June 22, 2017
Christmas 2017 will be very different from 2016 with some food manufacturers left out in the cold if they don’t plan ahead.
Director and Co-Owner, Stuart Hancock, said the impact of inflation, the continued growth of digital and the availability of cold storage facilities as December looms could present a problem for businesses.
To help ensure companies are not left out in the cold this Christmas, we have provided three top tips for manufacturers:
1) Plan ahead
As with most organised operations, it’s all in the planning. This means planning way in advance. In cold storage operations space is at a premium in the last month of the year; manufacturers cannot rely on capacity being available for their products in the direct run up to 24th December. Failing to think ahead will result in increased cost at a time when margins are already being scrutinised under the veil of inflation. Stuart Hancock says: “The solution is to find a facility early on in the year, with freezing and up-tempering facilities. Chilled manufacturers are those most at risk.
2) Stay customer focussed
In other words, know what your customers’ customers want; the end user, the consumer. Christmas 2016 generated many positive sales and profit headlines but with the rise in inflation and the leaving of the European Union starting to reverberate in the food shopping aisles, Christmas 2017 paints a different picture.
According to a blog post by consumer research organisation, Mintel, Richard Perks, points out that supermarkets enjoyed a buzzing Christmas in 2016 with price consistency and value for money being at the heart of their success. He claimed that ‘trust’ was a trend and that retailers need to reestablish this with their customers. To build that trust retailers will need to demonstrate they can provide a reliable and responsive service during the festive season.
Customer-food-to-go has been a recurring Christmas theme over recent years and it shows no signs of waning. Deloittes Retail Trends 2017 report states there will be even more growth in online shopping and with the increasing prominence of connected devices triggered by the Internet of Things, customer expectations will be raised even further.
Convenience will continue to be an important aspect of consumer decision making. Stuart adds: “It is imperative that manufacturers keep abreast of consumer behavior as this is what ultimately drives retailers. Macro environmental issues are key in understanding how customers are behaving now and how they will in the future.”
3) Keep a close eye on costs
Leading up to Christmas, one of the biggest disrupters in the cogwheel of the food supply chain is the up-tempering process. Using the latest microwave technology available allows products to be up-tempered in minutes instead of hours and therefore allows much tighter timescales to be worked towards.
Stuart Hancock says: “Seasonal demand is taking on a new form which means it’s not enough to simply be aware of it – action is needed earlier on in the year to avoid the new stresses Christmas demand brings. Finding somewhere with a value added service of date coding, packing and delivery to the retailer further alleviates the stress that Christmas has come to represent.”
Although it appears food retail is challenging the declining pattern of overall retail sales in 2017, it still looks likely that sales will fall due to the many political events taking place. This means being even more watchful of how you manage your production processes in the lead up to Christmas 2017. Stuart adds: “Having your cold storage requirements planned for now is a controllable factor in the present milieu of uncertainty.”
Click here to discuss your requirements for Christmas 2017 with a member of the Rick Bestwick team