What requirements are Customers subjected to? How does this impact their relationship with suppliers?
Interview between Corinne Loustalet, co-founder of Packitoo, and Frédéric Charlet, Consulting Director for the development of SMEs and mid-sized agri-food companies in France.
Corinne: "When you were Sales Director for a mid-sized agri-food company, what were the changes in the expectations of your own customers (large retailers, delicatessens or other distribution channels) to develop your turnover?"
Frédéric: "The expectations of our customers, mainly mass retail distributors in our case, have evolved towards a significant development of private labels, particularly 'specialized' ones, which has resulted in a multiplication of production runs and a reduction in the quantitative importance of each. The same applies to shelf-ready cartons, ready-to-sell and POS displays, with each major distributor following its own economic model (I am thinking in particular of Discounters) and wanting to differentiate itself permanently from the competition. I have just mentioned private labels, but the phenomenon remains the same for national brands: more and more segmentation of the offer (and therefore of the number of packages) and a promotional offer where we no longer simply affix a 'PROMO' sticker, but where it becomes necessary to develop increasingly refined and single-use packaging and displays."
2 – How important is packaging for the referencing of your products by the purchasing center?
This is a key point, both in terms of the company's ability to meet the customer's packaging requirements (stand-up pouches, trays, etc.) and in terms of meeting the development deadlines for new packaging. And all at the right price, of course! In addition, technical demands are becoming increasingly sophisticated, particularly in the areas of recyclability and ergonomics, for consumers who are increasingly mobile and eco-conscious. In short, it's essential to be able to offer a wide range of packaging options that are always innovative and very fast.
3 – What kind of organization did you put in place within the company to address this packaging issue?
We had structured a packaging purchasing division with a packaging engineer and an assistant. Their role was to define the specifications, qualify packaging suppliers, negotiate prices and seek innovation. The marketing department is responsible for the technical monitoring of packaging development, and the supply chain ensures the supply. It is clear that the packaging unit spent a significant portion of its time calculating and entering packaging prices into the system.
4 – What were your main pain points in this area?
We are suffering from the gap between the requests for quick price feedback from our mass-market retail clients and the sometimes very long lead times for calculating packaging prices by our suppliers. And we are under increasing pressure to reduce the time it takes to design and develop packaging, while facing fixed and non-modifiable store launch dates. The result is constant tension, a certain amount of frustration, and a widespread feeling of never being ready on time despite the quantity and quality of work provided by the team. Not to mention the potential penalties charged by distributors if launch deadlines are not met...
5 - How do you think HIPE can address these challenges?
HIPE increases flexibility and responsiveness to price calculation requests, compresses the total "time to market" and thus accelerates revenue development. The HIPE solution also opens up other packaging solutions that were not previously considered. Finally, it should free up our packaging department's time spent on retrieving price offers, so that they can better focus on their key mission, which, in my opinion, is to "hunt" for innovations around the world of packaging.
6 – In general, do you think that digital transformation is the way forward for the development of the packaging industry?
To say that digital transformation, the convergence of IT and information technologies, is fundamental for today's companies may seem commonplace. Yet how many have really embarked on this process? Being very involved in international trade, I can only be alarmed by the delay taken by our national companies when I see the level reached by foreign competition, especially in so-called emerging countries. This transformation is at the convergence of many areas of competitiveness and efficiency: reduction of costs, deadlines, better collection and circulation of information for a more horizontal and efficient management... In the commercial field, which is mine, the gains are immense and, without mentioning them all, I will name the one that seems to me the most strategic: the rapprochement between the consumer, the company and its products. This makes it possible to build a real long-term relationship with the consumer, in order to support them throughout their purchasing and life journey. And to transform them into a real player in the sustainable development of your company (for example, co-creation of products) and society.