modern packaging trends retail & supply chain management

1India Packaging Show 2006India Packaging Show 2006

Modern Packaging Trends in

Retail & Supply Chain Management

Pradeep Sardana

PepsiCo India


What is Packaging?

Techno-economic function aimed at minimizing cost

of delivery while driving sales & profits

Art, science & technology of preparing goods

for Market and sale

Means of - Product handling- Product integrity- Brand presentation


Trends impacting Packaging•Consumer choice•Environmental pressures

–Recycling –Statutory Declarations

•Technology improvements–Materials–Security features–Processes

•Retail needs–Unique SKUs,Bundling–Bar coding–RFID

Consumer

Retail

Packaging

Supply Chain

Consumer

Retail

Packaging

Supply Chain


`

Consumer

Retail

Packaging

Supply Chain

`

Consumer

Retail

Packaging

Supply Chain


Consumer Changing demographics

− Younger earning population− Brand conscious− 54% below 25 years− 81% population below 45 years− More acceptance of new concepts− Changing aspirations

More nuclear families with dual income─ 75 million households, called ‘consuming classes’ with annual income

between 50000 to 3 lacs─ 1 Million Households in creamy layer with income at par with International─ Higher disposable income and easier financing options─ Convenience overriding price consideration

Lifestyle values− Global lifestyle: media exposure and overseas travel− Look at me (LAM) the most important criteria


`

Consumer

Retail

Packaging

Supply Chain

`

Consumer

Retail

Packaging

Supply Chain


Macro environmentGlobalisation

− Entry of leading Indian & global retail brands− Retail format consolidation/customization in India

Financial institutions upbeat on the sector− Several Indian & international FIs setting up specialized

division for retail funding− Easy availability of credit− Investments in retail infrastructure

Government support– Infrastructure development– Policies favouring growth– Tax and duty structure rationalization (VAT)– FDI policy


Use of environment friendly materials • Build industry standards • Maharashtra govt bans poly bags < 50 microns • Global retailers demanding Non –PVC shrink

sleeves

Promote recycling strategiesForced standards by customers/govt agencies and

organized retailersEnsure Product security

Social Responsibility


`

Consumer

Retail

Packaging

Supply Chain

`

Consumer

Retail

Packaging

Supply Chain


– India moving at a fast pace towards consumer driven economy

– Demand for competitive goods & services by Indian consumers like global counterparts

– Organized retail can be a major driver of economy– Can attract large FDI and FII investments

Industry driven

Distributor controls

Consumer driven

Retailer controls

Consumer dictates

US

UK

Germany

Japan

HK

Singapore

Taiwan

Indonesia

Philippines

China

India

Retail Power

Indian Retail Landscape


Indian Retail Landscape

– Total retail market: Rs 1,000,000 crore ($235 billion)

– 12 million + outlets, only 4% > 500 sq.ft

– Modern Trade: Rs 30,000 crore ($7 billion) with a Share of : 3%

– Modern trade by 2010 : 10% of retail market – 100,000 Cr


`

Consumer

Retail

Packaging

Supply Chain

`

Consumer

Retail

Packaging

Supply Chain


− High growth rate of modern trade – 30% plus− Share of organized retail 15%+ for top 10 markets

− Share of modern trade as high as 60-70% for packaged food categories for top 10 mkts

− Supply chain clusters close to top 10 mkts

− Retail format consolidation in India

− VAT & supply chain implications

− Local availability of cheap technology resources

Supply Chain


`

Consumer

Retail

Packaging

Supply Chain

`

Consumer

Retail

Packaging

Supply Chain


– Convenience– Buying decisions within fraction of a second– Modern trade ambience offers “ Touch & Feel ” – Multipacks - Value creator to all stake holders– Addresses the usage cycle demands:

• Easy to handle • Easy to store • Easy to consume • Easy to dispose

• Packaging A Key differentiator

Packaging & Consumers


Packaging & Retail

• Developing multi pick-up & drive POP with bundled packs

• Retail shelf friendly


• Built-in POP though packaging • Create billboards using pack orientation • Run promotions on packaging • Electronic advertising budgets: POP

offers alternate media

Packaging as a Marketing Tool


Packaging as a Supply Chain tool

Laminate, Rigids,Cartons . Retail pack Dist. Pack

Pallet Load

15 - 24 kg2– 4 kg

1000 kg

Organized retail route

Integrated Pack Model

In – plant storage only Primary & secondary routes

Retailer pack Operation

Primary route Secondary route Consumer packTactical

Secondary routeXPromotions Strategic

In – plant storage only Primary & secondary routes

Retailer pack Operation

Primary route Secondary route Consumer packTactical

Secondary routeXPromotions Strategic

- GS – 1 standards (bar codes)- RFID tags for real-time stock replenishments- Commercial Security offerings

• Counterfeit & pilferage• Online supply chain visibility across the chain • Pack safety for the consumer

Palletization – cost vs value creatorKey supply chain cost optimizer through an Integrated supply chain approach• Drive standards – pallets/trucks

• Pallet pooling services


Palletization Roadmap

Pallet • Pallet standardization• Pallet pooling • Pallet tracking & visibility

Trucks/ Container

• Side Vs Back Open • Platform quality & bed height • Utilization review• Terminal automations

• Fork lift/hand trolleys• Dock levelers/scissor lifts• Storage systems • Logistics Terminal automations

BOM• Focus on 80/20• Utilization levels • Optimize the secondary

Turnarounds

Handling facilities

Logistics Model


Journey to Organized Retail

LSP group level

Retail group level

Mfg group level

Retail pack level

Primary pack level

Tubes Flexibles

Rigids

Taping Banding Sleeves

Strapping

Hi – Cone

Stretch sleeves Stretch banders

Shrink Carton

Blister Packs


Thank You!

modern packaging trends retail & supply chain management

Documents