We spoke to Iryna Zender, international packaging manager at HelloFresh, and Sarita Van Bruggen, senior procurement packaging manager at Merck as we delve into the minds of packaging procurers and identify the key features that they are looking for in their box suppliers.
What are some of your challenges in packaging?
As both companies have products – food and pharmaceuticals – that have stricter requirements and regulations to adhere to in their packaging, they have additional considerations to keep in mind when it comes to selecting their packaging suppliers, and where the challenges lie.
For Merck, the growth of the ecommerce businesses, benefitting from the increase in demand during the pandemic, has impacted the supply chain and availability of packaging material. For time sensitive products, it is imperative for boxes to arrive onsite to get the products out to end users.
For HelloFresh, a growing portfolio of highly customized products that changes on a regular basis, and having to be delivered to individual customers, means that forecasting is significantly shorter term than the usual 6-12 months forecast you see in other industries.
Both brands need highly integrated suppliers that can support the dynamics required for their products. A strong, collaborative partnership with their suppliers, including good communication and matching core beliefs, is imperative to keeping the deliveries going.
What’s important in the way you communicate with your suppliers?
Frequent, transparent and thorough communication is important between the buyers and the suppliers, they said.
Suppliers should be careful about giving mixed messages or rapidly changing messages. Inquiries from customers should be researched into before providing a response. Sometimes news about possible delays in delivery gets dismissed too quickly, even before suppliers have looked into if there is any relevance to their businesses. If there are lots of mixed messages or rapidly changing messages, trust will become eroded.
Strength in communication throughout the supply chain is key for us.
Proactive communication throughout the supply chain, making sure that the message is clear and gets through to all parties involved, is critical to keep everyone updated. If the suppliers have identified a problem that could cause delivery delays, it is much better to let your buyer partners know earlier and work together to overcome the challenges.
This was especially difficult during the pandemic where situations were less predictable and many felt the constraint of suppliers not communicating promptly, causing implications further down the line in delivery to end users. Even now, logistic challenges in the supply chain are still causing problems for packaging producers and buyers alike. As we move into the ‘new normal’ ahead, it is important for both the buyers and the suppliers to work on rebuilding communication and collaboration efforts to prepare for the next step.
What is sustainability to you and how can your suppliers help?
Sustainability in product packaging is high on the agenda for HelloFresh and Merck. Both food and pharmaceutical products require them to make sure that products are delivered safely to the customers, which adds innovation challenges to their packaging solutions.
For HelloFresh, they continue to optimize their Dynamic Packaging Calculation tool and find ways to reduce the amount of packaging used, reuse what they can, consider the material used and come up with the most effective packaging solutions for their products. For Merck, they are building out a sustainability platform and investigating higher recycled content in their boxes. Both are looking for sustainability initiatives in their partners throughout their supply chain. In their box suppliers, they look for qualities such as where the paper is sourced from and the energy efficiency of their mills.
Sustainability is an interesting challenge as it’s not only the right thing to do, it’s also the smart thing to do.
While sustainability is sometimes considered as a branding effort for corporates, both HelloFresh and Merck recognize the importance of showing customers that they are responding to the global call to reduce plastic use, decrease their carbon footprint and combat climate change. It is the right thing to do for both the customer and the business.
The push for more recycling is reflected in the activities of the containerboard manufacturers. According to our economist, Derek Mahlburg, the recycled share of US containerboard capacity has risen from 28% to 35% since 2010. This share is expected to increase further in the coming years, with recycled containerboard accounting for the majority of the planned capacity expansions. This shift has been aided by the conversion of graphic paper mills to containerboard, as these conversions have often been to recycled grades.
What does your ideal box supplier look like?
Most of all, the supplier should keep in mind what we are and what we make, they said.
It is important to remember what the business is built on and what its needs are. Unlike many ecommerce retailers, fresh food and many pharmaceutical products cannot be pre-packaged and sit in warehouses to be stored for months and years until the moment they are bought. This means every box packaged and shipped has a significantly shorter time frame, yet still needs to reach end users securely and with consistent quality. The supplier will need to be dynamic, responsive and able to satisfy this requirement.
A supplier or partner is a part of our purpose in getting our products to the people that need it and they should be aware of that core value as we work together.
Transparency, reliability and trust are also important. This means no surprises and being truthful when problems occur rather than revealing that deliveries are going to be delayed on the delivery date. If there are challenges in play, it is important to solve them together, rather than hiding the problems until they become too difficult to resolve.
Both HelloFresh and Merck have long-term partnerships with suppliers and ensure that they are well integrated into their supply chain. Stringent screening processes help them to select suppliers that have suitable capacity, share similar values and are a good match.
This level of integration also means that they are hesitant to switch suppliers once the partnership has been established. However, they are always on the lookout to add more suppliers to their list as they grow and launch new products, making sure that they secure supply and diversify along the way.
Our European Conference, running March 8-10, 2022, has a day of content dedicated to packaging procurers. Our experts will be presenting on the latest developments in the paper and board markets, while industry speakers will be sharing their views on innovations in packaging solutions and decipher the changing consumer preferences. Don’t miss out the unique opportunity to learn more about the industry and what’s on the minds of packaging procurers today.
