5 Food Logistics Technology Trends for 2024

The world of food distribution can sometimes move at a breakneck pace—with new supply chain challenges, SKU proliferation, and changing consumer demands all conspiring to change the game significantly in recent years. The technology that powers food distribution, on the other hand, often moves a little more slowly.

The result is that sometimes the technology trends that are most impactful for food distributors can be a little slow in materializing. But that doesn’t mean they’re not on their way or that they’re not poised to meaningfully affect the industry.

2024 is likely to be no different. Some trends that have been on the horizon in the food distribution space will come to fruition, and some new trends will emerge on the horizon for the next few years. One thing’s for certain: business as usual will not be an option for most players in the industry. 

With all that in mind, here are a few trends to watch out for this year in food logistics technology:

1. With fluctuations in supply and demand, food distributors will need to remain more flexible than in the past.

Most food distributors have historically leveraged static routes, delivering to the same customers at the same time week in and week out. This helps ensure stability and consistency(your customers can count on receiving the expected service at the expected time), but not a ton of flexibility. 

Stability and consistency are valuable, to be sure. But with rising costs, a difficult labor market, and ever-changing customer demands, the pendulum is swinging back towards the importance of staying flexible. Distributors have to grapple with large market swells and rapid changes in demand levels for particular SKUs, which means they can’t count on being able to roll out the same plans every week and find a way to make it work while staying profitable. 

Distributors will need to look at trends, distribution volumes, how much they’re delivering at certain times, and if they need to shift how often they’re delivering per week to keep their margins intact. The ability to make adjustments to adapt to new circumstances and evolve logistics plans as needed will be crucial here. 

2. Food distributors will pay closer attention to “what-if” scenarios and strategic routing

One of the ways that distributors will achieve the kind of flexibility and adaptability we’re talking about in the coming year will be with an increasing reliance on “what-if'' scenarios. What-if scenarios enable distributors to simulate the effects of proposed plans or changes in a virtual environment before deploying them in real life. In this way, they can make informed choices between competing logistics planning options. 

This kind of process has been around for a while now, but with the increasing prevalence of AI and cloud computing, we expect it to become more readily available and thus more prevalent. In the past, the technical limitations of this sort of technology might have limited its use to larger businesses that were able to deploy technology on premise—but SaaS technology has rapidly changed the game here, and more mid-sized distributors will be able to take advantage of this kind of planning tool a lot more easily in the future. 

Strategic planning—i.e. developing baseline distribution plans around which to generate daily routes—will be in the same boat. Where complex, heavy software implementations once created a high barrier to entry, newer cloud-based technology solutions make it relatively painless to upgrade your strategic planning capabilities. 

The result is that more and more distributors will be able to take a smarter, more data-driven approach to planning. Instead of rolling out plans that are opaque in terms of profit margins, cost-to-serve and other key metrics, distributors can approach every change in market conditions (e.g. taking on new customers, offering new products, expanding in new geographies, etc.) with an eye towards optimizing customer service and cost-to-serve. This requires sophisticated technology that can generate efficient plans rapidly (this is actually an area where AI can be a big helpI, but these kinds of technology deployments are becoming more and more accessible.   

3. Visibility will becomes more crucial than ever for delivering on the customer experience

One of the reasons that food distribution has been so hard to optimize in the past is a lack of visibility. Once the driver leaves the hub, you don’t know when they’re going to make it to the customer site, and it’s not until they get back that you know how the delivery went. 

This lack of visibility can make it hard to ensure great customer service and efficient delivery execution. As margins get slimmer and customer demands become more changeable, we’re expecting visibility in logistics (particularly in last mile deliveries) to become more crucial than ever. 

For instance, if you’re trying to maximize the number of stops your drivers can make per day, it can be valuable to have a helper come to the delivery sites right after the delivery to help with stocking and staging product at the customer’s store. This can help get the driver on the road more quickly—but it requires the helper to have total awareness of the driver’s status. 

By prioritizing visibility, you can power new efficiencies like this and improve the level of service you offer to customers. This can help maintain margins and boost customer retention, which is why we expect to see more and more of it in the coming year. 

4. Small and midsize players will upgrade their tech stacks to outperform large competitors

At this point, you may have noticed a bit of a theme developing in the predictions above. With strategic planning, what-if scenarios, and even visibility, there’s an emphasis on technology becoming increasingly central to the way that distributors respond to change. We’ve seen that playing out over the course of the past few years, and we don’t expect it to slow down any time soon—in fact, we expect to see this trend accelerate. 

One big reason for this is the fact that SaaS solutions have significantly lowered the barrier to entry for deploying sophisticated logistics technology. It no longer requires a significant internal IT staff and on-site servers to power your route optimization, for instance. Instead, you can deploy your last mile technology in the cloud with minimal startup costs or ongoing in-house maintenance needs. 

For mid-sized distributors, this has the potential to open up serious new possibilities. In the area of last mile logistics alone, SaaS platforms can help speed up route optimization, simplify integrations, and ensure visibility and compliance across your entire network. 

5. AI will have an impact 

2023 was the year of AI-related hype for a lot of people—and food distributors can certainly be forgiven for looking at ChatGPT and writing it off as something with little practical application in their world. For now, that’s probably true of large language models like ChatGPT, but AI is already starting to make an impact in food logistics. In 2024, we expect to see that impact grow steadily. 

Right now, AI has the power to improve route optimization and territory planning workflows and enable smarter ETA predictions for deliveries. It has the power to speed up the planning process so that optimization takes a matter of hours rather than weeks. And it also helps to make the kind of what-if scenario we discussed above possible. 

These processes aren’t flashy; they mostly run in the background. But they can help speed up the planning process, improve execution, and ultimately make food distributors more agile. We expect to see more of that in the coming year—especially given how much of a priority flexibility and agility will be among distributors in 2024.