Optimizing cash flow in the food and beverage sector with embedded finance

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In the fast-paced and often unpredictable food and beverage (F&B) industry, maintaining healthy cash flow is critical for survival and growth. A survey by the European Commission showed that cash flow problems are a leading cause of business failure throughout Europe, with one in five small and medium enterprises (SMEs) in the F&B sector facing late payments, impacting their ability to meet operational needs and invest in growth. In fact, late payments are a significant issue in many European countries, with 40% of F&B businesses reporting delays that stretch beyond 60 days. As businesses in this sector continue to face rising costs and supply chain disruptions, managing cash flow efficiently has never been more important.

This is where embedded finance comes into play. It’s not just a buzzword, it’s a game-changing approach that allows food and beverage companies to integrate financial services directly into their operations. From optimizing payments to improving liquidity and offering tailored credit products, embedded finance can help streamline cash flow, reduce friction in financial transactions, and ultimately fuel growth in the F&B sector.

Unlocking faster payments and better cash flow

The F&B industry relies heavily on a complex network of merchants, distributors, and retailers. In many cases, businesses face delayed payments, lengthy invoicing cycles, and inconsistent cash flow that makes it difficult to stay ahead of operational costs. Traditional financial solutions often fall short, especially when it comes to speed and flexibility.

Embedded finance can solve these challenges by integrating instant payment solutions directly into your operations. For example, a distributor working with a retailer can receive payments immediately after a sale, while the retailer can benefit from flexible financing options to manage cash flow. This real-time payment processing means that cash flow isn’t tied up in long invoicing cycles, reducing the strain on businesses and allowing for faster reinvestment in stock, staff, and expansion.
By offering embedded payment solutions directly on the platform where transactions occur, food and beverage businesses can cut down on delays, reduce administrative overhead, and enhance financial transparency across the entire supply chain.

Case in point: Toast

Toast is a leading all-in-one restaurant management platform offering PoS, payment processing, and business management tools for restaurants.

How Toast is leveraging embedded finance: In Q4 2024, Toast saw a 24% increase in gross payment volume (GPV), reaching USD 41.7 billion, by integrating payment solutions and financing products. This embedded finance approach helps small business owners streamline payments and get quick and easy access to the financing they need.

Tailored financing solutions for distributors and merchants

Managing working capital is always a challenge, especially for distributors and merchants who need to balance inventory with demand. Often, they rely on traditional lines of credit or loans, which can be slow to access and come with restrictive terms.

Globally, the financing gap for micro, small, and medium-sized enterprises (MSMEs) is estimated to be approximately USD 4.8 trillion, highlighting the critical need for accessible financial solutions.
Embedded finance changes this dynamic by offering tailored credit products directly integrated into business platforms. For example, a food and beverage distributor might use embedded lending solutions to access short-term credit, enabling them to purchase inventory ahead of peak seasons. Similarly, a restaurant owner might be able to access microloans directly from their point-of-sale system to smooth over cash flow gaps, allowing them to cover operational costs without having to seek external financing.

With these tools at their disposal, F&B businesses can take a more proactive approach to cash flow management for their merchants, using flexible, on-demand credit that aligns with their operational needs.

Case in point: Uber Eats

Uber Eats is a global leader in food delivery, connecting customers with local restaurants.

How Uber Eats is leveraging embedded finance: Uber Eats launched merchant lending in Mexico, offering restaurant partners access to flexible financing options through the platform. Restaurants can secure quick funding to manage cash flow, purchase inventory, and boost sales. As part of the program, they also receive up to 5% of their loan amount in marketing credits to increase visibility on the platform. The embedded finance solution helps Uber Eats support its restaurant partners while generating revenue through loan interest and marketing incentives.

Data-driven financial insights optimize cash flow management

Embedded finance also allows businesses to harness the power of data. Through advanced analytics, F&B businesses can gain deep insights into their financial health, sales trends, and cash flow patterns, enabling them to make smarter decisions about when to buy, sell, and reinvest.

For example, distributors can use embedded finance solutions to track inventory turnover in real-time and predict cash flow needs based on sales data. This means they can plan ahead, anticipate financial pressures, and avoid bottlenecks that often come from poorly managed cash flow. Similarly, retailers can access real-time sales data and make more informed decisions about when to reorder stock, how to manage credit with suppliers, and when to optimize payment schedules.

By using embedded finance tools that connect with other business systems (like point-of-sale platforms and ERP systems), F&B businesses can automate financial processes and remove the guesswork from cash flow management.

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Source: Toqio

Improved customer loyalty and revenue streams

The impact of embedded finance isn’t just about improving cash flow, it can also help enhance customer loyalty and open new revenue streams. For example, a food and beverage retailer offering embedded finance solutions, such as digital wallets or financing options, can improve customer experience by providing easy payment methods and installment options at checkout. This can drive repeat business, increase average transaction value, and ultimately boost revenue.

Moreover, distributors and wholesalers can leverage embedded finance to offer their retail partners tailored financing solutions, helping them maintain stock levels and offering promotions or discounts based on financial incentives, which drives customer retention.

Future-proofing your food and beverage business

The food and beverage industry is evolving rapidly. As consumer expectations shift and new technologies emerge, businesses that fail to adapt risk falling behind. Embedded finance provides an opportunity for F&B businesses to future-proof their operations, staying competitive and efficient in a constantly changing environment.

By embracing embedded finance, F&B companies can not only optimize their cash flow but also create an agile, flexible financial ecosystem that supports innovation, drives growth, and enhances operational efficiency.

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Source: Toqio

The opportunities are there

For businesses in the food and beverage sector, embedded finance offers an exciting opportunity to optimize cash flow, streamline financial processes, and create a more resilient business model. By integrating financial solutions directly into operations, companies can improve payment speeds, access flexible credit, gain valuable financial insights, and offer better customer experiences. The result is a stronger bottom line, enhanced competitiveness, and the ability to thrive in an increasingly complex financial landscape.

If you’re in the food and beverage sector, the question isn’t whether to embrace embedded finance, it’s how soon you can get started. The future of cash flow management is here, and it’s powered by embedded finance.

Toqio offers a comprehensive platform that enables businesses to create tailored embedded financial solutions quickly and safely. With Toqio, you can integrate financial services directly into your operations, unlocking new revenue streams and improving customer loyalty. Our solution is already empowering global enterprises with annual revenues over GBP 100 million and networks of 10,000+ merchants, unlocking significant growth potential. Explore how Toqio can help your business optimize cash flow and stay competitive in today’s dynamic market.

Toqio case study: A major European brewery

About our client: A major European beverage company with an annual turnover of EUR 1.5 billion that distributes beer through 190,000 SMEs.

How they leverage embedded finance through Toqio: Toqio proposed a unified, branded banking solution that provides their merchant establishments with a card reader, passing over 1% of revenue back to them. Our solution replaces their outdated “branded bars” strategy which had lost luster among clientele, leading to lost opportunities and merchant churn.

Each establishment now gets its own linked bank account for better cash flow management. The brewery also offers flexible business financing through an alternative lender in Toqio’s multi-provider marketplace. The company is on track for an increase in top-line revenue by 30% over the next few years, leveraging both existing sales and new revenue streams.