uniting through grassroots initiatives like the #elbowsup movement, making it clear to our southern neighbours that “Canada is not for sale.” And in a show of solidarity, consumers are championing Canadian-made products, particularly in the aisle of grocery stores
(shoutout to Chapman’s, Kraft Heinz, Dr. Oetker and Maple Leaf, just to name a few).
Meanwhile, the government is turning necessity into opportunity. As I write this, Ontario has just announced a new legislation aimed at removing interprovincial trade barriers, which, if passed, will make it easier for Canadian workers to move freely between provinces, boost cross-country trade and help local businesses reach new markets. Ontario is signing MOUs with Nova Scotia and New Brunswick to help remove trade barriers by ensuring mutual recognition of goods, services and registered workers between the provinces, a precedent that will hopefully inspire other provinces to follow suit.
I’m not trying to sugarcoat a sour situation. It’s clear that the industry, like many others, will continue to face economic challenges as long as the trade war wages on. But amid the tariffs and turmoil, there’s also optimism and opportunity. And that’s something to be hopeful aboot.
Kirstyn Brown kbrown@annexbusinessmedia.com
Food Processing Skills Canada (FPSC) announced three new programs in support of Canadian food and beverage businesses and their employees. These programs aim to make it easier for businesses to recruit, train and retain people to ensure that the Canadian production of food and beverage remains resilient and competitive.
In support of the highest food safety standards in Canada’s food and beverage industry, FPSC has developed a new initiative, Investing in Food Safety, offering up to 70 per cent reim-
bursement for employee training costs.
The new training bundles provide an opportunity for businesses to elevate food safety and quality assurance skills for frontline workers and supervisors. Dedicated e-learning curricula for food safety basics and quality assurance principles and Chromebooks for access to the training materials will aim to make learning accessible.
To facilitate connections between post-secondary students and Canadian employers, FPSC has secured renewed funding for the Student Work Placement Program. Food and beverage businesses can access up to $7,000 per student, per term for a co-op placement this summer, fall and winter.
To build on the pilot of Refine Yourself—Leading with Emotional Intelligence, FPSC is launching a new cohort for 50 manager-level individuals at no cost for participation. This four-month program is designed to build leadership skills and support professional
development for managers through a practical approach to developing emotional intelligence skills. The program utilizes a blended learning approach with the Acahkos Plus Challenge, live webinars, and e-learning modules on self-leadership, team management, and organizational impact.
An Ontario court has approved the sale of two facilities owned by the Canadian company that processed plant-based milk linked to a deadly listeria outbreak.
Court documents show Joriki is selling its Delta, B.C., plant to Happy Planet Foods and its Toronto plant to Top Shelf Food and Beverage Corp.
Joriki is also in the process of liquidating the Pickering, Ont., plant where the outbreak occurred.
The company was granted court protection from its creditors after fi-
nancial challenges stemming in part from the recalls of several plant-based milks under the Silk and Great Value brands it manufactured.
The Canadian Food Inspection Agency said the Pickering plant was the source of a listeria outbreak that infected at least 20 people and led to three deaths between August 2023 and July 2024.
After that announcement, some Joriki customers suspended production at the Pickering facility and it was idled, while the facility’s two largest customers pulled out of the plant, said chief financial officer Michael Devon in an affidavit as part of the company’s application for CCAA protection.
Some customers paused production at the Delta location while the largest customer at the Toronto facility decided to terminate its contract, he said.
Joriki ceased business operations
and laid off almost all of its approximately 565 full-time and temporary employees at the end of 2024. About 337 of those were employed by Joriki Canada.
Joriki was founded in 1991 and expanded into B.C. in 2010, Devon said in the affidavit. In 2022, the company began work on its U.S. production facility in Pittston, Pa. However, it had challenges with the expansion, such as delays and cost overruns, that made it more vulnerable to the financial hit caused by the listeria outbreak.
Joriki’s U.S. subsidiary filed a petition under Chapter 7 of the United States Bankruptcy Code earlier this year.
Protein Industries Canada launched the $3-million Strengthening the Canadian Supply Chain Program to support companies in the development or reformulation of products for the domestic market.
“Now more than ever, it is vital that
we support our Canadian ingredient manufacturers and food processors. Their ability to remain viable is key to Canada’s agriculture and food sector, and Canada’s domestic supply chain,”
CEO of Protein Industries Canada
Robert Hunter said. “This program will help our manufacturers and processors create or reformulate products for the Canadian market, using Canadian ingredients.”
The Strengthening the Cana dian Supply Chain Program will reimburse up to 75 per cent of eligible costs to a maximum project cost of $200,000. To be eligible, projects must include at least one of the following:
• Reformulating products with domestically produced ingredients;
• Scale-up and commercial ization work to increase the supply of domestically produced food products to Canadian consumers; or
• Scale-up and commercializa tion of domestically pro duced ingredients to Cana
dian manufacturers.
The projects are required to use Canadian feedstocks or ingredients derived from Canadian crops such as wheat, oats, barley, peas, soy or fava beans. Other emerging crops, such as lupin or hemp, will also be considered.
In addition to launching the new program, Protein Industries Canada is also making changes to its Technology
Leadership Program to increase the rate of reimbursement on the cost of eligible commissioned capital and equipment. This change, which will be applied retroactively to all current projects and all projects currently in development, will help offset the cost of installing capital equipment in Canada, helping Canadian companies build out their processing capacity in Canada.
Resiliency and adaptability define outlook for mfg. industry amid economic uncertainties, says BDO Canada survey.
BY KIRSTYN BROWN
Amid economic and geopolitical uncertainties, Canada’s manufacturing and distribution industry is finding ways to evolve and overcome challenges. According to data from BDO Canada’s Momentum: Manufacturing and Distribution Leadership Report, industry leaders highlighted the importance of digital transformation and the adoption of AI in the face of Canada’s productivity gap and increasing global supply chain complexity.
A combination of telephone interviews and online surveys of more
than 120 C-suite executives and leaders from Canadian manufacturing, wholesale and distribution companies was conducted to gain insight into the priorities, opportunities and challenges shaping the future of the sector. Respondents represented food and beverage; metals, rubber, and
plastics; transportation and logistics; automotive; aerospace; chemical; and other significant industries from across the country.
The survey revealed that one-third of respondents are already implementing an existing digital transformation strategy and nearly two-thirds
are experiencing a positive ROI from these efforts, particularly in production and operations. From a digital priority perspective, 37 per cent of respondents identified enhancing cybersecurity measures as the top priority in their transformation journey, with digitizing supply chain opera-
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”The more a company is able to streamline its operations, the greater its potential for profitability.” - Jesus Ballesteros, BDO Canada.
tions being the next most important at 28 per cent.
While digital transformation continues to accelerate in the sector with larger organizations leading the way, there is a growing commitment to modernization and the integration of advanced digital systems and automation processes.
“Embracing digital transformation is a strategic imperative, necessary for maintaining competitiveness in a rapidly evolving landscape,” says Paul Dostaler, Partner, National Manufacturing and Distribution Industry Leader at BDO Canada. “And, in order to fuel progress and growth, the rapid evolution and positive impact of AI cannot be ignored. AI has the potential to enhance productivity and streamline regulatory processes—however, success hinges on those willing to invest wisely and seek expert guidance in navigating this transformation.”
AI’s growing influence is evident, with nearly half (48 per cent) of businesses surveyed reporting that they are using these applications.
Even before President Trump threat ened tariffs on Canadian imports, the survey found leaders were committed to streamlining operations and improving efficiencies. A significant 75 per cent of respondents acknowledge a national productivity issue, prompting them to implement steps such as engaging external consultants, investing in infrastructure, and fostering employee engagement to drive efficiency.
Government incentives are also playing a pivotal role in shaping investment decisions. Over 40 per cent of respondents indicated that recent grants for clean tech have influenced their
strategies, highlighting the importance of these incentives in supporting sustainable growth and technological advancement.
“Increasing efficiency is absolutely critical in the manufacturing and distribution industry, given the traditionally tighter margins compared to other industries,” says Jesus Ballesteros, Partner and National Manufacturing
and Distribution Advisory Leader at BDO Canada. “The more a company is able to streamline its operations, the greater its potential for profitability.”
The report emphasizes that AI’s potential aligns well with the principles of Industry 4.0 and the shift towards smart manufacturing, where interconnected systems and real-time data may drive better decisions.
Have you reassessed your workplace first aid program in the past year? If not, it may be time to make some improvements.
First aid is an essential piece of an overall workplace safety program. A robust first aid program can help mitigate and reduce incidents in multiple ways:
• Preventing minor injuries from escalating
• Making employees more aware of safety
• Improving your overall safety record
• Identifying trends before they become major issues
Keeping first aid programs up to date is critical. According to OHS Canada, “A key occupational health and safety (OHS) activity for any organization to undertake is to continually assess and improve
first aid programs… It is important to avoid a “one and done” approach and instead understand how the shifting complexities of the environment could impact first aid plans, supplies, equipment, and training needs.”
Consider these questions:
• When was your last comprehensive first aid program assessment?
• Are your first aid certifications current?
• Do your first aid protocols address all current workplace hazards?
• When did you last conduct a first aid emergency drill?
• Does your first aid program meet the latest regulatory requirements?
If you’re unsure of the answers, it’s time to take action. A proactive approach to first aid preparedness isn’t just about compliance; it’s about protecting your workforce and maintaining operational excellence. Manufacturing environments have unique hazards that necessitate custom approaches to first aid. In this article we’ll look at several ways to
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“A proactive approach to first aid preparedness isn’t just about compliance; it’s about protecting your workforce and maintaining operational excellence.
keep first aid response programs ready for current conditions, including re-assessment, retraining, and conducting drills.
First aid preparedness is environment-specific and will vary in each manufacturing workplace. Some potential hazards to look at include:
• Cuts, crushing, or other machineryrelated trauma
• Chemical exposure
• Heat stress or repetitive strain
• Electrical incidents
According to CCOHS, all Canadian jurisdictions have a requirement for the workplace to provide at least some level of first aid. The type of first aid equipment and training generally required depends on:
• number of workers
• types of hazards present in the workplace
• travel distance to a hospital/availability of professional medical assistance
When regulations change, first aid programs need to be updated. For example, new first aid standards took effect in November 2024 in British Columbia.
Regular first aid training reinforces the importance of safety in your workplace culture. First aid confidence and readiness rely on refresher training for several reasons:
People forget their training. According to a CSA report, CPR skills retention begins to decline less than six months after initial training.
Certifications expire. Retraining en-
sures that certified first aid responders are aware of current recommendations and techniques and have the opportunity to refresh their skills.
Updates are needed to accommodate workplace changes. As part of the reassessment process, new hazards are likely to be identified, and if so, will require retraining.
Drills could be done at least once a year, or when procedures have been significantly changed.
Scenarios for the drills should be developed to assess and evaluate first aid procedures, both for workers and for trained first aid attendants. Drills provide opportunities to resolve potential issues and loss of effectiveness in first aid programs.
As with all safety programs, first aid must be continually revisited and reinforced to be effective. In emergency situations, the effectiveness of your first aid program could mean the difference between a minor incident and a major crisis.
CFO Sherry Aziz on growing Amir Quality Meats.
BY OJASVINI PARASHAR
Ontario-based Amir Quality Meats’ story is that of a family’s dedication to quality, tradition, and community. As one of Canada’s largest independent processors and distributors of Zabiha Halal meats, the company has grown from a small butcher shop to a multi-facility operation serving clients across nine provinces. It operates three facilities—a 20,000-sf processing plant in Brampton, Ont.; a 15,000-sf slaughterhouse in Arthur, Ont.; and another 45,000-sf processing plant in Brampton, which was acquired recently. This third-generation, family-run business takes pride in upholding halal
principles and ensuring every product meets Canada’s food safety and ethical standards. The company’s vertical integration—from raising animals to processing and distribution—allows them to have tight control over their products’ quality.
I spoke to Sherry Aziz, CFO of Amir Quality Meats, about the company’s evolution and the state of the halal meat industry in Canada. Aziz was 12 years old when her family immigrated to Canada from Guyana, South America. After spending 16 years in the banking sector, she took on a leadership role at Amir Quality Meats. As a female leader in the manufacturing industry, she emphasizes the importance of purpose-driven business practices
and community engagement.
Sherry Aziz: My father ran a meat distribution company. In 2006, I decided to take a break from my career and joined my father’s business. He operated a small distribution company supplying
halal meat, primarily chicken, to local butcher shops in the Greater Toronto Area (GTA). I saw an opportunity—a gap in the market for enhanced food [safety] programs [in the halal meat sector]—and decided to stay and grow the business. In 2010, I launched Amir Quality Meats to address this gap, focusing on added-value products and
strong food safety programs.
HOW DID AMIR QUALITY MEATS TRANSITION FROM A SMALL BUTCHER SHOP TO A LARGE ENTERPRISE?
SA: Family-owned and operated, we have been in the halal meat processing and distribution business for over 30 years. Originally founded as a local halal butcher, our predecessor company provided halal meat, fish, and groceries to numerous small meat stores that serviced the GTA’s Muslim population. After 20 years of operating as a small butcher shop, we transformed our business in response to a request from a large restaurant chain. They faced [food-safety related] challenges with their current halal supplier and came to us with specific requirements. Meeting these requirements demanded significant investment and adaptation. We conducted thorough research and visited farms and abattoir facilities across Canada. After months of collaborating with a new supplier, we calibrated processes to meet stringent food safety and halal standards. This experience led to the founding of Amir Quality Meats and highlighted the ab-
sence of Muslim-owned certified halal suppliers in the foodservice industry. Over the past 30 years, we have leveraged this customer-centric approach to build a business that serves our community and aligns with our values.
SA: I felt strongly about food safety and how we presented our selves. When people walk into our company, they should not think they’re entering a typi cal meat distribution facility. Cleanliness and adherence to halal principles were extreme ly important to me. My vision was to create a workplace and product that employees and customers could take pride in.
SA: We started with a 3,000-sf facility in Mississauga, Ont., and, over time, expanded to 6,000-sf. Today, we operate a federally regulated processing plant of 20,000-sf in Brampton.
In 2022, we acquired a slaughterhouse in Arthur, allowing us to become a vertically integrated [company] and better control our supply chain.
SA: My banking career instilled discipline and a focus on processes, which
became invaluable when building Amir Quality Meats. However, the entrepreneurial spirit runs in my family—my father always ran his businesses, and that ambition inspired me.
WHAT ADVANTAGES DOES VERTICAL INTEGRATION BRING TO AMIR QUALITY MEATS?
SA: Vertical integration allows us to
control our supply chain, ensuring consistency and quality. While our Arthur facility is currently provincially regulated, we aim to achieve federal status by 2026, making us fully integrated.
SA: We are the first federally licensed, vertically integrated halal meat company in Canada with a Class A primary processing facility. Additionally, as a female-led, Muslim-owned company, we bring a unique perspective and commitment to excellence.
SA: Food safety is central to our identity. We exceed industry standards through rigorous internal audits, certifications like SQF, and unannounced inspections. Our head of food safety ensures we remain ahead of client expectations.
DOES AMIR QUALITY MEATS USE ROBOTICS OR AUTOMATION IN ITS PRODUCTION?
Amir Quality Meats employs John Bean Technologies’ (JBT’s) DSI Waterjet Portioning System to slice meat.
SA: Yes, we employ technologies like water jet machines and automated deboning lines to improve efficiency. Continuous improvement is a core part of our philosophy.
SA: Labour shortages remain a significant challenge, as manufacturing isn’t seen as glamorous work. We’re advocating for policy changes to support the industry and investing in employee retention through benefits, events, and recognition programs.
WHAT STRATEGIES DO YOU USE TO RETAIN EMPLOYEES?
SA: We offer competitive benefits and vacation packages and organize events like barbecues, luncheons, and year-end galas to foster a supportive work culture.
WHAT ARE AMIR QUALITY MEATS’ CSR INITIATIVES?
SA: We actively support food banks and organizations like Second Harvest to address food insecurity. Sustainability and giving back are integral to our mission.
WHAT UNIQUE CHALLENGES HAVE YOU FACED AS A FEMALE LEADER IN MANUFACTURING?
SA: Work-life balance is a significant challenge. Lack of mentorship and the burden of proving oneself are additional hurdles. Unlike men, women often face skepticism in leadership roles.
HOW CAN WE INCREASE THE RATIO OF WOMEN IN MANUFACTURING?
SA: We need to measure and track progress to ensure fair practices. Representation can only improve if we set
measurable goals and work towards them.
SA: Believe in yourself and your passion. Don’t give up, even when things get tough. Learn from your mistakes and use them to grow.
Give yourself a break during tough times. Always believe in yourself and stay focused on your dream, even if it gets hard. Don’t be afraid to fail. My greatest lessons came from when I made the biggest mistakes. I learned from them, and I made my business stronger. So, don’t be afraid to fail.
Amir Quality Meats exemplifies how a family-owned business can combine tradition, innovation, and ethical practices to achieve success. From its humble beginnings as a local butcher shop to becoming one of the leaders in Canada’s halal meat industry, the company remains dedicated to halal principles, food safety, and community engagement. The story of Amir Quality Meats is not just about business growth, but also about the power of values, vision, and resilience.
A critical tool for preventing recurring issues and reducing downtime in food production.
BY KIM WOLF
When it comes to the competitive food production industry, operational efficiency, product quality, safety and productivity are non-negotiable factors for success. The ability to identify and address underlying causes of failures in production processes is crucial to maintaining smooth operations. One of the most powerful tools in achieving this is Root Cause Failure Analysis (RCFA).
RCFA is a systematic approach to identifying the fundamental causes of problems that lead to production disruptions, quality defects, safety hazards and inefficiencies. By focusing on the root cause rather than just addressing symptoms, RCFA enables organizations to prevent recurring
issues. This method allows teams to get to the true root cause of the issue, then puts permanent corrective actions in place.
Our days are often filled with challenges, making it hard to introduce RCFA due to time constraints. Initially, firefighting will continue alongside RCFA, but soon recurring issues will decrease, allowing more time for strategic initiatives and decision-making that advance the business.
Food production operates within a highly regulated environment with stringent standards to ensure safety, quality and traceability. Any failure in the process can have severe consequences, including safety risks, reg-
ulatory violations, production delays or reputational damage. RCFA can be particularly impactful in food manufacturing by reducing downtime, improving consistent quality of the product, meeting regulations, improving safety results and reducing costs.
1. Productivity and efficiency: By using RCFA, manufacturers can pinpoint the exact cause of issues like machine breakdowns, delays in supply chain delivery, or underperformaning employees. Whether the
failure is related to equipment, maintenance schedules, or employee training, RCFA ensures that root causes are addressed, leading to more efficient operations. OEE and efficiency gains will always be positively impacted by using RCFA efforts.
2. Safety: Accidents or unsafe practices not only put employees at risk but can also result in costly product recalls and loss of customer trust. RCFA identifies the true cause of safety incidents, whether it’s equipment malfunction, unsafe work practices or lack of proper training. By preventing future failures, RCFA
helps create a safer work environment for employees and a more reliable food product for consumers. It is common to see companies post their safety records but rarely do you find Joint Health and Safety Committees who use RCFA as a part of accident investigation. Yet it is, by far, the most impactful tool to reduce, and ultimately eliminate, accidents in the workplace.
3. Employee engagement: Employees are key stakeholders in food production operations. RCFA engages employees in problem-solving by encouraging them to contribute to the analysis of failures. This inclusivity helps foster a culture of continuous improvement, boosting employee morale and engagement. Furthermore, when employees see that their concerns are addressed through corrective actions, it strengthens their commitment to maintaining high standards. For this key component of RCFA, it’s advisable to avoid complicated, multi-paged forms. Instead, de-
velop something simple that can be easily used on the production floor.
4. Logistics and supply chain: Whether it’s a delay in raw material delivery, equipment malfunction or packaging defects, RCFA helps track down the causes and ensures the smooth flow of materials and goods. By identifying and solving these underlying issues, companies can optimize their logistics and supply chain systems, avoiding costly disruptions and improving lead times. RCFA activities should include the logistics providers, as well as other suppliers.
5. Regulatory compliance and quality control: Food production is subject to strict regulatory requirements, ranging from food safety standards to labeling accuracy. Noncompliance can lead to fines, recalls, or even shutdowns. RCFA is essential in ensuring adherence to regulations by
helping organizations detect problems early in the production cycle and correct them before they escalate. It also improves overall quality control, which is vital in maintaining product consistency and meeting consumer expectations.
One of the simplest yet most effective methods used within RCFA is the 5 Whys technique. The 5 Whys involves asking “why” repeatedly (typically five times) until the root cause of an issue is uncovered. This iterative process helps peel back layers of symptoms, allowing teams to focus on the underlying cause rather than just surface-level fixes. It is human nature
to jump to conclusions regarding the cause of an issue, especially when experience may point us in a specific direction. However, when a team relies solely on experience or opinion, we often wind up working on the wrong things. Then we are disappointed when the issue continues to occur.
A common mistake is that someone performing the analysis will provide five different reasons why a problem occurred. That is not using the 5 Why process correctly – rather each of the “Whys” builds on the answer to the previous question.
For example, let’s consider a food production scenario where a batch of food products fails quality control:
1. Why did the batch fail quality control?
Because the temperature exceeded the acceptable range during processing.
2. Why did the temperature exceed the acceptable range?
The heating system malfunctioned.
3. Why did the heating system malfunction?
A faulty sensor caused the system
to misread the temperature.
4. Why did the sensor fail?
The sensor had not been properly maintained and cleaned.
5. Why was the sensor not maintained?
The scheduled maintenance was missed due to a lack of proper maintenance tracking.
By following this approach, the organization realizes that the root cause was not the sensor itself, but rather an ineffective maintenance scheduling system (CMMS). Armed with
this insight, they can implement preventive measures such as improving maintenance tracking and ensuring that the system is regularly cleaned, which will prevent similar failures in the future.
In the food production industry, even the smallest failure can have farreaching consequences. Food safety is a public health concern, and any contamination or product defect can lead to recalls, health risks and a damaged reputation. RCFA is especially impor-
tant in food production because it allows companies to dig deeper into incidents and uncover causes that may not be immediately obvious. Whether it’s contamination due to improper handling, equipment failure or inadequate staff training, RCFA provides a framework for thoroughly investigating issues.
Moreover, food production processes are often complex, with numerous touchpoints where failure can occur. RCFA ensures that no stone is left unturned, helping to streamline processes, reduce waste and maintain compliance with stringent regulatory requirements.
RCFA is more than just a problemsolving tool; it is an essential practice for sustaining long-term success in food production.
Kim Wolf has her own Leadership Coaching and Manufacturing Consulting where she is able to work with manufacturers across Canada and the US, leveraging her vast experience in six-sigma, lean manufacturing, team development, document and visual management and other continuous improvement tools.
How food and beverage manufacturing companies can tackle the top three digital transformation challenges— cybersecurity threats, supply chain disruptions and climate change—and clear the way to reap the benefits of digital change.
BY MAGGIE SLOWIK
The food and beverage industry stands at a critical crossroads. While companies recognize that digital transformation is no longer optional, they’re overwhelmed by the sheer number of available solutions. With every option appearing viable, the fear of making the wrong choice and disrupting established systems leads to decision paralysis. As a result, many are falling behind.
A recent IFS report, Manufacturing Today: Navigating challenges, setting priorities and investing in technology, which surveyed global manufacturing leaders including those in food and beverage, found that while nearly all acknowledged that their businesses can’t survive without the right technology, fewer than 10 per cent identified as digital leaders. In contrast, a surprising 65 per cent described themselves as “laggards,” stuck in the early stages of digital transformation with no clear roadmap forward.
According to the report, digital leaders invest 45 per cent of their budget on digital transformation, driven by clear strategies and ROI-focused investments. Meanwhile, laggards continue to fall further behind paralyzed by too many choices leading to the inability to evaluate new technologies. Technology has the potential to improve production optimization, energy
management and waste management and design and development, but only if companies are able to successfully integrate technologies into their existing ecosystem.
According to the IFS report, cybersecurity is the top business challenge for 36.5 per cent of food and beverage respondents — and it’s easy to see why. Cyberattacks targeting manufacturers’ systems, equipment and technology are on the rise, posing risks to businesses of every size. In 2023 alone, major players like Dole, Sysco and Mondelez were among those hit by cyber incidents.
Any downtime on production lines by cyberattacks can lead to a chain reaction of delays, which puts strain on organizations, costing them already limited time and resources. The ransomware attack on Dole in February 2023 for example, impacted shipments to grocery stores and had costly repercussions.
However, the report found that only 20.6 per cent of food and beverage
companies plan to prioritize improving cybersecurity in the next two to three years. Interconnected systems and reliance on digital tools increase vulnerability to attacks, making it crucial for companies to invest in secure technologies such as cloud computing, which most manufacturing executives are prioritizing as the cornerstone of their digital transformation efforts. Yet it’s equally important to have security measures built into supporting software architecture to increase success in the new cyber arms race and ensure business operations can continue in a safe manner. A
single-tenant cloud architecture for example, ensures companies can benefit from greater management control and higher levels of isolation —perks they would not be able to receive from a multi-tenant hosting architecture. This removal of access points allows companies to dramatically reduce the risk of data inadvertently falling into unauthorized hands. In the event of a cloud neighbor
becoming compromised by a cyberattack, a single-tenant architecture can ensure that the customer remains isolated from the threat and their data is left intact.
Meeting Environmental, Social and Governance (ESG) and sustainability
demands was the second most pressing business challenge for 34.9 per cent of food and beverage respondents. While it found many manufacturers are actively developing ESG initiatives, most lack a credible ESG strategy despite identifying climate change as a top concern.
Data collection and management remains the number one ESG reporting
challenge for manufacturers but the introduction of new regulations such as the SEC disclosure requirement is creating a new level of regulatory uncertainty that is holding up production and delivery within the food and beverage industry.
Encouragingly, the IFS research uncovered how manufacturers are particularly hopeful about the impact of ESG on their businesses. The sentiment is now shifting from ESG being just a compliance-driven activity to one that can drive significant positive changes in lead time and quality, while enabling new business models such as circularity.
In fact, the research found 27 per cent of food and beverage companies plan to prioritize developing a sustainability strategy and team in the next two to three years, with a further 20.6 per cent planning to embed sustainability goals in operations.
Executed correctly, sustainability measures can bring new value to the food and beverage ecosystem. Take Digital Product Passports (DPPs) as a case in point. DPPs will play a pivotal role in advancing circularity
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“Future growth hinges on operational excellence, process innovation, sustainability integration and strong leadership to overcome digital inertia.”
by providing detailed, blockchainsecured information about the environmental impact of products, their composition, their production, and history. DPPs will enhance transparency, streamline recycling processes, and align with consumer demands for sustainable goods.
Food and beverage manufacturers are increasingly focused on improving the resilience of their operations, driven by pressure to deliver more with fewer resources. But the clock is ticking on resilience. According to the IFS report, over a quarter of food and beverage manufacturers still identify supply chain disruptions as an ongoing business challenge.
Drilling down further, the research found that 82 per cent of manufacturers believe their business won’t survive more than one to three years
without a stronger commitment to technology.
Cost is no longer the prime driver for supply chain decisions, instead it’s a balancing act between factors such as product lead time, quality, and reduced carbon footprints. Manufacturers are now considering geographic strategies to optimize supply chain resilience, opting for closer or politically stable sourcing destinations.
The offshoring trend is coming to an end as manufacturers realize that localization strategies such as friendshoring and reshoring can provide greater quality control, reduce environmental impacts, improve speed to market and offer better IP protection.
The IFS research found that improving agility and flexibility of operations is now a top priority for 23.8 per cent of food and beverage companies in the next few years — and technology can make this a reality. Digital
tools such as AI-driven data pattern recognition allow food and beverage manufacturers greater opportunities to redesign the supply chain network, implement more rigorous risk assessment tools such as what-if planning scenarios for material and operational resources, and drive better supplier relationships and collaboration.
Manufacturers need to take decisive action now or risk being left behind in a rapidly evolving market. Those that lead in digital transformation will emerge stronger, more agile and better equipped to navigate future disruptions.
Future growth hinges on operational excellence, process innovation, sustainability integration and strong leadership to overcome digital inertia. By redefining value through digital and sustainable practices, manufacturers can turn these challenges into opportunities, positioning themselves to lead in a dynamic, competitive landscape. Maggie Slowik is the Global Industry Director for Manufacturing at IFS.