Current Situation of Taiwan's Food Industry and Strategies for Response to the Epidemic
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Current Situation of Taiwan's Food Industry and Strategies for Response to the Epidemic

Taiwan's food industry is facing many challenges, and industry players have accelerated the establishment of online sales channels. Whether the epidemic slows down or not, it will be an industry trend for the food industry to open online and offline sales channels.
Published: Nov 08, 2022
Current Situation of Taiwan's Food Industry and Strategies for Response to the Epidemic

The Development Status of Taiwan's Food Industry:

After the outbreak of the epidemic in January 2020, all parts of the world have stopped production and restricted the movement of people and goods, affecting all walks of life. Since the diet is related to the basic needs of people's livelihood, the impact of the food industry during the epidemic is less than that of other industries. However, food manufacturers still face many challenges, including rising raw material prices, soaring transportation costs, and changing consumer behavior. In the past few decades, Taiwan has developed a sophisticated and diverse food industry with the integration of Chinese and Western cultures. From upstream raw materials, midstream processing, and manufacturing, to downstream sales services, a complete industrial chain has been established. Some of these manufacturers are developing in China and have a presence in the Chinese food and beverage market.

At present, Taiwan's food industry accounts for about 4.8% of the total manufacturing output value, making it the eighth-largest manufacturing industry in Taiwan. In 2019, before the outbreak, the output value of Taiwan's food and beverage manufacturing industry was about NT$630.3 billion, and in 2020 it increased to NT$634 billion, an increase of 0.59%. By 2021, the food industry will still be growing steadily. In the first half of the year, the output value of the food industry will increase by 8.39% year-on-year, and the beverage industry will increase by 3.15% year-on-year. At a time when the epidemic is raging around the world, the overall output value of Taiwan's food industry can still maintain growth. First, because the epidemic situation in Taiwan has eased relatively, although the external demand market shrinks, food exports will shrink by 9.88% in 2020, and manufacturers' business strategies tend to be conservative, but the local market demand is still strong. Taking 2020 as an example, the annual output value of the aquatic products, meat, vegetable, and fruit processing and preservation industries, and the non-alcoholic beverage manufacturing industry will increase by more than 8%, pushing up the overall output value to show growth.

The pandemic has also prompted reforms and innovations in the food industry. First, supply chains must be more agile and resilient to avoid unforeseen events affecting the supply chain. Second, consumers are becoming more environmentally aware, and brands must combine environmental protection and green energy, such as reducing packaging materials, to increase customer loyalty. Furthermore, consumer satisfaction is often directly proportional to the freshness of the food, so shortening the delivery time is critical. In this case, manufacturers will rush to introduce blockchain technology to achieve decentralization, to shorten the logistics time, and this will become a major trend in the food industry. In addition, online consumption has become the mainstream mode. Regardless of whether the epidemic eases in the future, it will be the general trend for the food industry to open online and offline sales channels.

To cope with the impact of emergencies such as the new crown epidemic on the market:
  • The epidemic has changed consumer behavior, and the demand for e-commerce and home delivery has increased. Therefore, in addition to the existing dealer system and physical store sales business, mobile shop vehicles and e-commerce services have been launched, driving revenue to rise steadily.
  • Grasp the differences between various consumer groups and regions in the market, to develop and select products suitable for fast-selling to meet the needs of consumers.
  • In response to consumer technology and youth, change the business model of the retail industry, introduce a new retail ordering system for sales channels, and provide online shopping options for terminal consumers.

Challenges Facing the Food Industry:

Consumers' awareness of rights and interests has been greatly improved, and the requirements for food safety quality have become increasingly strict. Various countries have stricter regulations on food import control, and complex legal compliance requirements have become the competitiveness threshold for food factories. Taiwanese manufacturers have gradually established a good product supply chain, including the optimization of raw material management, whether they set up factories in China or overseas. Improve quality control capabilities and stable and smooth logistics, and gradually improve the quality and quantity of products. In addition, the global population growth, and the rise of emerging countries, coupled with climate change and the gradual scarcity of resources, will bring unprecedented uncertainty and crisis to the global food supply in the next hundred years.

Globalization has made the food supply chain diverse and complex, and food safety problems have emerged in an endless stream. The authenticity of food will become an important demand for food production and marketing. The global population is gradually aging and the birthrate is decreasing. In the next 10-30 years, many countries or regions will enter the aging process. It is expected that the problems of young laborers and elderly people will become increasingly serious. Demographic changes and increasing health awareness, coupled with advances in life and medical technology, will increase people's income and will have a stronger awareness of health and personalization. The food industry faces a severe test. At a time when global grain stocks have been declining for five consecutive years, the Russian-Ukrainian war has stalled grain exports along the Black Sea coast. And Ukraine's abundant agricultural products cannot be exported, exacerbating fears of food shortages and rising trade control barriers since the COVID-19 outbreak. These problems are adding to the already skyrocketing global food inflation.

  • Food safety first: Production history or traceability system, systematic management, and communication with consumers at the same time.
  • Changes in consumer demand: The elderly and healthy food are increasingly valued, the proportion of online sales is increasing, and the channels are complex and diversified.
  • Create unique value of products: Whether in health or localization demands.
  • Restricted access to resources: Extreme climates are increasingly demanding raw materials, energy, and water.
  • Integrate into international competition and cooperation: Cross-border competition poses a challenge to regulations, linkages, and resource use.

Transformational Changes in the Fresh/ Processed Food and Catering Food Industry:

  • Change 1: After the epidemic, the public’s doubts about domestic use have only been reduced slightly, and the new interaction model combining experience and safety has become the focus
    Policies such as home isolation and going out restrictions during the epidemic have reduced the opportunities for people to eat at restaurants. The survey pointed out that 49% of the people said that they would reduce the amount of food and beverage consumption; among them, 57% pointed out that the proportion of domestic use will be reduced. Among the 32% of people who increased their food and beverage consumption during the epidemic, nearly 50% of the respondents said they would spend on low-contact take-out and delivery. After the epidemic, the public will still be worried about internal use. How to maintain consumers' trust in the internal use of catering and develop a new interactive model that considers a good dining experience and low-contact services have become current issues for major catering companies.
  • Change 2: The epidemic has pushed the new generation to rely on fresh and processed food
    People are worried about the risk of infection when eating out, which has led to a significant increase in the frequency of home cooking, which has also driven the consumption of fresh/processed food. If the cross-analysis is carried out from the age range, the young group under the age of 25 is the most significant. Not only did up to 50% of the respondents during the epidemic indicate that they would increase their consumption of fresh food, but the proportion of the expected increase in consumption after the epidemic increased, rising to 62%. Preliminary analysis shows that convenient and diverse choices, mature refrigeration and transportation technology, and a dense and fast transportation network are the keys to winning the favor of people under the age of 25.
  • Change 3: Younger generations focus on delivery platforms and e-commerce platforms, while silver-haired groups prefer branded e-commerce
    Looking at the performance of various channels in the food industry during the epidemic, offline channels were affected by the epidemic, while digital platforms saw a significant increase in frequency: 48% of the public increased the frequency of use of e-commerce platforms, 47% increase the frequency of use of delivery platforms, and some 34% of the population increased the frequency of using branded e-commerce. In the growth of digital channels, the most obvious growth trend can be seen in the younger groups under the age of 25 and 26 to 35 years old. About 60% of the respondents on both delivery platforms and e-commerce platforms indicated that the frequency of use has increased. The elderly group, traditionally classified as a few strangers, also used online platforms for food-related consumption during the epidemic, especially the group over the age of 56. As high as 53% of the respondents indicated that they increased their consumption of branded e-commerce. The epidemic has changed food and beverage consumption habits regardless of generation. Compared with other age groups, senior citizens follow and recognize brands significantly higher than other generations in the process of digital transformation of consumption behavior. For the food industry to seize silver business opportunities, branding, interaction, and in-depth membership management will be the keys.
Published by Nov 08, 2022 Source :events, Source :udn

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