How a Consumer Packaged Goods Company Faced Supply-Chain Issues and Mitigated the Crisis?

A UK-based consumer packaged goods company sought to change its product packaging to paper-based and fell into the complexity of the market mechanism. The organization has a huge product line in food & beverages and is quite successful in its arena. Keeping the environment in view and global trends, the company changed its product packaging to paper. The company’s supply chain was hugely affected owing to raw material supply fluctuation needed for manufacturing paper packaging. The company failed at assessing its situation at hand and the management sought external help. Research Nester was called in to evaluate the crisis & provide apt strategies.

An overview:

The Consumer Packaged Goods Company is a food and beverage company that has interests in the manufacturing, marketing, and distribution of grain-based snacks, food, beverages, and other products.

The firm had a large product line and was successful in its sector. keeping up with the market dynamics & changing environmental conditions the company changed its packing from plastic-based to paper-based. This change did not give any benefit to the company as they have hoped, but led to the company’s downfall.

There was volatility in the market for raw materials required for manufacturing paper packing.

Paper packaging, irrespective of the quality, was vulnerable to weather conditions, and many instances were reported by customers of the beverages going bad.

Owing to these conditions the company failed to meet its supply-demand situation and faced economic downfall.

Failing to reprimand the crisis at hand internally, the management hired Research Nester, to analyze the situation and provide the correct solution.

The Story

The food, snack, and beverage corporation headquartered in London, was established in the 1980s. Best known for its beverage line, the company’s products are enjoyed by consumers in more than 200 countries and territories around the world. The firm is up to date with the latest trends in the market.

As per the company’s vision packaging plays a vital role in safely delivering their products to consumers. Their motto was to develop packaging design respective to several critical criteria, which included environmental sustainability, food safety regulations, maintaining the quality of the product, affordability, and consumer preference. They sought to make their packaging design 100% recyclable, compostable, biodegradable, or reusable by 2025. As the company transitioned from plastic to paper, it faced many shortcomings that the company’s R&D failed to assess, like erratic raw material supply issues for paper packaging and quality assurance concerning paper packaging, as even the paper quality was good but it was still vulnerable to parameters such as temperature, humidity. Unable to handle the situation within the firm, the management hired Research Nester to analyze the situation, conduct a detailed supply & demand analysis and come up with a strategy to solve the crisis.

The Solution:

Research Nester analysts after assessing the problems, came up to the conclusion that the firm lacked in-house manufacturing of packaging. Even though paper packing is beneficial to the environment, the company is not able to comply with its supply due to this. RNPL analysts suggested the following points that would help the firm resolve this situation:

Investments to be done in In-house manufacturing of packing.
Switch paper packing with aseptic packing, which is high in demand owing to several factors:
1. Polyaminate is used in aseptic packaging, which decreases the exchange of oxygen with the environment while working as a barrier against light, two elements that, if they both came in contact with the product, might negatively alter it.
2. Sterilization is done through high temperatures right after packing, making it safe from microorganisms of any sort, plus it’s FDA-approved. The aseptic packaging market is an ongoing rage trend among consumers and the company would benefit from it, as it would provide good customer reviews as it is a sustainable mode of packaging.
The firm should build a positive value chain for sustainable packaging which would comply with their supply-chain management.
Evolve their portfolio of convenient food and beverages by providing positive choices for consumers with innovative packaging technologies and business models
The company should follow a step-by-step procedure in achieving its target for recycled packing rather than investing in the whole product line at the same time. This would give the company a preview of its profits and loss situation.

Results

The company integrated the suggestions of RNPL analysts. Now, they have adopted a step-by-step approach and advanced in their goals through cross-industry and private and public partnerships. Furthermore, they have invested in in-house manufacturing and resolved their supply chain issue. In 2022, the company earned a net revenue of USD 86 billion which is higher than the USD 50 billion mark in 2020. The company not only overcame the crisis but gained sustainability for its long-term goals and was able to attain a better market position.

How a Consumer Packaged Goods Company Faced Supply-Chain Issues and Mitigated the Crisis?

An overview:

The Story

The Solution:

Results

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