Modernization isn’t a quick fix in an emergency scenario or a reaction to broken technology. It’s a proactive growth strategy.
Making the transition to connected, smart technologies is the number one way that food and beverage organizations plan to drive positive business outcomes over the next five years. The vast majority (95%) of these organizations are actively evaluating, piloting, or using smart manufacturing technology in some capacity.
But effective modernization efforts require more than simply upgrading to smart manufacturing technologies. And in the food and beverage industry, producers contend with unique pressures due to workforce challenges, high operational complexity, and increasing competition from ecommerce startups and private label brands. These factors necessitate a holistic, people-centered modernization approach to achieve long-term impact.
To understand how food and beverage manufacturers are navigating modernization in a highly dynamic environment, we analyzed their responses from the latest State of Smart Manufacturing Report: Consumer Packaged Goods Edition. From the biggest internal roadblocks and workforce challenges to the top technology investments, discover how leading producers are prioritizing modernization initiatives that deliver value across the enterprise.
1. Long-term business impact is the primary modernization motivator for food and beverage organizations.
Faced with diversifying consumer preferences, evolving cyber threats, and intensifying technological demands, manufacturers understand that modernization is critical to maintaining secure and scalable operations. They also recognize its potential to address needs beyond immediate risk mitigation. Food and beverage organizations cited long-term business impact as the number one driver of technology investments — followed by increased capacity and securing operational technology (OT) assets.
When asked what positive business outcomes producers were looking to achieve from their smart manufacturing technology, financial health was a prominent theme in the top three responses. Improving overall financial position and revenue growth tied for the number one spot. Behind improving quality, cost reduction and driving overall equipment effectiveness (OEE) tied at number three. Manufacturers see smart technology adoption as a strategy for achieving operational cost savings — a high priority as companies seek to drive margin improvements in the face of growing consumer price sensitivity.
These insights point toward a mindset shift that values long-term, transformative technological investments over quick wins and temporary fixes. A proactive modernization approach drives long-term competitiveness through stronger financial performance, higher quality products, and environments that are more secure and designed to support growth. When producers take a large-scale, proactive approach to upgrading aging equipment, for example, they can facilitate significant improvements in functionality, downtime, and cost savings.
2. Resistance to change remains a major obstacle to digital transformation.
While organizations overwhelmingly see the criticality of modernization, they identify resistance to change and leading or guiding meaningful change as their two biggest leadership obstacles. Yet even with change management as a prominent challenge, the majority (82%) of producers said that internal and external obstacles are accelerating their need for digital transformation.
To manage internal risks — from ensuring technology accessibility to implementing infrastructure that meets modern cybersecurity standards — leaders see smart technology investment as a powerful tool. Smart manufacturing technology adoption was the number one way that organizations reported they mitigate internal risk. It was also the number one way they plan to drive positive business outcomes over the next five years.
Though smart manufacturing adoption is the chosen path forward for many producers, the success of investment hinges on their organizational capacity for change. Leaders are facing a pivotal decision point where mindset and organizational readiness are just as important as integrating new technologies. To maximize modernization investments, leadership teams must implement a framework to gain multi-level buy-in and execute an effective change management strategy. This on-demand webinar provides a practical overview of how manufacturers can build the business case for modernization and gain the necessary organizational support.
3. Workforce challenges point to the need for upskilling and knowledge infrastructure in modernization roadmaps.
The industry may be enthusiastic about the potential of advanced technologies, but manufacturers cite widespread workforce challenges and existing infrastructure limitations as roadblocks to their day-to-day applications. Along with cost, producers identified lack of skill set to implement smart technology and optimize its use as a top three barrier to adoption, as well as insufficient technology infrastructure and data readiness.
With an eye toward the next 12 months, manufacturers reported that their biggest internal obstacle to growth is finding and adopting technology that is accessible for the average employee. Diving deeper, they identified training current employees on updated processes, employee retention, and knowledge retention as their top three biggest workforce-related obstacles over the next year.
Producers understand that aging equipment hinders growth, but implementing smart manufacturing technologies comes with a learning curve. Infrastructure limitations, skills gaps, labor shortages, and other workforce challenges can slow modernization efforts and make it difficult to retain critical institutional knowledge.
Successful modernization roadmaps prioritize people — through upskilling, enhanced communication, structured knowledge retention, and simplified workflows — to ensure that smart manufacturing investments deliver lasting value. Discover how a connected worker solution empowers frontline workers with enhanced knowledge sharing, standardized onboarding, simplified task coordination, and optimized workflows.
4. Despite overwhelming investment in smart technologies, food and beverage organizations report that less than half of their collected data is used effectively.
With the massive amount of data generated by smart technologies, producers have the potential to implement actionable, data-informed plans for improvement. Manufacturers recognize the value of data — a mindset reflected in their investments. Nearly all food and beverage organizations have invested in or plan to invest in generative AI or causal AI (96%) and machine learning (93%). On the software side, most food and beverage manufacturers (95%) have adopted or plan to adopt enterprise resource planning, along with supply chain planning (94%) and quality management systems (93%).
Despite overwhelmingly leveraging smart manufacturing technologies, many companies still struggle to process, organize, and apply operational data. On average, organizations said less than half (44.97%) of the data they collect from currently employed technologies and processes is used effectively. Simply accessing data is no longer an issue for many operational teams. Without the right tools and data strategy, most of the data generated from industrial technology is siloed and inconsistently structured, making it time-intensive and resource-draining to contextualize.
Smart technology adoption — and harnessing the data that comes with it — is a key pillar of modernization. To illuminate a clear path toward actionable data insights, organizations can unify control and information on a single, Integrated Architecture® system. This approach consolidates data across disciplines and facilitates system-wide intelligence. An integrated solution also provides tools to analyze data, structure it consistently across sources, and form predictive recommendations. For original equipment manufacturers (OEMs), DataReady™ solutions enhance smart machines with the ability to organize, standardize, and egress data to wherever it’s needed. Customers can remove complexity and visualize data at the machine level, supporting strategic analysis, planning, and enterprise-wide improvements.
5. Manufacturers view AI as a critical lever for addressing workforce challenges and unlocking operational value.
Among smart manufacturing technologies, organizations value artificial intelligence in particular — namely generative AI, causal AI, and machine learning — as a tool to drive resilience and competitive differentiation. When asked which smart manufacturing capabilities drive the biggest business outcomes, AI and ML tied with real-time asset performance visibility and in-line quality for the number one spot. Producers also cited adopting and using AI as their second biggest strategy for mitigating internal risk, behind adopting smart manufacturing technology in general.
These viewpoints are backed by results. In the last 12 months, organizations indicated generative and causal AI among the top three technology investments that gave them the strongest ROI. In an industry environment where rapidly changing demand and complex value chains are the status quo, it’s no surprise that industrial AI is driving significant business outcomes. Whether filling skills gaps, simplifying workflows, or correcting yield loss, industrial AI provides a digital toolkit for manufacturers to overcome process hurdles and adapt to market volatility.
For organizations that have invested or plan to invest in AI, a strong data foundation rapidly accelerates time-to-value. This can look like breaking down data silos with Industrial DataOps, leveraging a unified control and information system, or consolidating process and power control to enable broad data intelligence. It can also be helpful to explore practical use cases of industrial AI when planning an integration strategy. From reducing product giveaway with soft sensors to managing moisture content with model predictive control, explore industry-specific AI applications in this on-demand webinar.
Design Your Roadmap for Lasting Impact
Modernization roadmaps that invest in both advanced technologies and the people who use them have the highest potential for success. Oftentimes, this includes prioritizing solutions that are deeply integrated, modular, and scalable — empowering teams to more easily share knowledge, cross-train employees, and redeploy resources across disciplines. These solutions also generate more contextualized data insights to support the journey toward autonomous operations.
As a global market leader in the food and beverage industry, Rockwell Automation has a deep understanding of the challenges you’re facing. We understand that it can be difficult to balance short- and long-term objectives, which is why we’ve built a practical guide to achieving organizational alignment and kick-starting transformative initiatives. This resource helps you extend modernization goals beyond tackling immediate needs to create holistic, lasting impact. Additionally, our industry experts are available to help you chart your modernization journey. Contact us today to take the first step.
