Retail analytics: Here’s lookin’ at you, kids

I recently reunited with FoodOnline.com to write a story on Big Data analytics in the retail food supply chain. The first bylines I had for that site were in 1999, when I was Editorial Director for that related sites — before the big bursting of the Internet Bubble. Accenture’s Stages of Analytic Capabilities

When the Internet was new, there were no iPods, let alone iOS, Android or Bluetooth-powered beacons; Big Data was just a gleam in its young Business Intelligence mother’s eye. And retailers had no idea what to really do with their Business Intelligence systems. Those who finally do, today, see BI as old news as analytics — predictive and now prescriptive — come into their own, powered by Big Data and cloud computing.

Today, as an exec from SAS told me, a shopper who stands in front of a Nescafé display for more than 10 seconds might just get a virtual tap on the shoulder, or rather a bzzzz in the pocket, with a coupon to get that package of coffee off the shelf and in to the cart.

My favorite interview in this story just might have been Nick Hodson, former head of strategy at Safeway Stores and current leader of the North American consumer and retail business practice of Strategy& PwC, who reminded me that the technology isn’t at all the point of progress so much as creative minds who come-up with new things to do with it. Yes, major retail marketers from Walmart and Nestlé may well fave a backlash over privacy concerns if opt-in/out issues aren’t handled correctly, but these times sure are interesting. Read all about it in my story, ” Predictive Analytics Helping CPGs Reach Individual Consumers.”

Toward a legal, national market for cannabis

The story’s out in Pharmaceutical Commerce magazine: “Medical marijuana looks for a place in conventional drug distribution.” It’s based on all kinds of research and interviews with CEOs, legislators and prognosticators in this budding industry.

Frustrations are great as the right hand of the U.S. federal government (DEA) either doesn’t know — or care, or approve — of the actions, research and recommendations of its own left hand (NIH among others). Also, it’s interesting that some of the same Big Pharma industry players that fund crackdowns on marijuana-related crimes (according to current laws) may well be seeking ways to cash-in on the eventuality of legal cannabis commerce. Currently, money crossing state lines can lead to issues with money laundering, since the lowly weed is still an illegal Schedule 1 substance.

A tenuous relationship exists between Big pharma, the supplement market and dispensaries with regard to cannabis’ legality. (Photo: Cannabis Science)

Changes are coming from a few corners of the medical cannabis world — as my investigations, only some of which are published, attest. Eventually at the state and federal levels, the day will come when cannabis is as broadly accepted, profitable and legal as any FDA-approved supplement, OTC drug or prescription remedy.  Ongoing research, advocacy and public support make it seem inevitable if not imminent.

The story linked here includes interviews surrounding pharmaceutical business-related developments. But the medicinal/health benefits-related aspect of this plant don’t end with conventional drug development, owing much to proponents of the whole-plant entourage effect. There’s more to the story than this relatively 101-level view written for mainstream, non-cannabis-versed executives.

A DYI ‘shroom farm? A fish-tank herb garden?

“That’s the most disgusting thing I’ve ever seen,” the Whole Foods buyer told Nikhil Arora, who opened a big & stanky bag-o-fungus in the buyer’s office. To the young innovator, that bagful was the crown jewel of a new product he’d liken to a “next iPhone” for natural products fans.

He was kinda right, as you’ll find out if you read the story — “Home mushroom farming, fish-gardening and other supply chain collaboration challenges,” — that I wrote when I saw Nikhil in my travels on the packaging beat. Over the next few years he found the right suphttps://www.packworld.com/article/contract-packaging/contract-packaging-news-trends/home-mushroom-farming-fish-gardening-andliers for his DIY mushroom kits and then a cool aquaponic fishtank-meets-herb-garden kit.

New product to bow end-February 2015.

New product to bow end-February 2015.

Now he Alejandro Velez, co-founders of Back to the Roots, are at it again; they’ll unveil a new product on February 26th.

What’s it gonna be? I don’t know, but I couldn’t be happier to see these folks start so small and gain national distribution so quickly with such simple, honest ideas.

Rock on, guys.

Industry compliance to FDA Food Safety Modernization Act flying high

How's the FDA's new food safety rule affecting how food gets packaged?

How’s the FDA’s new food safety rule affecting how food gets packaged?

One of the hats I’ve worn of late is that of Editor of Packaging World‘s 2014 Food Safety Playbook for 2014 (as well as the preceding, inaugural edition).

Among the updates packed into the 101-page e-book were the results of a brief survey of U.S. food and beverage product packagers done in Q1, gauging industry readiness for the U.S. Food and Drug Administration’s Food Safety Modernization Act (FSMA) now being implemented in rolling deadlines.

The results were optimistic; a large and in some aspects overwhelming majority reported that they have already completed the law’s key requirements into their food safety plans, or will in the coming year.

Since this blog is open to all who click, I’ll say that there’s a LOT to the law, the industry’s reaction, overall compliance and issues that’d have lay-people wondering: “What does it all mean?”

In general, I think the law’s a good thing. If you want to discuss in depth, I’ll invite you to read the whole playbook, or be smart enough not to have to — in which case I’ll refer you to someone with first-hand knowledge of the law, and of food safety. I was once certified to be a food safety guy in the dairy industry, but really, was no expert. Ever.

Want more on the survey results and implications? Read my article, “FSMA compliance soars for those who meet existing standards.”

Be forewarned; I don’t divulge all of the results in this story, but there is a link to the full playbook at that link. If you’re in the industry, I hope you won’t mind having to register to get the playbook for free.

War over water? Believe it or …A.T. Kearney

War over water? If we can have wars over oil, why not water, farmland and other resources that drive economic development? It could happen, according to Nausheen Kaul, principal with A.T. Kearney, advisor to some of the world’s largest corporations.

Worsening inequality and aging populations contribute to global destabilization.

But it struck me how, based on the data they get from firms such as Kearney, how global organizations react: They’ve already begun moving to acquire or otherwise secure the world’s water supplies and prime agricultural real estate, Kaul said.

That was just one nugget from Kaul’s presentation on global economic trends. (My straight-news version of it’s here.) His main goal was insight-shedding, not fear-mongering.

What are the implications of this war-over-water business, beyond pure monetary gain?

There are a few ways to look at it. One is that that massive land-and-water grabs by Western firms will stabilize developing economies. Another perspective is that this activity will amounts to economic colonization and will fuel the conflict as surely as the British political colonization did…and will ultimately fail. A third perspective is that conflict is inevitable, and given the regulatory climate, Big Money in the West must do what they it does because regulations allow it and shareholders demand it; if Coke doesn’t gobble-up the world’s water and land, Pepsi will.

As global financial leaders invest, governments will continue to buckle under the pressure of aging populations and worsening inequality.

Natural resource and political instability, Kaul said, is already causing a “Global Resource Nexis” in which the interplay between the supply and demand of food, energy and water are driving some troubling developments. By 2050, 70% of the world’s population will be “hyper-urbanized” into cities, governments will buckle under the pressure to accommodate aging populations and technology developments will make or break efforts to feed more people, sustainably and with fewer resources.

Kaul presented solutions for how companies can prepare, but they’re all about benefits to business. Is what’s good for business always good for mankind?

I’d like to know, but don’t comment here; drop me a line.

Redefining the outsourced supply chain

To state the obvious, contract packaging is rapidly evolving. The core outsourced-packaging function is easily understood, but the form and function of the contract packaging organization is a moving target. Decades ago, a co-packer was defined by the machines the company had on the floor.

By Bob Sperber; original post here.

Packaging-specific services remain a much needed, much in-demand core competency. Consumers want the benefits of the latest primary containers, pouches, blisters, pillows, stick packs, and/or the latest secondary innovations in POP, club packs, multi-packs and the like.

It’s why, to cite one of innumerable examples, Salt Lake City-based Northstar Labs has steadily upgraded its injection molding, liquid filling and four-color digital label printing capabilities. And it’s why Fairport, NY-based LiDestri Food & Beverage, for instance, leveraged its contract manufacturing and packaging smarts to develop a new multi-compartment flexible pouch format and expand into pharmaceuticals.

CPsummer13Brands, too, find themselves in the co-packing game. Toad-Ally Snax, Bristol-PA, which markets its own brand of chocolate-covered goodies, nets new business through additional contract and private label work—something even the largest brand marketer-manufacturers do whenever company-owned production assets sit idle for so much as a shift a week—just to keep capacity at 100% and feed the bottom line.

Those for whom co-packing is the core focus are doing much more these days to give a brand anything it can, from upstream package development and manufacturing to downstream warehousing, fulfillment and logistics.

Fave Juice, for example, outsourced just about everything but product development and marketing to The Scoular Company, which manages everything from ingredient and material procurement to manufacturing, logistics and contract packaging—even finding and managing day-to-day operations and growing a nationwide network of co-packers.

One day, it’ll be hard to define the very term “contract packager,” because the overarching industry trend isn’t on four-walls production, but on the supply chain. Whereas co-packers were once seen as a “stop-gap” solution, tomorrow’s contract packagers are “sophisticated logistical specialists,” says Chris Nutley, president of MSW Packaging Services and Contract Packaging Association president.

This reality is reinforced by Industry consolidation, notes Lisa Shambro, executive director of the Foundation for Strategic Sourcing, in her latest column. She points to private equity firm Wind Point Partners’ merger of Hearthside Food Solutions and co-packer Ryt-way Industries, which has created a $1-billion contract food and consumer goods manufacturer-packager with 19 facilities across seven states.

Likewise, Coregistics, itself a merger of co-pack and supply chain firms, just acquired Chicago’s Cano Packaging to offer food brands “increasing operational efficiency while significantly reducing their total supply chain costs,” according to CEO Eric Wilhelm.

As contract manufacturers and packagers broaden their horizons, large logistics firms are also deepening their packaging capabilities. GENCO, for instance, has formalized its contract packaging operations into a new, dedicated business unit. Dave Mabon, president of the business, says that brands are seeing savings into the millions of dollars due to tight partnerships aided by data visibility, or integration, across the “functional silos” present in large organizations.

The savings in purchasing, packaging, logistics and other “silos” need to be seen in cumulative form. Managers who ask, “What’s in it for my department?” need to recalibrate their attitudes and put on their cross-functional thinking caps.

Contractors need to maintain tight communication but also remember that big brands will continue to outsource as well as take work back in-house as the spreadsheet dictates. What should they do? “Enjoy the ride while you have it—and build other business for when you don’t,” advises Tom Bacon of Aaron Thomas Co., in the latest Personal Best profile.

Perhaps the hardest job in any co-pack relationship is finding the right fit in the first place. Online tools can help, from “Find a Contract Packager” link on the CPA’s homepage (www.contractpackaging.org) to Sealed Air’s Co-Packer Connection (www.copackerconnection.com), a matchmaking database service that now boasts more than 1,000 facilities indexed down to their machinery, financials, certifications, and more—as we’ve covered in the news.

Come to think of it, everyone and everything I’ve mentioned here, and more, is detailed in this July/August Contract Packaging, in print and online. Read on!