Innovation has long been the engine driving growth in the food and beverage (F&B) industry. But today, amid economic pressures, regulatory shifts, and fractured supply chains, innovation alone isn’t enough. The ability to execute efficiently (think: modernizing operations, connecting teams, and bringing safe, compliant products to market faster) is what separates the industry’s leaders from the laggards.
Yet, according to research from TraceGains, a surprising number of companies are still running on empty. While 82% of F&B brands agree technology modernization is a top business priority, only 6% are fully digital today. This disconnect is more than a technical lag; it's an operational liability that can quickly turn into “digital drag,” the compounding inefficiencies of outdated tools, manual workflows, and siloed data that slow progress and stifle innovation.
The cost of standing still
The pressure to modernize isn’t a new phenomenon, but its urgency is escalating. As profit margins tighten and regulatory expectations become increasingly unpredictable, legacy systems are showing their age. Nearly seven in 10 (69%) F&B leaders still rely on manual processes, like spreadsheets, email chains, even fax to manage supplier documentation, quality audits, and compliance reporting.
This analog infrastructure might once have sufficed, but in a globalized supply chain defined by complexity and constant change, its days are numbered. Manual workflows introduce risk at every turn: mislabeled ingredients, certificates of analysis (COAs) that don’t get carefully reviewed, missed allergen updates, or incomplete supplier documentation. Each gap increases the odds of compliance failures and product delays, both costly in an industry where consumer trust is critical.
It’s no wonder nearly one-third (29%) of those surveyed admitted their current operational systems are inadequate and inefficient, often leading to significant internal challenges. And while most companies recognize the problem, progress has been slow: more than half (60%) are stuck in the messy middle implementation stage of modernization.
Economic headwinds and the modernization imperative
The modernization gap isn’t just a technical challenge, it’s an economic one. With 62% of F&B leaders citing broader economic concerns as a top worry, uncertainty is shaping decision making. But, if push came to shove and they needed to meet new compliance mandates, nearly a quarter (24%) said they would fast track tech investments within 90 days if required.
At the same time, innovation itself is being tested. Nearly 23% of respondents cited ingredient and material availability issues as a major threat to new product development, highlighting the continued need for greater agility in sourcing and supply chain optimization. Regardless of the root cause, this dynamic illustrates a critical truth: modernization is no longer optional. It’s the key to resilience. Companies that can adapt quickly to regulatory changes, supplier disruptions, and shifting consumer demands will outpace those that can’t. In this environment, technology isn’t a cost center, it’s a competitive advantage.
Why legacy tools exist
Why do so many F&B organizations remain bogged down by legacy systems? Part of the answer is the complexity and long, costly update cycles of traditional enterprise software models. Legacy ERP and PLM systems, though valuable for certain tasks, were never designed for the pace of modern business. In a market where speed is currency, waiting half a year to see value isn’t an option.
As companies weigh new technology investments, they are increasingly prioritizing ease of use and speed of deployment. Case in point: 57% said improved process efficiency and simplicity were their top motivation for adopting new technology. And 60% indicated they’d be significantly more likely to invest if a solution could be implemented in weeks, not months.
The new playbook for agility
In a fast-moving, risk-averse industry like F&B, modernization must deliver more than automation. Instead, it has to unlock agility.
This means empowering teams, from R&D to quality to procurement, to collaborate in real time, automate document management, and gain visibility across every tier of the supply chain. It also means centralizing data so compliance, sustainability, and innovation initiatives can coexist rather than compete for resources.
When modernization works, it’s not just a technology upgrade, it’s a strategic transformation. It reduces regulatory risk, enhances traceability, and accelerates time to market, all while freeing teams to focus on what they do best: innovating.
Conclusion
In the F&B world, even innovation has a shelf life. What worked yesterday may not sustain tomorrow. And just as ingredients expire, so too does outdated infrastructure.
The question for leaders is simple: is your tech expired?
Modernization equips operations to endure beyond the trend cycle. The companies that act now - replacing legacy systems, streamlining compliance, and empowering teams with digital tools - won’t just survive the next disruption. They’ll define what innovation looks like on the other side. For the rest, the cost of digital drag will only grow heavier.
