Beverage Reusable Packaging and Pallets Impacted by Sanitation, Capital Allocation

Beverage reusable packaging must navigate sanitation, theft and capital allocation concerns.

Start at Page 1: Reusable Packaging Impacted by SKU Proliferation and Other Trends

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 5. Smaller Retail Footprints

When asked about the key challenges facing retail beverage market, Joe Kelly of K-Hartwall singles out the trend toward smaller retail footprints as the SKU range increases. He sees this as a retail issue and not just peculiar to drinks. “It is not just for beverage,” he states. “The challenge is across the retail sector. It is ‘the race for space’ as the range of SKUs increases, and as the retail footprint is becoming smaller.”

Retail space allocated for carbonated beverages is on the decline, Kelly reports. The result, he says, is that more frequent delivery is required. He notes that we are still in the early stages of finding solutions as retail shifts towards smaller footprint stores.

6. Sanitation

Sanitation has long been a top of mind consideration for beverage segments such as dairy and water, however Huesing believes that the trend will broaden across the beverage spectrum. “It is only a matter of time,” he said, before other applications will take increased interest in plastic pallets and containers that can be efficiently cleaned.

7. Reusable Asset Capitalization and Management Improvements

One area of inefficiency for the beverage supply chain, Lindell notes, is in keeping the right float size for pallets and containers. If the beverage producers purchase too many, they waste capital. If they under-predict, then they scramble to get containers or lose sales. Likewise, it can be inefficient for packaging suppliers who carry extra inventory on hand to help out customers in unexpected short stock situations.

Through RFID tagging, however, Lindell envisions that floats could be managed much more efficiently with such visibility, enabling more accurate predictions of usage and return. He suggests that with better predictive data, it become very attractive for beverage companies to consider a pay per use model for reusables versus capitalizing their own floats. This also involves a shift into managing the assets on the customer’s behalf, which the company already offers.

ORBIS also offers the management of reusables in beverage pools, including pallets, slip-sheets and topcaps, through its Reusable Packaging Management (RPM) division. For customers that do not have their own tracking system, the ORBIS SmartTrak is designed specifically to track and manage reusable packaging assets. Active tracking and management and cleaning of reusable packaging can reduce operating expenses and improve packaging utilization. To see an example of this type of cleaning, click here.

Both companies see management services for beverage providers as an offering that is gaining traction.

8. Reducing Theft and Loss

“We are trying to create public awareness that container loss is a huge problem and is totally preventable,” Lindell states.  Just for milk crates, the loss is an $80 million problem in the U.S. alone, according to Rehrig Pacific’s Asset Loss white paper.

In recent years, several reusable packaging suppliers and users alike have participated in initiatives to raise awareness around the theft issue through coalitions as well as through dedicated websites such as www.gotmilkcrates.com and www.kegwatch.co.uk. Participating in such efforts “is the right thing to do,” says Lindell.

Lindell sees the pallet and container disappearance issue as a two pronged effort between beverage distributors and retailers, noting that reusables are often left outside where anyone can grab them. Crate and pallet replacement translates into extra cost that is ultimate shouldered by the consumer. (See the related story: Reusable Packaging, Is It Really So Hard to Hold?)

In the final analysis, reusable packaging vendors are continuing to build on their legacy of providing extremely durable products to the beverage industry, while increasingly taking a more systematic approach to supply chain optimization in a changing distribution environment.