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Packaging—More Than Aesthetics
By: Elizabeth Abrams
Posted: November 9, 2009, from the November 2009 issue of GCI Magazine.
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Find someone who understands the beauty industry. These products must remain fresh to retain quality and consumer confidence, so a provider with an efficient stock rotation program is essential. Also look for Web-based visibility programs that allow manufacturers to monitor inventory levels and “best buy” dates. What about value-added services such as kitting, cross-docking and repackaging for seasonal sales?
In regard to transportation costs and as evident with volatile fuel prices, products must travel the least miles possible to be cost-efficient. For smaller brands, utilizing consolidation programs is the most efficient way to level the playing field. These programs—offered by companies such as CaseStack, Hanson Logistics and Millard—combine various products headed to the same retailer on one purchase order, shortening delivery times and reducing costs and damages. Consolidation programs are sustainable by design; they reduce the frequency of less-than-truckload (LTL) orders and that reduces carbon emissions.
For suppliers, the conservation is most evident in transportation costs. These programs turn the rule “reducing logistics costs requires reducing service” upside down. And by throwing old paradigms out the window and working directly with retailers, there are methods to reduce costs by 20–40%—while also increasing on-time deliveries and taking millions of pounds of greenhouse gasses out of the equations. This can all add up to improved sales, as well.
ABS, which participates in a consolidation program to Wal-Mart, has been able to keep costs down because orders that once went LTL are now delivered on full trucks. The savings translates into more than one cent per unit, or 34 cents per case. The company’s shipping costs dropped by 42% as part of the program, and in 2008, ABS expanded with European demand. Their on-times have improved by 20% and their participation has resulted in the elimination of 1.2 million pounds of greenhouse gas emissions.
The reduction of gases, alone, is often worth the change in shipping. Consider, green beauty products are preferred by 50% of consumers, but 76% of those consider it unacceptable to pay more for sustainable goods, according to the 2009 Global Green Consumer Survey. It is more important than ever to back up sustainability claims with reduced waste, and hence, reduce cost. Sustainable inherently implies cost-neutral, and one of the easiest ways to both improve a product’s appeal to the eco-conscious consumer and reduce its price is by reformulating packaging.