The survey presented by Marca reveals a strong sector with potential for further optimisation. All aspects can be improved provided the players increase their level of cooperation. 

The lead-up to Marca, the international exhibition of private label products organised in cooperation with Adm and due to be held in Bologna on 13 and 14 January 2016, is a time not just for organisation but also for discussion and greater sharing of knowledge amongst stakeholders. To address the most important issues facing the sector, Marca recently organised a training seminar for co-packer companies.

Guido Cristini, Full Professor of Marketing at Adem Lab-University of Parma and the Scientific Coordinator of Marca, helped us take stock of the situation based on data from a survey conducted amongst the co-packers who will be taking part in the show.
“Like every year, the co-packers have confirmed their long-term relationships with customers,” Cristini explained. “This is a sign that in spite of difficulties the relationship is strong, organic and generally collaborative. Furthermore, the development prospects for the co-packing industry suggest that we will see significant growth over the coming years. Some areas in particular are seeing greater cooperation between co-packers and their customers. Examples include label production, packaging design, research and development and market trend analysis with a view to identifying new products.”

Working together
As in all situations that involve cooperation between different stakeholders, the sector is not without its difficulties. Partly due to the recent years of crisis, the modern distribution system has gained in importance in its relationship with co-packers. This relationship can be managed in two ways: either by exploiting a position of strength, which results in an unequal division of generated value to the benefit solely of the dominant player; or through a redefinition of the sector processes based on real cooperation with the aim of increasing efficiency and bringing benefits for all stakeholders. “The sector will hopefully take this latter course.”

Critical issues
The analysis also revealed some areas that co-packers have indicated as requiring improvement, which need to be tackled through the commitment of all parties in keeping with the above-mentioned vision. One issue is that of “time windows” for goods loading/unloading associated with penalties for failure to meet the delivery deadlines set out in the contracts. Another concerns participation in auctions held by the modern distribution system. In this case problems emerge relating to the procedures for participation, timeframes for compilation and the complexity of the entire process.
The findings of the survey not only describe the current state of the sector but represent a starting point for improving the efficiency of all processes. Professor Cristini’s suggestion is to: “Start out by measuring the processes and the problems so as to be able to improve them. This is possible if co-packers and distributors share these results and work vertically on specific issues through working groups so as to identify concrete solutions that can be proposed to the entire sector. This way the positive aspects shown by both parties will help to further harmonise sector relationships.”

Co-packers: the figures
1,400 retail chain subcontractors
Some 90% of these have a turnover below 50 million euros
SMEs employ 35,000 people