fusion point research Marketing Research Reports

Marketing to Supply Chain for Food Products Leaders in CPG

Understanding Their Role

Supply Chain Management (SCM) covers forecasting, planning and management of products from their origin and sourcing through to customer purchase.1 A supply chain may be simple or complex depending on how many touch points there are in the process. Raw products originating overseas that are then moved to a different location for processing and packaging, storage and transportation to stores can involve multiple providers and organizations. These types of supply chains are multifaceted, very complex and as a result, the process remains dynamic and fluid.2

 

Consumer food products are a perfect example of how complicated supply chain management can become. To get an idea of the size of the food supply chain in the United States in 2012, there were more than 2.1 million farmers or producers of food products providing their products to over 26,000 manufacturers and processors. These manufacturers and processors then sell the products to 33,000 wholesalers or distributors to meet the demands of 580,000 food service vendors and 210,000 retailers. The value of this immense food supply chain in the United States is over $1 trillion in consumer sales in the US.3

 

The challenge in terms of supply chain management is retailers, in an effort to meet growing consumer demands and to stay competitive, require faster and faster ordering and delivery. Many retailers now require seven-day order and delivery, which strains all parts of the food supply chain.4 Supply chain management must be extraordinarily efficient to meet demands. The process must also be collaborative, transparent and traceable across all parts of the process to meet safety standards and consumer requirements. If managed well, including being sustainable and environmentally friendly, the benefits to all those involved are many. Gains will include satisfied customers, increased sales, improved brand loyalty, and a lower risk of food recall or adulteration.5

 

There are many different types of organizations involved in a consumer products food supply chain, including those directly involved in food production and those involved in the area of logistics. These include:

 

  • farmers or producers
  • ingredient suppliers
  • manufacturers
  • packagers
  • transportation & delivery providers including trucking and airfreight shipping companies
  • information system providers
  • storage & public warehouse providers
  • wholesalers & suppliers
  • retailers
  • restaurants
  • service providers of water waste disposal
  • process equipment manufacturers
  • producers of additives, supplements, fertilizers, chemicals, cleaning supplies, animal feed, and fertilizers.6

"Our goal is to sustainably source the raw materials we use in our products. We are committed to sustainably sourcing 100 percent of our 10 priority ingredients by 2020 –representing more than 50 percent of our annual raw material purchases.”

– General Mills Global Responsibility Report 2015.7

1 Council of Supply Chain Management Professionals. “Supply Chain Management Definitions.” Accessed 9/14/2015.

2 Wisner, Joel D. and Keah-Choon Tan and G. Keong Leong. Principles of Supply Chain Management: A Balanced Approach. 3rd Ed. South Western College Pub. 2011.

3 Ibid.

4 “Keeping Track - Building Leaner and Greener Distribution Networks.” Food Engineering & Ingredients 39, no. 2 (2014): 26 – 29. EBSCOhost(97007009).

5 “Managing Performance in Food Supply Chains: A Discussion on the Impacts, Opportunities and Challenges Arising from Managing Food Supply Chain Performance. White Paper. SGS. 2013. Accessed 9/14/2015. www.sgs.com

6 Ibid.

7 “Global Responsibility 2015.” General Mills. Accesses 11/13/2015. Available at: www.generalmills.com/en/Responsibility/Sustainable...

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Copyright © 2016 Fusion Point Research, Inc.

Consumer products companies with food brands manage vast and complex supply chains. In order to maintain integrity of the brand, each step in the process must be safe, traceable, certified, audited and compliant with all variety of regulations.
fusion point research Marketing Research Reports
Consumer products companies with food brands manage vast and complex supply chains. In order to maintain integrity of the brand, each step in the process must be safe, traceable, certified, audited and compliant with all variety of regulations.
  • farmers or producers
  • ingredient suppliers
  • manufacturers
  • packagers
  • transportation & delivery providers including trucking and airfreight shipping companies
  • information system providers
  • storage & public warehouse providers
  • wholesalers & suppliers
  • retailers
  • restaurants
  • service providers of water waste disposal
  • process equipment manufacturers
  • producers of additives, supplements, fertilizers, chemicals, cleaning supplies, animal feed, and fertilizers.