How Supply Chain Finance Helps the Food and Beverage Industry

There is a lot of talk around disruption within the food and beverage industry over the past decade. Changing consumer behavior, explosive competition, and new technologies have certainly shaken things up for industry players and have changed the landscape quite drastically. Consumer preferences have changed and pivoted to a more health-conscious palette. As a result, widely known brands selling mainstream products are now threatened by the introduction of niche organic products that are rising in consumer favor. New market entrants such as AmazonFresh and other online grocery e-commerce platforms are expanding their market shares and doubling down on the food and beverage industry. The pandemic certainly accelerated this trend as consumers began shopping online solely and demand for online grocery shopping skyrocketed. An abundance of industry competition plus rising costs around production and raw materials have decreased profit margins significantly within the food and beverage industry. Costs are determined by a number of factors like product demand, taxes, regulations, farming and labor, etc. The Food Marketing Institute reports that profit margin in the food and beverage retail space, such as grocery stores, has rarely risen above 1 percent. Supply chain executives are tasked with managing and adapting to the shifting landscape while keeping their supply chains resilient and cash flow positive. Cash flow must be improved in order to compete and stay relevant in the highly competitive industry. Many companies has turned to supply chain finance to help remedy the impact of disruption and keep operations agile and fruitful. Some of the largest players in the food and beverage industry have been using SCF for years now. It has helped them to keep pace and navigate industry change while unlocking working capital stuck in the supply chain to keep operations flexible. Supply chain finance functions to improve the financial health of both Buyers and Sellers. Both Buyers and Sellers benefit. Sellers receive accelerated, early payment and Buyers receive extended payment terms. At TradeRiver, we bridge the cash flow gap with a revolving trade credit facility to keep the supply chain moving and business growing. To learn more about we have helped food and beverage companies, check out our Highlights page to see our wide variety of clients and how we have helped ease cash flow pressures. To learn more about TradeRiver's end-to-end supply chain finance solutions, please contact info@traderiverfinance.com.