ecr europe forum '08. shelf-ready packaging: the balancing act
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Shelf-Ready Packaging: the Balancing ActBreakout 4.4 ECR Forum
Berlin Thursday 29 May
The SRP balancing
act
SRP
Social Econo-mic
Environ -mental
Structure09.30 Opening Xavier Hua, Carrefour, and
Bernard Fradin, Kraft Europe
09.40 Social Pillar ECR Baltic
09.50 Economic Pillar ECR Italy
10.15 Environment Pillar ECR UK
10.25 Questions to panel of speakers
10.45 Refreshments
Guidelines for a collaborative approach to SRP, based on a joint
business case assessment
Testing the business case approach for the hair and body
wash category
Reminder:
What has ECR Europe delivered so far?
July 2007
SRP
business case pilotJanuary 2007
SRP Blue book
Several tools were developed to support the business case methodology and collaborative engagements
Business Case
MediumLow
Shopper Benefit Opportunity
Volu
me
Medium HighC
ase
Cou
nt (o
r Fa
cing
s) 20%
50%
10%
10%
10%
Illustrative
Focus Area
Store Channel / Format / Size
High Level Prioritisation
Business Case Evaluation
SRP Solution Assessment **
Store Audit & Checklists
** Adapted from ECR UK RRP Tool
Solution Assessment & In-Store Audit
Use of SRP is spreading across major retailers across Europe
Estimate of sales in SRP
Baltics 5-10 % all categories
France20% private labels 5% national brands
Germany37% all categories42 % food22 % non-food
Netherlands < 10% of all SKU
Spain 20 -
35 %
UK
Tesco: 22,000 lines Asda: 23,000 mainly food lines Sainsbury's: All ambient, food, grocery and chilled categories
Numbers not available for other markets via ECR organisations
Currently SRP still gives rise to some issues –
sustainability can only be
attained through a balanced approach
☺ SRP can… SRP can also…
Social
•
Make shelf replenishment and shopping easier
•
Be perceived as labour reduction policy•
Make shopping more difficult if not well designed
Economic
•
Improve shop floor operations•
Improve sales•
Add costs to supply chain•
Make shop floor operations more difficult if no proper design and training of staff
•
Destabilise pallet loads if not strong enough
Environmental
•
Reduce need for primary packaging as it stabilises the product
•
Lead to higher perceived volumes of packaging on shelf
•
Add packaging in the supply chain
Structure09.30 Opening Xavier Hua, Carrefour, and
Bernard Fradin, Kraft Europe
09.40 Social Pillar ECR Baltic
09.50 Economic Pillar ECR Italy
10.15 Environment Pillar ECR UK
10.25 Questions to panel of speakers
10.45 Refreshments
10
Structure09.30 Opening Xavier Hua, Carrefour, and
Bernard Fradin, Kraft Europe
09.40 Social Pillar ECR Baltic
09.50 Economic Pillar ECR Italy
10.15 Environment Pillar ECR UK
10.25 Questions to panel of speakers
10.45 Refreshments
11
The Social Effect of SRP
Anna Zolotarjova, Supply Chain & Logistics Development Manager, Rimi
Baltic
12
For new EU member states, SRP is largely being driven by labour market conditions
–
GDP year-on-year growth in 2007 up to 11% in Latvia
–
Lowest level of unemployment 3.2% in Lithuania
–
Negative migration index up to -0.3% in Estonia
–
Population decline up to -0.65% in Latvia
Labour market drivers of SRP vary across Europe
13
SRP helps address the social challenge faced in store
•
Stores are regularly
short of planned employees by ≥6%,
•
Store staff
turnover is reaching critical rates
•
Number of overtime hours in RIMI stores exceeded
500,000 in 2007
•
87% of employees
doing the work in store are women
•
Hard working conditions is a top reason for store
employees to leave
Unemployment rate fallsUnemployed as % of workforce
4
6
8
10
12
14
16
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Estonia Latvia Lithuania
SRP is an imperative to improve working conditions in grocery retail
14
SRP’s
social role is not limited to store employees
SRP helps to improve the shopping experience
–
Consumers
demand for convenience, choice and availability
–
Sucessful SRP solutions
increase brand visibility and add structure to the shelf, thus making it easier for shoppers to navigate
–
SRP is a solution to secure on shelf availability
in the prevailing labour market conditions
15
RIMI Baltic is making it easier for staff and shoppers through SRP
By collaborating•
Developing Category SRP Roadmaps and fit-for-purpose solutions together through in-store SRP training sessions for suppliers facilitated by IGD
•
Carefully evaluating category needs for SRP–
priorities
–
main issues
–
best practice solutions
•
Showing example with private lable products
•
Sharing retailer’s understanding and outlining main priorities through SRP manual
16
RIMI Baltic is making it easier for staff and shoppers through SRP
By using SRP in stores
•
Educating store employees on how to recognise and treat SRP
•
Focusing common efforts of–
Category Management
–
Operations
–
Supply Chain
on in-store implementation of SRP
17
RIMI Baltic is making it easier for staff and shoppers through SRP
By using SRP in stores
•
Educating store employees on how to recognise and treat SRP
•
Focusing common efforts of–
Category Management
–
Operations
–
Supply Chain
on in-store implementation of SRP
18
Structure09.30 Opening Xavier Hua, Carrefour, and
Bernard Fradin, Kraft Europe
09.40 Social Pillar ECR Baltic
09.50 Economic Pillar ECR Italy
10.15 Environment Pillar ECR UK
10.25 Questions to panel of speakers
10.45 Refreshments
ADVISORY
Berlin, 29th MAY 2008
“The Italian Scenario”
©
2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
20© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
Agenda
• Italian
context
• Italian
pilots
• A direct experience: selex
& kraft
• Our
first results
21© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
Italian
Project objectives
•
Diffuse the SRP experiences deriving from ECR Europe model
•
Define a collaborative process for the development of SRP solutions
•
Identify tools in order to support SRP solutions’ development
22© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
ECR Italy SRP Project Team
XForma
23© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
SRP Development
in Italy
ECR model
diffusion
TheoryTheory DeveDeve-- lopmentlopment TestTestResearchResearch DiffusionDiffusion
State of the Art
Italianpeculiarities
Business Case
SRP implementation
24© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
SRP Italian
Survey
2007: starting
point
Long-List möglicher Fondsgesellschaften22 Lack of common standardsLack of common standards
and supply chain costs as main SRP barriers
Long-List möglicher Fondsgesellschaften33 Easy to identify and to shelfEasy to identify and to shelf
as most important functional SRP requisites
44 In-store efficiency / better on shelf availability as SRP benefits:
more on the Retail sidemore on the Retail side……
Long-List möglicher Fondsgesellschaften11 LimitedLimited
diffusiondiffusion
of SRP solutions
25© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
Long-List möglicher Fondsgesellschaften22 PotentiaPotential
common common standardsstandards
difficultdifficult
toto
applyapply
Long-List möglicher Fondsgesellschaften33 Adoption of 1 or 2 prioritiesAdoption of 1 or 2 priorities
in functional requisites
44 Better brand recognition: significant SRPbenefit
also on the Manufacturer sidealso on the Manufacturer side……
Long-List möglicher Fondsgesellschaften11 Confirmed trendConfirmed trend
of SRP expansion
SRP Italian
Survey
2008: one year
after
26© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
Italian
peculiarities
in the ECR Europe SRP Model
••
Overall adherenceOverall adherence
to the ECR Europe model
••
Collaborative approach as essentialCollaborative approach as essential: SRP must not be a retailer’s push only…
••
Waste managementWaste management
as issue but still worthy effortworthy effort: - Limit different materials in the same SRP solution
- Adopt solutions in which materials can be easily separated
- Reduce primary package where possible
27© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
ECR Italy SRP Pilots
Time
Pilo
t im
pact
M 1 M 2 M 3 M 4 M 5 M 6
New concept development
Already on going SRP solutions
Implementation of solutions already tested abroad
SRP complete solution developed in Italy
…
28© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
ECR Italy SRP PilotsSRP Type
Channel
Category
Pilot impact
Auchan
-
CocaColaCarrefour
-
P&GEsselunga
-
Mars
ItaliaSelex
-
Kraft
Mono
MultiHigh Low
Shelf
tray
Ready
to
sell pallet
Beverage
Grocery
non food
Grocery
food
29© 2008 KPMG Advisory S.p.A., an Italian limited liability share capital company and a member firm of the KPMG network
of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.Efficient Consumer ResponseECR Ita liaEfficient Consumer ResponseECR Ita lia
A direct experience: SELEX & KRAFT a successful
balanced case
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Shelf Ready PackagingThe Balancing ActA successful experience
Economic PillarBerlin, May 29th
2008
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31
THE BALANCING ACT
Develop a WIN WIN WIN solution in order to understand
how to build and maintain a balance among the overall
involved factors
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32
AGENDA
Kraft and Selex
business
Category & Shelf
analyses
Project milestones
Test
results
Next
steps
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33
WHO IS KRAFT IN ITALY?
ti 2006
Helping People Around the World Eat and Live Better
Turnover €
626MM
990 people
3 plants
More than 12 brands
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34
AND... WHO IS SELEX ?
2007 Turnover €
7,400 MM;
Market share 7.7%;
18 associated groups;
Associated firm leading the projectis Ali in north east Italy
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35
WHY MAYONNAISE CATEGORY?
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36
WHY MAYONNAISE CATEGORY?Low category visibility and appeal in the aisleLimited / No presence of SRP for mayonnaise jars
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37
30”for 15
glass
jars
WHY MAYONNAISE CATEGORY?Long replenishment time / High risk of breakagesDifficult to handle in the store, especially 500ml jar
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38
WHY MAYONNAISE CATEGORY?Difficult identification of brands / variants on shelf
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39
WHY MAYONNAISE CATEGORY?
Risk of sales loss when the shelf is half emptied
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40
SITUATION ANALYSIS – CURRENT TRAY
Only
10% of clients
use current
tray
on shelf
# Jars 15# Facings 3 x 5Dimensions 26 x 44 cm
Logistic info on pack2 materials: carton + plastic
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41
Reasons
of not usage
of current
tray
SITUATION ANALYSES – CURRENT TRAY
Difficult handling
28%Low appeal / good
looking
44%
Carton
cover brand labels
28%
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42
PROJECT OBJECTIVES
Increase category/brand turn-overImprove category image & visibilityIncrease shelf density
Use SRP as POScommunication vehicle
Effectiveness & efficiencyof packaging cost
Improve identificationouter case in“back
store”
Reduce replenishment time
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43
STRUCTURE OF THE PROJECT
LABELS’
VISIBILITY
100% CARTON(one material)
NEW CARTON MATERIAL
COLOURED
GRAPHIC
NO(Plastic ensures
jars
transportation)
٧
NEW SRPJar
500ml
AREAS OF IMPROVEMENT
٧٧
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44
CONTROLLED STORE TEST
Alì
Point of sales (Selex)
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45
STRUCTURE OF THE PROJECTThree different store-formats
Supermarkets (1000 sm);Large supermarkets (1600 sm);Hypermarkets (2800 sm);
Weekly monitoring of dataSalesReplenishment timing#
of jars / facing on shelf
Shelf density
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46
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47
QUALITATIVE & QUANTITATIVE RESULTS
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48
SHOPPER PERSPECTIVE - QUALITATIVE
In-store
questionnaire
resultsBrand/Category more visible
72%
It
contributes
to make
shelf
tidier 68%
I Like
it!
65%
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49
TRADE EMPLOYEE PERSPECTIVE
Reduces
breackages
risk
Easier
to identify Easier
to replenish
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50
TRADE EMPLOYEE PERSPECTIVE
Quantitative results
-
timing
Pre
sorting
identification -80%
Back store
identification -45%
Replenishment -82%
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51
MAIN RESULTS - QUANTITATIVE
Project resulted economically positive!!!!
Sales Turnover +4%
Net impact PositivePackaging costs
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52
Evaluation
of further
improvements
on SRP
Roll-out
on national
scale
Opportunity
of SRP implementation
on:other sizes (250ml jar) & variants (Legeresse...)
Use SRP to communicate new news to consumer
NEXT STEPS
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53
A
WIN WIN
WINsolution
for all !!!
KraftSelex
and
final shopper !!!
THE BALANCING ACT
A successful story!!
54
Structure09.30 Opening Xavier Hua, Carrefour, and
Bernard Fradin, Kraft Europe
09.40 Social Pillar ECR Baltic
09.50 Economic Pillar ECR Italy
10.15 Environment Pillar ECR UK
10.25 Questions to panel of speakers
10.45 Refreshments
© IGD
Have you ever stopped purchasing food and grocery products as a result of any of the following?
11
15
17
27
28
35
35
28
0 20 40
Not stopped purchasing for any of these reasons
Learning more about how food is produced in a TV documentary
News stories about food scares (e.g. bird flu, foot and mouth)
Too much packaging
Hearing or reading about a company that made you question their ethics / values
Discovering from food labelling that products have ingredients you or a member of your family are allergic to
Hearing or reading about the government / politicians of the country which made you question supporting products from a particular country
Hearing or reading about a logo (e.g. organic or fair-trade) that made you question the claims made
Source: IGD Shopper Research 2007
% Main Shoppers
© IGD
Courtauld Commitment
• Aims:
– Design out packaging waste growth by 2008
– Deliver absolute reductions in packaging waste by 2010
Retailers’
commitment to reduction –
in UK
Source: The Brewery
© IGD
10
9
8
7
6
5
4
3
2
1
(GJ
/ Per
son
/ Yea
r)
Ener
gy u
se in
the
food
cha
in
Food supply (farm / sea as prepared food
leaving the factory)
Primary packaging
Secondary & transport packaging
Factory to shop
transport
Retailing Consumer shopping
Consumer cooling / freezing
Consumer cooking
49% 7% 3% 3% 3% 5% 16% 14%
Industry Council for Packaging & the Environment
Packaging protects far more resources than it uses
© IGD
Packaging Lifecycle & Secondary Packaging
Home
Retail
Extraction Manufacture Filling
Distribution
Inci
nera
tion
or L
andf
ill
Com
post
Return /
Reuse
Recycle
Tertiary Primary Secondary
Source: IGD Research
Secondary packaging design can have a major influence on the reduction of overall packaging and waste
© IGD
Examples of SRP and packaging reduction
Source: IGD Research
© IGD
2007Count: 48 cartons Pack: 6 across X 8 deepPallet Configuration: 8 cases/layer;
80 cases/pallet
2008Count: 35 cartons Pack: 5 across X 7 deepPallet Configuration: 9 cases/layer;
90 cases/pallet
New shipper case is more efficient and environmentally friendly USA / Macaroni & Cheese
BenefitsEasy open / Less laborEliminate overhang
Printed caseReduced case count
Reduces corrugate by 20%
© IGD
Germany / Central Europe Jacobs Coffee SRP tray facilitates in store handling with minimal outer packaging waste
Corrugate tray – No hood – No wrap
62
Structure09.30 Opening Xavier Hua, Carrefour, and
Bernard Fradin, Kraft Europe
09.40 Social Pillar ECR Baltic
09.50 Economic Pillar ECR Italy
10.15 Environment Pillar ECR UK
10.25 Questions to panel of speakers
10.45 Refreshments
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