Turning sustainability into an advantage in food and beverage

The global food and beverage industry is under growing pressure to manage its resources, cut emissions and reduce waste through sustainability initiatives. In Australia, healthy innovations in food processing and sustainable packaging are encouraging a shift to eco-consciousness. According to a 2024 survey by Monash Business School, 46% of Australian shoppers are swayed by sustainability when making a retail purchase.

Globally too, consumers are increasingly choosing to buy from companies that take a clear stance on sustainability, with many willing to pay a premium for responsibly sourced products. Australian consumers in particular are showing a strong preference for locally sourced goods, underscoring a desire to support brands that demonstrate tangible environmental and sustainability efforts. This is a significant opportunity for food and beverage companies to attract and retain an increasingly health- and eco-conscious customer base.

More recently, the shift towards sustainable practices has been reinforced by new legislation, signalling that sustainability is no longer just an ethical consideration, but a business priority. According to the 2024 ISG Provider Lens Sustainability and ESG report for Australia, government policies introduced since 2022 have not only helped drive corporate action on sustainability but also encouraged many Australian organisations to revise their operating models.

Even as Australian food and beverage businesses are increasing investment in technology to overhaul legacy systems and strengthen compliance, they continue to lag behind their European counterparts in recognising the full benefits of sustainability transformations, particularly when it comes to AI.

No doubt, some food and beverage companies are investing in advanced technologies, such as data management systems, to track sustainability metrics. However, there remains a real opportunity to close the gap further through advanced, technology-driven productivity solutions that extend visibility and efficiency across the entire supply chain.

A vast majority of food and beverage organisations agree that future industry success will depend on how effectively they adopt and apply new technologies. The challenge lies in how that technology is harnessed to deliver meaningful impact in an era defined by eco-consciousness.

Given the industry’s vast scope and complex supply chains, there is no one-size-fits-all solution. Many companies still face significant barriers, from high implementation costs for sustainability initiatives to data silos and outdated legacy systems that hinder accurate impact tracking. This is where enterprise resource planning (ERP) systems — coupled with AI capabilities — offer an advantage.

These technologies allow food and beverage organisations to efficiently manage raw materials, reduce waste and optimise yield, while supporting compliance with evolving regulations such as Australia’s national food-waste reduction targets. By tracking raw materials and finished products through the supply chain, businesses can deliver traceability and supply chain transparency while ensuring alignment with environmental standards increasingly valued by consumers.

For businesses that cite a lack of in-house expertise as a reason for delaying the integration of AI-driven solutions, it is time to overcome this critical roadblock. Manufacturers across industries are rapidly accelerating their use of AI and machine learning as they push for greater automation and improved productivity, efficiency and quality. By keeping pace with this trend, Australian food and beverage companies can gain a competitive advantage — not only by meeting regulatory requirements but by positioning themselves ahead of their peers. While compliance remains the foremost concern, most businesses are eager to advance sustainability goals if they can do so profitably.

The key to success lies in investing in the right digital solutions that align with business objectives, ensuring cost efficiency, regulatory compliance and consumer trust. As Australia prepares to fast-track its environmental law reform before the end of this year, now is the time for food and beverage companies to embrace digitalisation. Doing so will enhance agility, streamline processes, and enable the industry to better navigate supply chain disruptions, cost pressures and shifting consumer expectations.

Image credit: iStock.com/Екатерина Скворцова