Food & Beverage E-Commerce: A Paradigm Shift in Manufacturing

What Does the Rise of E-Commerce Mean for Food Manufacturing?

July 19, 2023

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Food and Beverage E-Commerce: A Paradigm Shift in Food Manufacturing

A retail revolution is unfolding in front of our eyes. E-commerce is dominating, already accounting for 20.8% of retail purchases. However, this isn't a fleeting trend. Forbes' 38 E-Commerce Statistics Of 2023' predicts this figure will grow to 24% by 2026, further entrenching online shopping in our daily lives. The United States is leading this digital charge, with sales poised to exceed $1.1 trillion this year. The global market could also see its value balloon to $6.3 trillion by the end of 2023 and over $8.1 trillion by 2026.

Amid the e-commerce boom, the U.S. food and beverage (F&B) industry is scrambling to seize a golden opportunity despite food and beverage e-commerce traditionally lagging behind other sectors. Nevertheless, food manufacturers are resolute in changing this narrative despite long-standing pain points like managing perishable items and unique delivery and storage requirements. As they rethink everything from production to logistics, their innovative responses will shape the F&B industry's future and how companies can leverage e-commerce.

The Impact of E-Commerce on Food Manufacturing

The inexorable rise of e-commerce has ushered in a wave of changes in food manufacturing. We're witnessing a meaningful shift in consumer habits and supply chain dynamics, shaping a new normal for F&B e-commerce.

Changing Consumer Behavior

The food and beverage industry is transforming significantly, marked by the rise in online grocery shopping and direct-to-consumer sales. Today's consumers, who value convenience and personalization, are steering this change. As food e-commerce gains traction, the widespread use of smartphones further amplifies this shift, making online shopping more accessible and seamless. Thus, with the projected surge in online food delivery expected to reach 21% of the market by 2025 (up from 13% during the pandemic), strategic adaptation is more urgent than ever.

Meal kits encapsulate these consumer desires perfectly, a market segment projected to soar from $11.1 billion in 2021 to an astounding $43.4 billion by 2031, based on Allied Market Research’s findings. Companies like HelloFresh, Blue Apron, and Home Chef spearhead this revolution, offering meal kits and pre-portioned ingredients directly to consumers' doors.

Additionally, the burgeoning demand for personalization has given rise to niche providers such as ButcherBox, Goodfood, Sea to Table, and Territory Foods, who enhance the consumer experience in the F&B e-commerce space by catering to unique dietary preferences.

Evolving Supply Chain Dynamics

Modern consumer expectations are soaring - a Forbes report indicates that 90% of consumers now anticipate standard two- or three-day shipping. Further, 32% will quickly abandon their shopping carts if delivery times miss their expectations. This accelerated demand for speed shapes the ongoing evolution of supply chains in the food and beverage e-ommerce industry and the importance of specific solutions like expedited trucking.

Among this sector's myriad challenges, ensuring efficient order fulfillment and last-mile delivery stand out prominently. Everything from warehouse location, the distance to the customer, the specific type of food, and even the time of day can influence supply chain efficiency. Some, though, are turning these headwinds into opportunities by focusing uniquely on logistics and customer demands. Amazon Fresh, for instance, offers same-day delivery of fresh groceries for Prime members in select cities. Similarly, Instacart allows customers to order groceries from local stores for delivery within an hour. Whole Foods Market assures a two-hour delivery window for orders above $35. Other services like GoPuff function like on-demand convenience stores and deliver food, drinks, snacks, household essentials, and more within minutes.

However, even as certain F&B e-commerce companies excel in order fulfillment and last-mile delivery, ensuring product quality and safety during transit remain significant challenges. Unpredictable environmental changes during transportation can threaten food safety. Here, reefer trucking for perishable goods often helps by ensuring optimal conditions throughout transit. Yet other challenges can still persist, such as physical damage and human error in handling or storing food products.

As E-Commerce Continues to Grow, Food Manufacturers Adapt

The world of e-commerce is rapidly expanding, and this presents many challenges and opportunities for those in the food manufacturing industry. As the potential for success in this sector becomes increasingly apparent, businesses seek new and innovative ways to reinvent their strategies, from production to distribution, to stay ahead of the game.

Production and Packaging

Revamping production processes to meet e-commerce demands is step one for food manufacturers to kickstart their e-commerce transformation. Considering the increasing popularity of meal kits and individual servings that offer convenience and customization, it's imperative to rethink the process flow to cater to these unique product formats.

Simultaneously, packaging considerations have taken the forefront in F&B e-commerce. It's not just about aesthetics anymore; packaging now plays a pivotal role in maintaining product integrity during transit. As a result, manufacturers have been dedicating resources to researching and developing durable and transport-friendly packaging solutions to ensure that food products arrive at their destination as fresh as the day they leave the factory.

Inventory and Demand Planning

Inventory management and demand forecasting, once a game of educated guesses, are becoming data-driven pursuits in the e-commerce era. The challenge lies in maintaining a delicate balance; too much inventory could lead to wastage, while too little could result in missed sales opportunities.

Modern data analytics tools offer a solution, providing real-time insights into buying patterns and trends. These insights help manufacturers forecast demand more accurately, optimize inventory, and plan production schedules efficiently.

Logistics and Distribution

The ability to consistently deliver products in a timely and reliable manner can make or break a brand's reputation. That's why it's so essential to establish a solid logistics and distribution system from the get-go.

Many manufacturers partner with specialized carriers and fulfillment service providers because a robust delivery network is so non-negotiable in food e-commerce. Such collaborations bolster delivery capabilities and allow manufacturers to focus on their core competency - producing high-quality food items.

Traceability and Food Safety Systems

With the rapid transformation of the food industry comes heightened regulatory attention. Manufacturers proactively respond by investing in end-to-end traceability systems that monitor the food journey from farm to table. This proactive approach not only fulfills regulatory compliance but also accentuates safety and quality, ensuring that the food reaching consumers is of the highest standard.

Furthermore, the importance of food safety for online shoppers drives manufacturers to reinforce safety protocols throughout the supply chain. They ensure safety from ingredient sourcing to final delivery by instituting stringent quality checks and sustaining hygienic production environments.

As the Demand for Reliable Food and Beverage e-commerce Continues to Grow, Collaboration is Key

The food and beverage sector is dramatically transforming due to the meteoric rise of e-ommerce. Ensuring efficient operations and customer satisfaction, the power of collaboration significantly drives this evolution.

Importance of Collaborating with Logistics Providers

A key partnership for food manufacturers in the e-commerce era is with logistics providers. Reliable, efficient shipping isn't just a bonus; it's necessary for an industry where the quality of goods often depends on speedy and secure delivery. Establishing collaborative relationships with trusted logistics partners can simplify the distribution process, reduce delays, and enhance product quality upon delivery.

Moreover, partnerships with logistics providers offer invaluable insights into optimal storage and handling practices. These insights can help manufacturers refine their processes, reduce waste, and ultimately deliver a fresher, higher-quality product to the end consumer.

Leveraging Partnerships to Optimize Operations and Customer Experience

Strategic partnerships with logistics providers offer far more than efficient shipping and distribution in the food and beverage e-commerce world. These alliances amplify operational efficiency by equipping manufacturers with a suite of advanced tools and data resources. Leveraging these, manufacturers can deepen their market comprehension, streamline operations, and implement data-driven inventory management and production planning strategies.

Moreover, a focus on partnerships can also reshape the customer experience. Manufacturers collaborating closely with diverse stakeholders can craft unique online shopping experiences tailored to individual customer preferences. This personalized approach nurtures brand loyalty and promotes customer retention, further strengthening F&B e-commerce.

Reaping the Benefits: F&B E-Commerce and the EFS Advantage

As food and beverage e-commerce expands, opportunities and challenges for food manufacturers simultaneously appear. Success in this rapidly evolving terrain hinges on navigating a wide range of changes, from new production and packaging processes to sophisticated logistics and traceability systems. However, with the right mindset and a willingness to adapt, there are endless possibilities for growth and success in this exciting industry.

Striking a balance between quality, speed, and affordability, Entourage Freight Solutions (EFS) offers bespoke solutions for success in food e-commerce. With an around-the-clock network and real-time, IoT-enabled tracking, EFS gives businesses full control and transparency over the transportation of their goods. A robust portfolio of over 7500 specialized carriers, including those in refrigerated freight and dry bulk goods, also helps provide scalable solutions aligned with growth objectives. Moreover, with EFS's expedited freight services, businesses can maintain supply chain readiness and provide positive customer experiences.

So take the next step to a fruitful e-commerce future. Speak with an EFS Freight Specialist today to learn how to enhance your food e-commerce capabilities and explore the potential benefits.

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Tariffs, Trade Policy, and the Great Freight Fallout

By Nick Terry • April 28, 2025

In 2025, trade policy is no longer something that the freight industry can leave on the back burner. Trade policy today is shaping strategy at every level. From tariff escalations and retaliatory duties to sweeping regulatory changes and targeted maritime fees, supply chain leaders are navigating a freight market in which unpredictability is the only constant. Sourcing decisions are shifting, pricing dynamics are unstable, and long-standing operational models are being rewritten in real time. This edition brings together key stories highlighting the growing pressure across logistics channels. Each development points to an industry moving fast, and often reactively, to keep pace with volatile policy decisions. Tariffs Stall US Freight Recovery as Shippers Pause Orders The recent move by the U.S. Trade Representative (USTR) to impose entrance fees on Chinese-built ships calling U.S. ports has only added to the confusion and uncertainty gripping global supply chains and freight operations. Shippers are pausing plans and slashing orders, with truckload volumes, containerized imports, and manufacturing output all showing signs of contraction. Ocean freight spot rates have collapsed: Asia-U.S. West Coast rates have fallen 61% since January to $2,050 per FEU, while East Coast rates have dropped 53.7% to $3,100 per FEU . Blank sailings are rising, with vessels leaving Asia half-empty. Amazon and Five Below are among the major retailers reducing orders from Asia. Container imports jumped 15.3% in 2024, but forecasts now predict a 20-27% decline through the summer. Exporters, particularly agriculture and forestry suppliers, are also squeezed, facing 125% retaliatory tariffs from China. Truckload and intermodal rates remain stagnant, while U.S. factory output fell sharply in March. US Apparel Importers Brace for Long-Term Volume Declines According to Trade Partnership Worldwide, a 124.1% tariff on Chinese clothing and footwear is expected to reduce U.S. apparel imports by 1.6% annually . China still accounts for 41.7% of apparel shipments, leaving limited flexibility for diversion. The American Apparel and Footwear Association (AAFA) is warning of price hikes and mounting infrastructure stress as sourcing pivots toward Vietnam, India, and Indonesia. A looming May 2 deadline for de minimis exemptions could further complicate flows and delay deliveries. Even with a temporary 90-day pause in reciprocal tariffs, the policy uncertainty already affects long-term planning. AAFA CEO Steve Lamar calls the shifting policies “chaotic,” and warned that high tariff pressure will hit both importers and U.S. manufacturers reliant on Chinese components. Port and rail capacity limitations at larger gateways are adding to concerns. Retailers now face rising costs, shrinking margins, and operational delays — all while consumer demand continues to shift rapidly. Freight Pricing Gains Lose Momentum According to the TD Cowen/AFS Freight Index, Q1 truckload rates rose 5.9% above the 2018 baseline, but are expected to decline slightly in Q2. Shippers are responding to tariff threats with aggressive front-loading and shorter-haul routes, driving per-shipment costs to three-year lows. LTL carriers remain focused on profitable lanes and high-quality freight rather than chasing volume. The index forecasts a 0.7% year-over-year increase in LTL rate per pound for Q2 , despite sustained demand softness and macro uncertainty. A key driver behind the softening spot market conditions is a shift to shorter hauls and regionalized distribution, pushing per-shipment costs to their lowest point in more than three years. This trend reflects how retailers and manufacturers are repositioning inventory in response to tariff volatility, as NRF’s Jonathan Gold and DAT analyst Dean Croke noted. Meanwhile, the LTL sector is seeing a 4% rise in fuel surcharges, offsetting lower weights and shorter hauls. With the freight market still under pressure after 26 months of contraction, optimism remains subdued as we enter the midyear period. US Truckload Freight Spot Rates Continue to Fluctuate National benchmark rates have experienced a decline across all categories. As of April 18, dry van decreased by 4 cents to $1.62, reefer by 2 cents to $1.88 , and flatbed by 3 cents to $2.16. This marked the first overall decrease since late January, signaling potential shifts in market dynamics. These changes can be attributed to factors such as tariff uncertainties and tighter capacity, especially affecting the flatbed market. Flatbed rates rely heavily on manufacturing activity in the country, which has been particularly hard-hit by the ongoing trade war with China, and to some extent, with the rest of the world. US Finalizes Tiered Fee Plan Targeting Chinese Ships The U.S. is moving forward with a revised plan to levy voyage-based fees on Chinese-owned and Chinese-built ships calling at American ports. The U.S. Trade Representative (USTR) announced the measure as part of a broader Trump administration effort to counter China’s dominance in shipbuilding and logistics while reigniting domestic ship construction and port infrastructure investment. Starting in six months, Chinese operators will be charged $50 per net ton, with an annual increase of $30 for three years . Non-Chinese carriers using Chinese-built vessels will face lower rates, beginning at $18 per ton or $120 per container, with annual increases. The USTR capped fee applications at five voyages per vessel annually, scaling back its original, more punitive per-port-call proposal after intense industry pushback. The fees are tied to findings from a USTR investigation, which concluded that China’s shipbuilding dominance — producing 29% of global fleet capacity and 70% of all container ships on order — stemmed from unfair trade practices. Exemptions apply to ships arriving empty, those in the Great Lakes or U.S. territories, and some bulk exports. LNG vessel transport restrictions will phase in over 22 years to support U.S. production. China’s largest container carrier, Cosco Shipping Lines, has sharply criticized the USTR’s plan. In a strongly worded statement, Cosco labeled the move as “discriminatory,” and warned it would disrupt global industrial and supply chain stability. Cosco denied allegations from that USTR investigation that claimed China manipulated its shipping and shipbuilding sectors to gain an unfair advantage. The carrier said it upholds “integrity, transparency, and compliance” in global competition and remains committed to ensuring the resilience of international trade. Walmart Investing $6B in Mexico, Central America Store Expansion Walmart of Mexico and Central America will invest $6 billion to open new stores across the region , reinforcing its long-term commitment to growth in Latin America. The expansion will include Bodega Aurrera, Walmart Supercenters, Sam’s Club, and Walmart Express formats, building on a robust network of 3,200 stores across all 32 Mexican states. This latest move echoes Walmart’s earlier $1.3 billion investment in 2016 for regional distribution and operational upgrades. The retailer entered the Mexican market in 1991 with a Sam’s Club in Mexico City. In a statement, Walmart said the new expansion reflects confidence in the region’s economic potential and consumer demand. Globally, Walmart continues to invest aggressively in infrastructure and store development. The company has pledged about $4.5 billion for its Canadian operations and $1.3 billion in Chile to build 70 new stores and a distribution center. In the U.S., Walmart is executing a five-year plan to build or convert more than 150 stores while modernizing 650 existing locations under its “Store of the Future” initiative. Experience Seamless Shipping with Entourage Freight Solutions Entourage Freight Solutions believes in total transparency in the shipping process. That is why we invest in tech solutions that track every shipment extensively, monitor every driver, and extract every bit of efficiency without sacrificing quality. Our state-of-the-art platform utilizes cloud-based GPS tracking to keep you informed, reroutes shipments on the fly to avoid delays, and even responds to real-time market changes to ensure you receive your shipment on time and as soon as possible. Our Services Full Truck Load (FTL): When you need a truck all to yourself. Less-Than-Truckload (LTL): Efficient solutions for multi-stop shipments or combining smaller loads to save on costs. Refrigerated Trucking: Keeping your temperature-sensitive products fresh and safe. Cross-Docking: Strategically located facilities in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, for streamlined consolidation, storage, and distribution. Ready to experience a new level of service and control in your freight shipping? Request a quote today to see how Entourage Freight Solutions can help with your freight movement and other supply chain needs.