 A recent study from Consumer Goods Technology magazine shows that the average consumer goods company derives 25% of its revenues from products launched within the past 5 years. At the same time, only about half of all products launched achieve profit goals.
Nowhere is the concept of "new" – or more specifically – "new and improved" more prevalent than in the Food and Beverage (F&B) industry. New product launches put tremendous strain on food logistics networks to successfully manage the packaging and other raw materials leading up to inventory build, and they stress already-taxed distribution networks to ensure a profitable roll-out.
Further research suggests that the pace of innovation is about to pick up in F&B. In fact, consumer preferences for "farm fresh" and organic products are leading traditional packaged food manufacturers to create products that will encourage retailers to place products next to produce and gain much-coveted "freshness credibility."
Considering the decades-long trend of SKU proliferation, the high rate of new product launches that fall short of the target, and the constant call for existing products to be re-invented, the need is greater than ever for flexible, scalable distribution technology. The most successful F&B supply chains now and into the future will be equally adept at managing new product launches and obsolete inventory.
See previous columns:
Consolidation in Grocery Retail Sector Transforms Food & Beverage Supply Chains
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