Biggest Challenges in 2023: 19 Food Industry experts spell out their opinion

The food industry always comes with new challenges. Every year, food businesses and food-related organizations outline pressing challenges that may significantly affect the year ahead.

Addressing challenges is not only essential to keep a business afloat. It is also vital to sustain food security and protect the environment.

What's the biggest challenge facing the food industry in 2023, and what solution do they suggest?

We asked this question to 18 food industry experts. 

Let's explore the challenges and solutions one by one.

1. Inflation, labor shortage, and productivity (examples on food services)

Optimizing technology may just be the answer to inflation

The restaurant industry is facing dozens of headwinds going into 2023, but the top of mind for restauranteurs are labor concerns and food costs/combatting inflation.

Restaurants are struggling to hire and retain reliable, competent workers, and workers are looking for stability, good food quality of life, and fair hours/wages.

While there's no simple answer as to how to solve this question, many restaurants are not optimizing technology as well as they could be.

Amy Lecza, Director of Content Marketing & SEO, Toast

Streamlining with technology-based solutions; quick and effitient

One of the biggest challenges facing the restaurant industry in 2023 is the ongoing labor shortage. 

To address this issue, I suggest that businesses pivot their structure and adopt technology-based solutions for both in-person and online operations. 

These solutions can include self-service techs such as kiosks or QR codes for online ordering and payment systems to streamline transactions, take the place of labor, and improve customer experience. 

Prioritizing the use of technology can also help take care of the team and improve business growth, ensuring that there will be a team to take care of customers in the future.

Vanessa Lopez, Content and Social Media Marketing Manager, Mad Mobile

Find the balance between inflation and the customer's budget

The biggest challenge facing the industry right is how to manage the rising cost of food.

According to TouchBistro’s 2023 State of Restaurants Report, 53% of restaurateurs reported raising menu prices to offset the rising cost of food in just the past six months.

Overall, most operators reported raising their prices by 15% on average, which appears to be the maximum increase consumers are willing to absorb.

Food suppliers also face a similar challenge in that they need to find a way to cover their rising costs without increasing their prices to a point where customers will seek alternatives.

Katherine Pendrill, Content Marketing Manager, TouchBistro

Zero-cost platforms vs. inflation

In 2023, restaurants are facing numerous challenges due to the aftermath of the COVID-19 pandemic and geopolitical events.

These events caused inflation, leading to increased food and energy costs and higher operational expenses, which resulted in rising costs for dining out and decreased demand.

By adopting online food delivery, restaurants can reduce their overhead costs, such as rent and energy bills. These savings can then be reinvested in hiring and retaining top-performing staff, enhancing the overall dining experience for customers.

Sam Adepoyigi, Founder of Tastylgniter

Make the food industry more attractive and sustainable for employees

Running a restaurant in today's economy is becoming increasingly challenging. Rising rent, labor shortages, and increased food costs make it difficult for restaurants to remain profitable.

The key to success is to be strategic in navigating these economic hardships. To stay competitive, restaurants must invest in quality products to provide delicious meals while keeping menu prices reasonable.

Another major challenge is staffing issues. With increasing competition and high staff turnover rates, it's difficult and costly to find and retain quality employees.

The solution to these challenges is technology. By leveraging technology and traditional best practices like menu pricing strategies and cost-cutting measures, restaurants can still succeed despite the rising costs of doing business. 

Carl Jacobs, Co-founder & CEO, Apicbase

Understaffing will stay in 2023

"Now Hiring" signs in windows across the US have been prevalent over the past few years, and the hospitality industry is still facing an unprecedented labor shortage, with nearly 2 million jobs that remain unfilled.

Restaurants, bars, caterers, and food service businesses are among those still feeling the staggering effects of the ongoing pandemic on the workforce, with the painful impact of workers outright not returning to jobs in the industry.

We know understaffing is a perennial issue for food and beverage businesses, and Qwick sees this persisting throughout 2023.

Leah Tsonis, Senior Manager of Content Marketing, Qwick

Your deskless workforce needs attention

In 2023, companies in the food industry will see substantial labor issues, especially regarding their deskless workforce.

While companies have introduced many improvements in working conditions for desktop workers in recent years (HR tools, project management software, employee benefits, etc.), the deskless workforce has fallen entirely by the wayside.

The most crucial point is technological advancements. The food industry must keep pace with technological advances for their deskless workforce, especially in workflow automation, and make general productivity improvements to remain competitive and meet consumer demands.

Lukas Blasberg, CEO, Lumiform

To take the merging challenge together, it is suitable to end with a short but accurate opinion from the FOHBOH CEO. 

The problem is in plain sight.

"Labor shortages and manager productivity."

Michael Atkinson, CEO, FOHBOH

2. Becoming too reliant on food aggregators

A direct connection with consumers is critical

Listing yourself on food aggregators is a great choice for a restaurant just starting out and looking to put its name out there and generate a trial. Although, it is not a sustainable option.

There are two reasons:

1. Food aggregators charge exorbitantly high commissions (30-40% per order).
2. Food aggregators do not provide access to customer data.

The solution is to decrease dependency on food aggregators by opening a Direct-To-Consumer online channel, a land of little to no commissions and access to all of your customers' data. This solution can help you make informed decisions to grow your business.

Many SaaS companies, like Blink, Chatfood, and Gloriafood, to name a few, provide restaurants with online ordering websites and apps that can help the brand go live in as little as two days.

Nayha Arif, Marketing Manager,  Blink Co. Technologies

3. Promoting transparency while securing customer privacy

Nondisclosure is as dangerous as a food hazard

Unfortunately, current US labeling regulations are not up to the task.

Manufacturers must declare whenever any of the FDA-designated “Top 9” allergens are an ingredient of a product. Despite this, no regulations require manufacturers to notify consumers when these allergens are processed in the same line or facility.

This oversight may lead to inadvertent cross-contact. Precautionary allergen warnings like “May contain…” and “Made in a facility that also processes…” are entirely voluntary.

Some manufacturers include them, whereas many don’t. Other businesses warn of only one allergen and leave the rest unnamed.

Dave Bloom, CEO, SnackSafely

4. Sustainability, environmental impacts, and health

There is a need to reconnect to agriculture

The biggest challenge will be dialing back large-scale agriculture from the industrial pork farms in China to the massive mono-culture farms in America. 

Karin A Kloosterman, Editor, Green Prophet

How to make nutritious and affordable food more sustainable?

The food industry faces a multitude of challenges in 2023, but perhaps the most pressing is the need to provide sustainable, nutritious, and affordable food to a growing global population while also reducing its environmental impact.

One solution to address these challenges is to shift towards more sustainable and regenerative agricultural practices. This could include techniques such as agroforestry, crop rotation, and intercropping, which promote soil health, biodiversity, and carbon reduction. 

Additionally, precision agriculture, which uses data and technology to optimize farming practices, could help reduce waste and improve efficiency.

Another solution is to invest in alternative sources of protein, such as plant-based and cell-based meats, which require fewer resources to produce and have a lower environmental impact. 

Miles Anthony Smith, Content Manager, Alsco

Repurposing food waste could be a key to the energy crisis

One of the biggest challenges facing the food industry in 2023 is likely to be the ongoing issue of food waste.

One solution to this problem could be implementing more efficient supply chain management systems that use data and technology. Food businesses can use it to track operations better and predict food demand, allowing for more accurate production and distribution.

Another solution is to recover food waste by using it as a source of energy. In this way, food waste can be used to generate electricity and heat through anaerobic digestion.

Also, providing education and awareness about food waste and how to reduce it is crucial.

Andre Oentoro, Founder and CEO, Breadnbeyond

Less meat, more greens

I think the biggest challenge the food industry faces in 2023 is the growing demand for meat production.

The main environmental impact of meat is the high energy demand and greenhouse gas (GHG) emissions released during production. 

Reducing meat consumption within the population requires a behavioral and cultural shift. It also demands meat substitutes.

As a result, the meat substitute market is rising. In 2021, this market was valued at $9.9 billion. It is expected to expand at a compound annual growth rate (CGR) of 42.1% from 2022-2030.

This data shows attitudes are changing in the market, yet this shift from meat consumption must continue alongside a reduced demand for meat.

Jane Courtnell, Marketing Director, Green Business Bureau,

In times of trouble, foods become subjected to theft

According to a recent global report on supply chain risks, food and beverage items were the most stolen type of goods in 2022 and up by 2.8% compared to the previous year.

The higher rates of theft of consumable goods result from opportunistic crimes committed due to supply chain volatility. The pandemic, soaring inflation, and the war in Ukraine have left the food and beverage industry more vulnerable to theft.

According to a report by the British Standards Institution (BSI), theft from food processing facilities was the most common form of cargo crime in 2022.

For many organizations, investing in new technologies and security solutions will be imperative, especially as risks heighten during the supply chain digitization process.

The convergence of physical and cybersecurity is the way forward to optimize security strategies.

James Segil, VP of Marketing & Inside Sales for Video Security & Access, Motorola Solutions

What is the main issue? Sustainability

As specialists in the food business, we consider sustainability to be the main issue the sector will face in 2023. 

Customers are seeking more sustainable products as they become more conscious of how their dietary choices affect the environment. 

Making sustainable sourcing and manufacturing processes a top priority for businesses is one way to overcome this problem. 

This entails using sustainable production techniques, eliminating packaging waste, and obtaining raw materials from nearby organic farms. 

Businesses might, for instance, lessen their carbon footprint by utilizing renewable energy sources instead of fossil fuels to power their operations.

Meeting sustainability concerns may benefit greatly from innovation and technological advancements. 

The environmental effect of conventional meat production can be lessened by creating plant-based modified meat and engineered meat replacements. Moreover, it is possible to maximize yields and cut back on water use by using data analytics and precision agriculture.

Timothy Woods, Co-founder & CEO, Carnivore Style 

Sustainability must come with quality – that is the demand

Consumers are increasingly becoming aware of the significant proportion of plastic pollution caused by the food industry.

The companies most responsible for environmental waste come from the food sector.

Although more consumers are taking responsibility for reducing the use of single-use plastics, they are less inclined to pay a premium for sustainable alternatives if the product's inherent quality is also there.

Primarily, the food industry areas most affected by the plastic waste dilemma are the areas of processing, distribution, and retail.

Reducing plastic use in these sectors is particularly challenging for many brands due to the cost, food safety, and convenience implications of avoiding plastics.

The pandemic and cost-of-living crises that followed only caused consumers to double down on their willingness to pay a premium for sustainable food packaging in the retail sector.

Lindsay McLain, VP Marketing, JUST Water

Make food healthy while staying indulgent

Since the pandemic, concerns surrounding health have risen, and people are increasingly adopting a far more conscious way of eating.

According to a recent survey by Deloitte, 93% of consumers are reportedly committed to healthier eating, at least some of the time.

Additionally, the demand for plant-based foods, particularly alternative proteins, has been skyrocketing.

The demand for plant-based alternatives is growing due to this general shift in consumer preferences. In addition, the vegan market is also reported to be on a 9% annual rise.

Furthermore, recent data estimates that up to 10.8% of the global population suffers from a food allergy, and the incidence of food allergies appears to be on the rise.

Jess Grelle, SVP of Innovation, Safe + Fair

The big three problems: inflation, health, and sustainability

In 2023, the food industry is expected to face several challenges, including rising energy costs, inflation, the cost of living, and increased concerns about health and sustainability.

To overcome these challenges, restaurants can adopt a few strategies.

Firstly, implementing sustainable practices such as reducing food waste and using locally sourced ingredients can appeal to environmentally conscious consumers.

Additionally, offering plant-based and alternative protein options can cater to the needs of customers who have adopted vegetarian or vegan lifestyles.

Restaurants can also focus on health and wellness by providing nutritious menu items, low-calorie meals, gluten-free options, and meals that cater to specific dietary needs.

Lastly, increasing transparency about food ingredients, sourcing, and production processes can build customer trust and appeal to their growing interest in eco-friendly practices.

Dominik Bartoszek, Content Manager, UpMenu

Conclusion

The year 2023 is set to become a year of further globalization, innovation, and technological advances. To conclude, the challenges threatening the food industry mentioned by the experts include the following: 

• Transparency. In recent times, food consumers have become more and more concerned with how the foods that they buy are sourced and produced. 
• Inflation of prices. Prices are consistently rising due to disruptions in the supply chain, which ultimately affects the cost of ingredients.
• Sustainability and environmental concerns. With the increasing concerns over the effects of climate change, consumers are demanding more environmentally-friendly solutions to the food manufacturing process. Research shows that despite industry efforts, plastic consumption has quadrupled over 30 years.
• Labor shortage. Food producers are struggling to provide competitive wages and benefits to the workforce, significantly affecting the appeal of jobs in the food industry.
• Consumer preferences. The challenge for businesses is switching from traditional ingredients and operations to healthier alternative ingredients.
• Food safety. Because of globalization, more types of hazards have entered the food industry. Food businesses may have a hard time keeping up with the new food regulations on top of improving other aspects of their business.

At FoodDocs, we take food industry challenges into account every day by developing the smartest digital solutions for food safety to save our clients time. As we make compliance accessible to all food businesses, we strive to improve our digital Food Safety Management System to help ensure the safety of food products in the market.

Every year, new challenges arise as the food industry continues to grow. Properly identifying these challenges can help food businesses address or prepare for them.

Learning the challenges faced by food industry players gives you a more focused idea of what you might be facing on-site.