Fast-moving consumer goods (FMCGs) have particular logistical requirements, especially those that are highly perishable. And as consumer behaviour shifts, so too does that of manufacturers, retailers and the supply chain that serves them

In 2021, the size of the UK grocery market stood at around £212 billion. The market has been steadily growing since 2004 and is forecast to reach over £241 billion by 2027. 

It is estimated that in 2027, supermarkets will be the largest sales channel for grocery retail, with a value of almost £97 billion. In the UK, German discounter Aldi has seen rapid growth and has proven to be a significant disruptive force on the market.

Another disruptor is the increase of tailored D2C (direct to consumer) solutions in this sector.  The value of online grocery channels is expected to amount to £26.9 billion by 2027.

Boosted by Covid lockdowns, this trend is changing last-mile delivery strategies: more and more vans are delivering food to customers’ doors, alongside continuing bulk deliveries via lorry to supermarkets.

Requirements

Tim Dabbs, Head of Contract Logistics at NNR Global Logistics, pointed out that whatever the channel, the movement of foodstuffs must meet high standards.

 Regulatory compliance associated with hygiene, labelling and handling must be at the highest standards. Adhering to these standards ensures the safety and quality of food products throughout the logistics process. 

Key requirements include…

• Temperature control to avoid product spoilage or degradation
• Inventory management and systems to maintain correct product levels and product rotation
• Transportation expertise 
• Highly efficient and compliant storage facilities with temperature control, adequate space and suitable storage racks.
• Supply chain management and expertise that ensures high levels of service with minimal margin erosion to the customer 

There is also a growing consideration of environmental performance throughout the supply chain, including warehousing. New brands are challenging dominant players in the market, Dabbs said.
One example is the drinks segment within grocery. 

Flavoured drinks and non-alcoholic drinks are making their way onto the shelves alongside traditional brands. These brands bring new flavours with strong, bold branding – heavily marketed and with social responsibility and environmental values at their core. Such fast-moving brands require a complete logistics partner to assist in their rapid expansion and offering – covering the major retailers, to the wholesale market, to pubs and restaurants and D2C.   

He said a flexible supply chain is essential to meet the demands of fast, organic growth – as is finding the right provider to provide complete transport solutions, from courier deliveries to consumers’ doors through to full-load deliveries to major retailer distribution centres. 

Support

NNR has developed its operational expertise in the fast-moving food sector over the last decade and is driving SME businesses forward, Dabbs said, by providing the expertise highlighted above and investing heavily in food-grade facilities, systems and people.

For example, 18 months ago Jubel Beer made NNR its logistics partner of choice. The company has experienced significant growth in the UK beer market since launching in 2018. The brand is known for its “dangerously refreshing” beers cut with fruit, which are also gluten free, vegan and certified carbon neutral.

Jubel started off by targeting small, independent pubs and bars, but has expanded into the retail and wholesale sectors having secured partnerships with major supermarkets and drinks distributors. This has significantly increased its visibility and accessibility to consumers across the UK – and its supply chain needs have changed accordingly.

NNR has supported this growth by providing a cost-effective, high-level service through its contract logistics division in the UK, which recently moved to a new distribution centre (DC) in Wellingborough. 

The new, 130,000ft2 DC is a modern high-bay facility that offers both traditional warehousing and distribution, and the sort of value-added services essential to thrive in today’s competitive FMCG environment, such as e-commerce fulfilment with EDI/API integration, pick and pack, re-work and labelling.

With the new DC and its long-established expertise, NNR is truly partnering to drive its customers’ growth,  Dabbs said.