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PACK INNOTECH CONFERENCE Thursday 23 rd May 2013 Successful Implementation of Shelf Ready Packaging into the Global Retail Environment Ralph Moyle Packaging Solutions with Ralph Moyle Pty. Ltd. // National President of the Australian Institute of Packaging.

Shelf-Ready Packaging into the Global Retail Environment

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Page 1: Shelf-Ready Packaging into the Global Retail Environment

PACK INNOTECH CONFERENCE Thursday 23rd May 2013

Successful Implementation of Shelf Ready Packaging into the Global Retail Environment

Ralph Moyle Packaging Solutions with Ralph Moyle Pty. Ltd. // National President of the Australian Institute of

Packaging.

Page 2: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

• Global Supermarket growth drives the advances in Retail Ready Packaging.

• Development of supermarkets in China, India, Brazil, Africa and South America.

• Cost focus in USA, Australia.

Page 3: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

• UK and European start in 2004.

• Focus on Food FMCG.

• Australia start in 2005.

• USA (Walmart and Costco) start in 2010.

• Retailer driven.

• Asia, India, now!!!!

Page 4: Shelf-Ready Packaging into the Global Retail Environment

• Retail Ready Packaging Materials.

• Corrugated board is about 75% the material of choice.

• Flute size has reduced.

• Printing standard has leaped into high quality, multi-coloured presentation.

• External paper is often white.

Page 5: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG • The roll-out of Retail Ready Packaging (RRP) has been a key

requirement for Australian retailers since 2004 and prior to that in Europe.

• 2005. AFGC Supply Chain subgroup starts a group of packaging experts to adapt the ECR guidelines into a Retail Ready Toolkit.

• 2006 through 2008. Woolworths pursue the transition aggressively. Coles involved but not as aggressive. The concept gains increased traction as retailers focus on improved operating efficiencies as part of a broader cost focus.

• 2009 – 2010. Coles replace Woolworths as the drivers of SRP into their stores.

• 2009 – 2010. AFGC refines the Retail Ready Toolkit with adaptions towards retailer functionality.

• 2009 – 2010. Coles issued their own SFP guidelines to stress their requirements

• 2011. AFGC interaction develops to include Environmental implications of SRP.

• 2011. Coles impose deadlines on FMCG to implement or lose shelf position.

Page 6: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

• The core of Retail Ready Packaging is waste and cost reduction.

• The Global supply chain for FMCG goods is long and aggressive.

• Safe transport of the secondary package has not changed.

• Additional challenge to look good on shelf, attract a buyer and complement the primary pack.

Page 7: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

• What is successful implementation of shelf ready packaging?

• How do you go about achieving it?

Page 8: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

• SRP impacts on all parts of the supply chain.

• SRP is a basic requirement for doing business in the Global retail environment.

• Where and what is success?

• How do you measure it?

Page 9: Shelf-Ready Packaging into the Global Retail Environment
Page 10: Shelf-Ready Packaging into the Global Retail Environment

Consumers

Environmental

Financial

Packaging

Supply Chain

Retailers

SRP success is the intersection of all six elements.

Successful SRP Implementations in FMCG

Page 11: Shelf-Ready Packaging into the Global Retail Environment

SRP / SFP / RRP

• Shelf Ready Packaging. • Shelf Friendly Packaging. • Retail Ready Packaging. • Replenishment Ready. • Display Ready.

– This is not limited to changing cartons. » Pre-prepared end of aisle displays (promotions). » Quarter size pallets of soft drinks wheeled directly into store

(Aldi) » Angled baskets on mobile trolleys (Bread) » Trolleys prepacked from producer (Milk)

– All have a primary purpose "Improve in-store efficiency through increased speed

of replenishment leading to better on-shelf availability and increased sales."

Page 12: Shelf-Ready Packaging into the Global Retail Environment

Components Procurement Manufacture Transport Warehouse Transport Retailer

•New Artwork •Packaging Design •Quality Assurance •Packaging Costs •Die & Setup Costs

•Demand Forecast •Run-size •Transition •Unit Cost

•Site Capability •Production Planning •Capacity / Utilisation •Run-Rates •Pallet Configuration •3rd Party Contracts •Capital Investment •Demand Increase

•Load Capacity •Logistics Cost •Transport Contracts

•Warehouse Capacity •Pallet Configuration •Carton Pick % •Case Count •Warehouse Contracts •Warehousing Cost

•Load Capacity •Price Models •Logistics Cost •Transport Contracts

•Reduced labour costs (customer) •Product Facings •Product Distribution •Case Weight •Shelf Depth •Sales Orders Process •OOS Management •Waste •Rotation

SRP - S SRP Implementations in Global FMCG Business

Page 13: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCGe

• Core (Non Financial) Measures of Successful SRP.

– Easy to Identify.

– Easy to Open.

– Easy to Shelf.

– Easy to Shop.

– Easy to Dispose / Recycle.

Page 14: Shelf-Ready Packaging into the Global Retail Environment
Page 15: Shelf-Ready Packaging into the Global Retail Environment

RRP Misconceptions

Case cutting to create off-shelf

displays

Store colleagues improvise to create

their own RRP solutions

Case stability and integrity for stacking as soon

as it is cut for display

Products on j-hooks or peg

boards are amongst most

difficult to replenish

UN - Successful SRP Implementations in Global FMCG.

Slide courtesy of IGD

Page 16: Shelf-Ready Packaging into the Global Retail Environment
Page 17: Shelf-Ready Packaging into the Global Retail Environment
Page 18: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCGhe

• Shape and Size.

• The retailers have two agendas which are combined into what we call SRP.

• The first is time efficiency gains in store by easy open and placing the entire contents in one move.

• The second is having the carton size reflect the rate of sale of the product. That is 1 week’s sale equals one carton. This means many of the cartons will be reduced in size.

• Ideally, the depth of the carton shall be half the depth of the shelf, so two cartons can fit.

• The height of carton must allow easy access and replacement by the consumer when positioned on shelf.

• The design will have to be approved by your retailer.

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Page 20: Shelf-Ready Packaging into the Global Retail Environment
Page 21: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

• What is successful implementation of shelf ready packaging?

• How do you go about achieving it?

Page 22: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Successful SRP Implementation

Page 23: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Successful SRP Implementation

Key Category to Change

Page 24: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

• Benefits

– market leader

– rewards for first-to-market.

– drives labour savings at the customer .

– facilitates sales negotiation - ability to control dialogue

– provides leverage at total category

– builds partnership with customers and buyers

– improves “on-shelf” product presentation and availability

– increases distribution and space preference

• Risks

– profitability - inability to achieve a sales benefit whilst incurring the a cost

– capacity, capability and efficiency for production processes

– scale of change – ability to achieve

– becomes mandatory / threat

– no reward for “followers”

– impact on distribution and wholesalers

– sustainability / packaging covenant

Page 25: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Successful SRP Implementation.

Cross functional Team.

Key Category to change

Page 26: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

• Select the Project Team. • Project Leader.

• Marketing.

• Category Development

• Sales.

• Operations

• Procurement

• Demand Planning

• Data Management

Fixed thinkers need not apply.

Page 27: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Successful SRP Implementation

Scope the Opportunity And Risk.

Build a cross Functional team

Key Category To Change

Page 28: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

– Scope the Opportunity & Risk

• What is the reason the project is being undertaken?

• Define the unique selling point?

• Is this package part of a range of products?

• How is this package to be used?

• Where is this package to be stored?

• Does this package have to meet any safety standards?

• Are there any eco-friendly needs for this package?

Page 29: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Successful SRP Implementation

Scope the Opportunity & Risk

Build a Cross functional

team

Key category To Change

Engage Packaging Supplier

Page 30: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Select the Packaging Supplier. • The scope document will lead you to a short

list of Packaging Suppliers. • Selection of Primary Package material is a key

but unique selling point is a major factor. • Shared history, understanding of brand

strategy, consistent innovation, consistent economic supply.

• High risk development may require JV approach.

Page 31: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Successful SRP Implementation

Scope the Opportunity & Risk

Build a Cross Functional team

Key Category To Change

Packaging / Design Expert

Engage Packaging Supplier

Page 32: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

–Select the Packaging Expert / Designer.

• Key selection who must know both Brand Owner and Packaging Supplier.

• Knowledge of the focus category.

• Knowledge of the brand.

Page 33: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Successful SRP Implementation

Scope the Opportunity & Risk

Build a Cross Functional team

Key Category To Change

Packaging / design Expert

Test, Educate, Trial, Implement Engage the Packaging

Supplier

Page 34: Shelf-Ready Packaging into the Global Retail Environment

34

Successful SRP Implementations in Global FMCG

Observations at Store Audit There were some good examples of suppliers leveraging SFP to communicate branding There were many bad examples where SFP offered suppliers little branding benefit The more effective examples used

colour to differentiate variants consistent formats and fonts across their ranges neat perforations Uncluttered communications

Some good examples of effective SFP observed were Create a brand block presence in a very cluttered category Clever design that maximises branding across SFP’s Reinforced the logo or brand theme. Clear branding as well as usage suggestion icons

Some bad examples of SFP were Just bar code showing Many examples of no branding, plain cardboard Many examples of adhesive tap issues on short end Inconsistent heights across Sku’s within the same range

No examples sighted where a supplier had used SFP to support a promo campaign

Page 35: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Question: Is Shelf Ready a package or a Point of Sale item? Answer: Both.

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Page 39: Shelf-Ready Packaging into the Global Retail Environment

Successful SRP Implementations in Global FMCG

Connect with your Consumer. • Find a front lip shape that you can

call your own. Take a distinctive shape of a core aspect of your logo or primary pack.

• Colours must be complementary. • Eye tracking behavioural research.

Page 40: Shelf-Ready Packaging into the Global Retail Environment
Page 41: Shelf-Ready Packaging into the Global Retail Environment

•Useful Tools. • Design and Project Guidance: AFGC / ECRA Retail Ready Toolkit works.

• External Agencies: Packaging Institutes in your country provide a great network.

• What do the Retailers look for in SRP?:

• Retailer’s own SFP Guidelines. Go to the Buyers’ Ready Reckoner for guidance.

• Take your team into store.

• Work with your own merchandisers in store.

• Must understand how the store fillers have to cope.

• Adhesive Tape.

• If you use tape on the bottom of cartons, get rid of it. It will prevent your SRP design from being used and looking good.

Successful SRP Implementations in Global FMCG

Page 42: Shelf-Ready Packaging into the Global Retail Environment
Page 43: Shelf-Ready Packaging into the Global Retail Environment

Key Take Home Points.

Know your packaging. Work with your supplier

Keep your front message simple – KISS.

SRP must compliment the primary pack.

Know your supplier options!

Know your consumers needs!

Work in store – often.

Find the knowledge. Get support.

Page 44: Shelf-Ready Packaging into the Global Retail Environment

Thank you Ralph Moyle Packaging Solutions with Ralph Moyle Pty.Ltd. National President – Australian Institute of Packaging.

Page 45: Shelf-Ready Packaging into the Global Retail Environment

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