From problems to possibilities: Navigating F&B industry challenges with data

The global food and beverage (F&B) industry is booming, fueled by decades of innovation and expansion into new markets. Yet, this growth comes hand-in-hand with unprecedented complexity. In fact, even as the sector achieved “tremendous growth” in recent years, this growth, however, has not been without roadblocks. Navigating F&B industry challenges has become the new normal amid global instability, conflicts, climate change, and a persistent cost-of-living crisis​.

In this blog, we highlight four of the biggest challenges shaping the F&B landscape today,  and explore how data analytics, AI, and competitive intelligence are helping companies turn these challenges into opportunities. 

Challenge 1: Regional demand variations and market entry risks

Amongst the top F&B industry challenges is navigating a new market. Expanding into new regions can be a double-edged sword. Consumer tastes, cultural diets, and purchasing power vary widely across the globe, so a product that’s a hit in one market may fail to deliver in another. Entering a new region without a nuanced understanding of local demand can be risky and costly. 

From differences in flavor profiles (consider how a spice level loved in Asia might overwhelm North American palates) to local dietary habits (for example, a vegan snack might find a niche in California but face indifference in regions where meat is central), regional demand variations are very real.

North America itself is not a monolith – the U.S. and Canada comprise a mosaic of cultures and ethnic cuisines, meaning a one-size-fits-all approach rarely works even within the region. Successful F&B brands have learned to “glocalize”: adapting their offerings to local tastes and customs while maintaining core brand identity. The flip side of this adaptability is market entry risk – every new geography introduces uncertainties around consumer acceptance, regulatory environment, and supply chain setup. 

The solution: 

To mitigate these risks, companies are investing in data-driven market research and competitive intelligence before they launch in a new region. By analyzing local consumer trends, social media chatter, and competitor offerings, businesses can tailor their products and marketing strategies to fit regional needs. Advanced analytics and AI play a key role here – for example, predictive models can sift through historical sales data and social trends to identify which product attributes will likely be best-sellers in a given market, helping teams tweak formulas or menus before launch​.

Competitive intelligence platforms also track local players’ moves (pricing, promotions, product features), so an entering company isn’t caught off guard by an incumbent’s stronghold. In short, a combination of cultural insight and hard data is the key to mitigating risks in market entry.

For instance, brands like McDonald’s localize their offerings—think McAloo Tikki in India or the Teriyaki Burger in Japan—based on market intelligence and consumer insights. With the right data strategy, you can do the same: anticipate needs, adapt fast, and grow stronger.

If you’re looking for a cost-effective solution to ensure successful market entry— you can explore Netscribes’ tailored competitive GTM strategy solutions here. 

Challenge 2: Pricing challenges

Pricing is a perennial challenge in the F&B industry, but recent global economic swings have made it especially thorny. On one hand, producers face rising input costs – from raw ingredients and packaging to energy and transportation driven by inflation and supply volatility. On the other hand, consumers (straining under inflation themselves) are extremely price-sensitive, forcing brands to strike a delicate balance between profitability and affordability. 

Today’s tight-margin environment, driven by inflation, commodity prices, energy, and packaging costs, creates relentless pricing pressure from retailers. This makes cost management a top priority.

To effectively navigate these F&B industry challenges, benchmarking becomes critically important. F&B companies need to constantly benchmark their prices and cost structures against both competitors and regional norms. Effective pricing strategy requires answering questions like: 

1. Are our prices in line with the market average for this category? 
2. How do our ingredients and labor costs compare to industry benchmarks? 
3. What promotions or discounts are others offering, and how do we respond? 

Benchmarking provides the context to make informed pricing decisions rather than flying blind. For example, if a snack manufacturer sees that all major rivals have taken a 5% price increase on similar products this quarter, it gains confidence that a price adjustment of its own will be accepted by retailers and consumers. Conversely, if competitors are holding prices or offering coupons, a business might choose to delay increases or find other ways to add value.

The solution: 

Companies are harnessing competitive intelligence tools that monitor competitor pricing, promotions, and even consumer sentiment about price fairness. By leveraging large datasets (e.g. scanner data from retailers or online price trackers), an F&B firm can benchmark its product prices across regions and channels in real time. 

For instance, AI-powered analytics can alert a company if a key competitor suddenly discounts a product line, allowing them to respond quickly to avoid losing share. Some forward-thinking restaurants and food retailers are even experimenting with dynamic pricing models (similar to airlines and hotels), where prices adjust based on demand patterns and inventory levels – these models rely on AI to crunch historical sales and forecast demand.
>This report finds that a majority (67%) of surveyed consumers around the globe say they are likely to change or try a new brand because of lower pricing.

Read more: Dancing with the data: AI tools that empower you to make decisions with finesse

Challenge 3: Rapid shifts in consumer preferences 

Few industries are as directly influenced by consumer whims as food and beverage. Tastes are always evolving, but in recent years consumer preferences have been shifting at breakneck speed, driven by factors like health awareness, social media trends, and generational changes. What’s “hot” today – be it plant-based protein, keto-friendly snacks, or CBD-infused beverages – might be passé tomorrow. 

For companies, keeping a finger on the pulse of these fast-moving trends is one of the most difficult F&B industry challenges. In a 2024 industry risk outlook, 36% of food and beverage companies admitted they are struggling to keep pace with the rapid change in consumer tastes and preferences​. This sentiment is echoed on the ground: one year consumers are clamoring for oat milk and hard seltzer, the next year it’s all about kombucha and mushroom coffee. The pandemic period too brought abrupt shifts (e.g. a baking-at-home craze, then a later swing back to ready-to-eat convenience).

The opportunity? Innovating quickly enough to meet these evolving demands. We’ve seen legacy brands reformulate recipes to cut sugar or remove artificial additives, and upstart brands explode onto the scene by catering to a new niche (for example, high-protein low-carb breads targeting keto dieters).

Crucially, consumer trends now often germinate and spread via social media. Younger generations, especially Gen Z, are turning Instagram, TikTok, and YouTube into their personal food discovery platforms. The impact is that a single viral video – say a TikTok recipe for baked feta pasta or the craze for dalgona coffee – can lead to nationwide spikes in demand for certain ingredients or dishes virtually overnight. This “virality” factor means F&B companies must monitor not just long-term lifestyle trends but also real-time fads. 

The solution: 

Given the breakneck pace of change, manual tracking of consumer preferences is no longer sufficient. This is where AI-driven consumer sentiment analysis has become a game-changer. By using natural language processing (NLP) to analyze millions of data points – from product reviews and tweets to restaurant ratings and forum discussions – F&B brands can gauge in real time what consumers are buzzing about. For instance, sentiment analysis tools can parse social media posts to determine if a new flavor is being received positively or if there’s a budding backlash against an ingredient. These AI tools provide actionable insights into consumer behavior and sentiment, effectively serving as an early warning system for shifts in preferences​

Beyond sentiment analysis, social listening and consumer insights platforms (often powered by AI) help brands “listen” to their consumers across all channels. As one technology analyst put it, the explosion of real-time, unstructured consumer conversations online means AI-driven listening tools are now a must-have for F&B brands​. These platforms aggregate feedback from social media, discussion boards, and even call center transcripts to create a 360-degree view of consumer opinion. 

Read more: Artificial intelligence (AI) in sentiment analysis and industry use cases

Challenge 4: Sustainability pressures and regulatory compliance

In many ways, sustainability and compliance are now two sides of the same coin. What starts as consumer or social pressure often soon solidifies into formal regulations that companies must comply with. On the consumer side, the demand for sustainability is loud and clear. Surveys consistently find that shoppers say they prefer eco-friendly, ethically made products – and increasingly they back that up with their spending. F&B industry challenges include navigating these evolving regulations while meeting consumer expectations

In the United States and Canada, more recent regulations have been tightening around topics like food safety and transparency of labeling. The U.S. FDA has revised Nutrition Facts labels to highlight added sugars. It has also introduced new allergen labeling—for example, sesame was newly designated as a major allergen in 2023. Additionally, the agency is contemplating front-of-pack nutrition labeling systems.

There is also heightened enforcement of ESG (Environmental, Social, Governance) disclosures for listed companies. As a result, major F&B companies are now reporting their sustainability data in annual reports with the same seriousness as financial data.

In an era of hyper-transparency, brands that fail to live up to sustainability promises risk swift consumer backlash. This risk is even greater if a scandal emerges, such as sourcing from a polluting supplier. Consumers are increasingly focused on ESG impacts. They expect greater transparency in how products are sourced, produced, and delivered—effectively demanding that companies “walk the talk” on sustainability.

The solution

Meeting sustainability pressures and compliance mandates is no small feat – but data, AI, and competitive intelligence are proving invaluable in this arena. Firstly, data analytics helps measure and track sustainability performance. To address the F&B industry challenges that come with sustainability, many companies are deploying software to capture metrics like carbon emissions across their supply chain, water usage, energy efficiency in plants, percentage of recyclable packaging, etc. By having quantifiable data, companies can identify where they stand and what improvements yield the biggest impact.

AI and automation are aiding compliance monitoring. Consider the vast and changing array of food regulations worldwide – it’s a lot for any compliance team to manually track. AI-driven regulatory intelligence tools can scan government databases and alerts to inform a company of new or upcoming regulations relevant to them (for example, a new labeling requirement in Canada or a ban on certain preservatives in the EU). This allows F&B firms to stay ahead of compliance deadlines and adjust formulas or labels in time. Likewise, blockchain and traceability technologies are being adopted to ensure ethical sourcing compliance – by recording every step of an ingredient’s journey on a tamper-proof ledger, companies can verify claims like “fair trade” or “organic” and be audit-ready.

On the sustainability innovation front, data plays a big role too. R&D teams use consumer insights and market intelligence to guide sustainable product innovation. They analyze trends to ask: Is there a growing market for plant-based or upcycled ingredients? What sustainable packaging innovations are competitors implementing? 

Consumer sentiment data is also crucial here. Businesses are using social listening to determine what sustainability topics are most important to their consumers. Having this information assists with prioritizing efforts. If trending information reveals, for instance, a surge of concern regarding deforestation of palm oil, a snack food company may accelerate sourcing certified sustainable palm oil to address the issue and feature it in messaging.

Conclusion: 

The food and beverage industry’s landscape is characterized by dynamic consumer tastes, razor-thin margins, complex global operations, and rising expectations from society. 

Companies that leverage data, AI, and deep market intelligence are the ones turning the headwinds of F&B industry challenges into tailwinds. Whether it’s using predictive analytics to anticipate the next big flavor, harnessing competitive benchmarks to price smartly, or embracing sustainability not just to comply but to resonate with consumers – the common thread is being proactive and informed.

Netscribes, with its growth consulting, competitive intelligence, and consumer insights capabilities, positions itself at this nexus of data and strategy. By providing F&B businesses with a 360° view of their market – from granular consumer sentiment to competitor moves and regulatory shifts – we empower them to make better decisions faster. 

Are you ready to take the leap? Check out our tailored growth consulting services here.