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Packaging and the Value Chain:The situation of Shelf Ready

Packaging ?

Olivier LABASSE General manager ECR France - ECR Europe Board member

© ECR France 2010

Packaging: 3 levels

From factory to warehouse and from warehouse to point of sale, packaging system consist of:

Primary packaging: Sale’s packaging for the shopper

Secondary packaging: packaging of grouping (cases, boxes…)

Tertiary packaging: Support packaging (pallet, trolley, container…)

12

3

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Efficient unit loads’ way

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Fast moving/high volume product on display pallet produced to order and cross-docked to store

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Slow moving/small volume product produced to stock and picked on primary level to store order

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End of the Supply Chain: from the Store backroom

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Point of sale

To the shop floor

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Shelf Ready Packaging: definition and value judgement

Shelf Ready Packaging (SRP) is the term used to refer to a product that comes in a ready merchandised unit which is easy to identify, easy to open, can easily be put onto the shelf and disposed of, allowing an optimisation of shelf replenishment and enhanced visibility.

SRP cannot be considered as a standalone best practice, whose generalization would bring substantial and measurable benefits at the industry level. Its implementation should follow a case-by-case iterative, rather than systematic or dogmatic approach.

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The 7 Guiding Principles of ECR

1. Always of Value to the Shopper, Retailer and Manufacturer

2. Compliance with Environmental Legislation and Public Policy Concerns

3. Avoid Fragmentation and Complexity

4. Maintain Brand Identity

5. Measure Implementation

6. Requirement of Long-term Commitment from Retailers and Manufacturers

7. Compliance with total Supply Chain Efficiency Principles

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SRP Functional Requirements

Easy dispose

Easy shop Easy Open

Easy Shelf

Easy ID

Optimized SRP

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SRP Business Case Methodology

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Step 4 : Define & Evaluate Alternative Solutions

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Step 5: Agree Relevant Business Case Drivers

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Shelf Ready Packaging

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Consumers’ attitudes toward SRP

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10

20

30

40

50

60

70

80

Auchan Carrefour Leclerc Intermarche

% M

ain

Shop

pers

Easier to find products Draw attention to new productsStops the product getting damaged Makes shelves look clean and tidyMakes shelves look more appealing

Source: IGD’s International SRP Report, www.igd.com/rrp

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0

5

10

15

20

25

30

35

Auchan Carrefour Leclerc Intermarche

% M

ain

Sho

pper

s

There is often empty packaging on the shelf

The packaging makes it harder to take the products from the shelf

There is too much packaging on supermarket shelves

Consumers’ attitudes toward SRP

Source: IGD’s International SRP Report, www.igd.com/rrp

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In France, 6 000 à 8 000 Sku’s Shelf Ready Packaging

Step 7: Implementation and selected improvement

Around 5 000 Around 3 000

Easy dispose

Easy shop Easy Open

Easy Shelf

Easy ID

From SRP to optimize SRP

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Easy ID

France: Shelf Ready Packaging

Facile à identifier, à trouverFacile à identifier, à trouver

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Easy Open

Facile à ouvrirFacile à ouvrir

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Essential requirements to the manufacturing and composition of packaging

(Extracts from European directive 94/62/CE)

Packaging shall be so manufactured that the packaging volume and weight be limited to the minimum adequate amount to maintain the necessary level of safety, hygiene, and acceptance for the packed product and for the consumer

Packaging shall be designed, produced and commercialized in such a way as to permit its re-use or recovery, including recycling, and to minimize its impact on the environment when packaging waste or residues from packaging waste management operations are disposed of

…

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Compliance with essential requirements : European norms (JOUE 19/02/2005)

PREVENTION

QUANTITATIVEPackagings

source reductionEN 13428 – 2000/4

RE-USE(optional)EN 13429

MATERIAL RECOVERY

EN 13430

ENERGY RECOVERYEN 13431

COMPOSTINGBIODEGRADATION

EN 13432

HEAVY METALS100ppm

QUALITATIVESource reduction of substances

noxious for the environmentEN 13428/C

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The European definition of packaging waste prevention

« The reduction of the quantity & of the harmfulness for the environment of:

• Materials & substances contained in packaging and packaging waste

• Packaging and packaging waste at production process level and at the marketing, distribution, utilization and elimination stages. »

This definition covers the whole life cycle of the product-packaging mix

Source : European Directive 94/62/EC, 3d article

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Sustainability Index develop the sustainability index. With this initiative, we are helping create a more transparent supply chain, driving product innovation and ultimately providing our customers with information they need to assess products’ sustainability.The index is being introduced in three phases:

Step 1: Supplier Sustainability Assessment

a brief survey to evaluate their own companies’ sustainability, focus on four areas: energy and climate; material efficiency; natural resources; and people and community.

Step 2: Lifecycle Analysis Database

create a consortium of universities to collaborate with suppliers, retailers, non-governmental organizations and government officials.

Step 3: A Simple Tool for Customers

To provide customers with product information in a simple, convenient, easy to understand manner so they can make choices and consume in a more sustainable way.