By Felicity Kelly, Head of Sustainability at Bunzl Australia & New Zealand
Innovative packaging and distribution strategies are rapidly becoming the new normal. Leveraging these new technologies enables a fully optimized supply chain, which helps streamline logistics operations and enhance overall efficiency. Using these new technologies can increase overall productivity while helping to drive growth and take advantage of new opportunities.
Need for innovative packaging and distribution strategies
Making the supply chain as efficient as possible is a necessity in this marketplace and is a key way to meet demanding customer expectations while maintaining or increasing market share. Fast-moving consumer goods have particularly high turnover rates and when allied with high demand it becomes necessary to optimize supply chains where possible. However, balancing efficient supply and customer expectations, while maximising productivity can be difficult.
Having total control over your supply chain and working with reliable suppliers and partners is how to ensure an efficient and optimized process. This optimization allows companies to react in a more efficient way to market dynamics including seasonal demands and evolving customer preferences, and can reduce lead times, enhance inventory management, and improve forecasting accuracy for required stock levels.
Sustainability is key for meeting consumer expectations in the FMCG market and is led by customer demand. There is a fast-growing consumer preference for products that are compostable and recyclable. Incorporating recyclable products into a portfolio can not only help companies meet their social responsibility goals and comply with regulatory requirements but also lead to increased customer satisfaction and a higher average spend.
In the “new normal” there is an increasing need for innovative packaging that also meets sustainability expectations, and to adapt and thrive companies need to reimagine their methods:
- E-commerce: The massive shift towards online shopping has completely reimagined the e-commerce landscape as consumers opt for home delivery for added convenience. This boom means innovative packaging and distribution strategies are required to ensure products are safely shipped, protected from damage in transit, and arrive quickly.
- Evolving consumer preferences: The growing demand for recyclable packaging as people become more conscious of the environment means FMCG companies must utilize recyclable or compostable materials in their packaging to stay competitive. Implementing recycling programs is also important to attract and retain customers.
- Supply chain disruptions: Diversifying distribution strategies can help mitigate supply chain challenges by enabling FMCG businesses to quickly adjust to changes and ensure a smooth flow of goods.
- Customer experience: FMCG is a competitive market and innovative packaging can be a differentiating factor to create a positive brand experience and foster brand loyalty.
Understanding FMCG supply chain challenges
The new normal for FMCG companies involves responding rapidly to volatile distribution channels, fast-changing consumer preferences, and increased demand for more sustainable and appealing packaging options. These challenges are being overcome by diversification of supply chains and leveraging new technology while implementing recyclable packaging solutions. This has led to companies exploring alternative materials and suppliers, modifying production processes, and greatly improving their supply chain inventory management. This increase in complexity requires continual evaluation to adapt to market demands. The key challenges are driven by the boom in online shopping, customer demands for appealing and recyclable packaging, inventory management, and speedy deliveries.
Optimize FMCG supply chains by utilizing innovative packaging solutions
Consumers today are much more interested in sustainability and environmental credentials than previous generations. This has driven demand for innovative and recyclable packaging solutions. but sustainability is not the only challenge for FMCG companies. In this highly competitive market, packaging has to also stand out on the shelves to attract consumers. Modern consumers want visually appealing packaging that is compostable or recyclable and conveys the values of the brand. Smart packaging builds on this demand by incorporating new technologies such as RFID tags to improve product safety and inventory management. The use of modern packaging materials such as plant-based plastics also helps to reduce waste and is especially attractive to many consumers.
Streamlining FMCG supply chain strategy
Effective distribution strategies are key when it comes to streamlining supply chains. The use of attractive packaging can also enhance product appeal and capture customer attention. Recyclable or compostable packaging should be part of any winning distribution strategy as this will reduce carbon footprint, can reduce costs, and also increase business by attracting consumers interested in sustainability. Technology and automation can also play a crucial role in streamlining distribution strategies in the FMCG market by allowing companies to retain or even increase their customer base in a highly competitive marketplace.
Conclusion
The new norm in FMCG supply chains is to embrace innovative packaging and modern distribution processes while diversifying supply to avoid potentially volatile transit situations and bottle-necking distribution. This includes embracing attractive packaging that appeals to environmentally conscious consumers while streamlining the logistic operation and entertaining collaborative supply chain partnerships. These strategies and processes enhance the efficiency of supply chain operations while meeting evolving consumer demands and potentially driving business growth. There are challenges to be faced, especially in terms of initial investment and supply chain disruption, but these challenges can be overcome by utilizing technology and adopting recyclable processes.
Felicity Kelly is the Head of Sustainability at Bunzl Australia & New Zealand. She assists organizations in enhancing their sustainability performance and reputation, as well as managing their entire value chain through stakeholder engagement, communication, risk management, problem-solving, strategy development, and execution.
Felicity holds a Master’s degree in Corporate Environmental and Sustainability Management from Monash University. She has extensive experience working across various sectors, primarily in Fast-Moving Consumer Goods (FMCG) and logistics
