Similar to every other major industry, food manufacturing isn’t immune to the rapid advance of technology and changing market conditions. The global food giant, Kellogg, recently announced it would lay off 1,100 workers in a bid to improve efficiency. The layoffs, which follow similar job reductions at other major industry producers, come at a time of great change in the grocery industry.
Tech firms like Instacart are helping speed the transition to “delivered on demand” grocery shopping. Meanwhile, giant retailers such as Wal-Mart and Target have entered the food sales business in full force. The most disruptive element, however, remains automation, which will ultimately be the deciding factor in determining how the industry evolves and how employees will be affected by these changes.
Evolution of the Food Industry
Nowadays, it is no secret that automation has had a profound impact on manufacturing. It lowers labor costs and increases productivity, which in turn, creates greater profitability and more shareholder value.
It is a perfect scenario, except for one thing: More automation often means fewer jobs. Here is a fascinating statistic that shows the true impact of automation: Even though the United States has lost five million factory jobs since 2000, manufacturing production continues to rise. In fact, it rose by 17 percent from 2006 to 2013 alone. The primary reason is automation. Hyper-efficient robots are doing the work that people used to do, while helping the workers who remain become even more productive.
Although trade and outsourcing often get the political blame for manufacturing losses, the truth is that automation will be continue to be the primary driver of this phenomenon. Today’s corporations must fight fiercely to remain competitive in an environment where shareholder value is supreme and competition from disruptive outside entities is a constant challenge. Food manufacturers such as Kellogg continue to look to robotics to help keep costs low and productivity high.
What this Means for Future Workers
Given the relentless progress of automation and the general trend away from brick-and-mortar stores in favor of delivered goods, further job losses in the global food industry are highly likely. Although it is important to remember that manufacturing jobs may be lost, other kinds of jobs in the industry will flourish.
More specifically, jobs on the technology side of the food industry will likely continue to blossom, as companies seek new ways to manufacture and distribute their products more efficiently and for less money. Workers with expertise in logistics, automation and other heavily tech-influenced areas will continue to be in high demand. In this sense, there is still an ongoing need for talented workers in the food industry.
The Bottom Line
Although automation is undoubtedly good for businesses, its impact on employees is a mixed bag. Recent job losses in the food manufacturing industry show the negative effects this has caused. However, it is important to remember that automation also opens up new employment opportunities that are in line with skills needed to thrive in the 21st century. Organizations that streamline processes with automation and expand their vision of human resources will be in the best position to succeed in the future.
Contact us at Duffy Group, Inc. for more information on the changes in the food manufacturing industry.