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by Daniel Harris,
Market Research Associate
Last Updated: February 24, 2017


Not only are food and beverage manufacturers closely regulated, they are also subject to heavy scrutiny by the news media. Multiple events across the globe have increased the public’s awareness of food and beverage manufacturing. More than one manufacturer has closed its doors after bad publicity about a tainted food product.

Therefore, selecting the right food manufacturing system can help manufacturers avoid making costly mistakes—such as shipping food with spoiled ingredients—in their food production operations. One of the main benefits of food manufacturing software is that it helps food manufacturers ensure quality and accuracy in their products by providing extensive features for traceability and inventory management.

The most important software functions for food and beverage manufacturers revolve around inventory, recipe management and quality assurance. Inventory management functionality should track not only amounts, but suppliers and batches as well. Each batch of ingredients must be documented from receiving through inclusion in a product and ultimately to delivery. This high level of monitoring is what allows products to be recalled in case of quality or safety issues. The Code of Federal Regulations (CFR) stipulates recommendations for recordkeeping and auditability in Title 21.

General food and beverage ERP software offers general ledger and payroll as standard features. The accounts payable feature should track the batch numbers of all ingredients by each payment. Similarly, accounts receivable should track the batch numbers of sold products to customers.

While many installations of food and beverage enterprise resource planning (ERP) systems are still deployed on premises, there are a growing number of cloud-based systems for food and beverage manufacturing, particularly in smaller operations. The cloud-based software-as-a-service (SaaS) model offers subscription pricing and reduces front-end investment in hardware that’s typical of a food processing software investment.

What Is Food & Beverage Manufacturing ERP Software?

The food and beverage industry faces various challenges, such as complying with food safety standards, checking ingredients, handling recipes, tracking expiry dates and predicting fluctuating demand. Managing all these facets manually can become difficult.

Food and beverage ERP software helps companies automate these tasks and manage every aspect of the business including quality assurance, financial management and human resources. This type of software helps monitor food safety, respond to consumer trends and improve supply chain operations. Some popular food and beverage ERP software vendors include:

Common Features of Food & Beverage Manufacturing ERP Software

Food and beverage manufacturers should evaluate whether the following functionality is present in the software they're evaluating:

FDA 21 CFR Part 11 compliance Strictly speaking, no software package can be 21 CFR Part 11 compliant because the rule stipulates administrative and procedural controls as well as technical implementation for electronic and hybrid record keeping. However, software can support 21 CFR Part 11 by completely implementing the technical requirements.
Other government compliance Systems should produce reports that are in compliance with the 2002 Bioterrorism Act and implement current Good Manufacturing Practices (cGMP). They should also support reporting for Hazard Analysis Critical Control Points (HACCP) management. It should generate any reporting required from federal, state and local authorities.
Spoilage tracking Food and beverage manufacturers must track spoilage in the ingredients while they’re in inventory. Finished products must also be tracked throughout storage and shipping. Finally, the customers (i.e., stores or restaurants) must be notified when to take expired goods off the shelf or when the goods will be retrieved.
Recipe management The system should include recipe management, ingredient substitution and batch scaling. In some cases, ingredients are encoded to keep the recipes secret.
Batch and ingredients tracking As part of compliance with the Bioterrorism Act, each batch must be identified and tracked. The ingredients of each batch must be tied to their individual batch number as well.
Quality assurance The system should support quality assurance (QA) testing, with protocols documented and implemented through the software. The QA system should randomly identify samples for testing and compare test results against norms. Advanced systems will feature dashboards that will alert management regarding problems with quality.
Recall tracking Recalls are initiated when an ingredient or product becomes contaminated. To ensure accurate, efficient recall, the system needs to identify all of the affected batches and the customers who received those batches.
Employee training tracking Part of compliance is documenting employee training. The system should track which employees have completed which training. It should also notify managers if training has expired or if employees have not completed required training.
Seasonal demand forecasting The system should track historical sales and make recommendations for seasonal sales production. The system should account for lag time in ordering ingredients, processing and delivery, then recommend dates for ordering, production and shipping.

Market Trends to Understand

Maintaining efficiency in a competitive industry. The food and beverage industry is highly competitive with approximately 21,000 companies in the U.S. alone. These businesses adopt aggressive strategies, including mergers and acquisitions, to grow their market share. Small and independent businesses will require technology systems that have plenty of features to keep them competitive. On the other hand, larger firms require systems that can manage multiple operations and locations.

Technology’s role in supply chain and consumer choices. With the widespread use of smartphones and tablets, technology is set to play an increasingly important role in consumer choices and supply chain operations. Using ERP and other software to track product ingredients, shelf life and inventory can ensure the delivery of quality products at the right time to the right customers.

Food safety concerns. According to the World Health Organization (WHO), food safety issues continue to be a concern for consumers across the globe. These issues include inaccurate labeling, use of artificial ingredients and the need for information on sourcing of ingredients. Logically, consumers place the responsibility for food safety on the manufacturers. So, manufacturers should use software to track data, digitize processes and ensure compliance and quality. Alerts and approval features in these solutions ensure that checks are carried out before a product is released.

E-commerce in food and beverage industry. Shopping online, even for groceries and food items, is common today. ERP software can provide secure and reliable e-commerce functionalities. This can help drive sales and improve profitability.

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