On the warehousing and logistics side of the beverage business, among the key trends and technologies that made the 2013 Beverage World HIT List are half-size pallets, automated guided vehicles, keg return programs and gravity-flow racking systems for lower volume items.
Less is More
When supplier Chep promo’d its half-size pallet at Pack Expo in Las Vegas in late September, company reps prefaced the unveiling by noting it’s the first major product innovation for the United States market in about two whole decades. So, to paraphrase famed news anchor Ron Burgundy (who returns to cinemas this month), it’s kind of a big deal. The pooled half-size pallet is designed as a more efficient option for retail merchandising as an in-store display. About 60 percent of the total cost comes from moving products and getting them to stores, and the half pallet cuts down on a lot of that cost. The reduced-size product is designed to enhance the profitability of fast-moving products, especially bottled water. It’s tougher and tougher to make money off of bottled water, especially when 24-packs are being sold for as low as $1.99 in some major American retail establishments. The half pallet, the company says, will take out a significant amount of the labor cost of getting it to retail, thereby enhancing its profitability. So, it may be half the size, but it enhances distribution efficiency manifold.
Automatic for the People
Originally used in manufacturing operations, automated guided vehicles are playing a growing role in material movement in beverage distribution centers and warehouses. And many beverage distributors are finding AGVs a cost-effective way to move pallets through a facility while also adding automation to their operations. Besides reducing labor, as AGVs are guided by laser, vision or magnetic tape systems, the vehicles also can help boost productivity, improve product handling and increase safety while reducing costs and product damage. AGVs also offer flexibility as they can interface with distribution centers’ racking systems, block stack pallets and deliver cases of beverage products to and from automated storage and retrieval systems.
Reacting to member complaints and concerns about kegs that go missing or returned to incorrect locations the Brewers Association, the non-profit trade association representing craft breweries launched kegreturn.com, a site dedicated to helping consumers, homebrewers, retailers, wholesalers, brewers and scrap yards redirect kegs back to the breweries that own the kegs. This is big for the bottom line because according to the Brewers Association, keg loss costs craft brewers between $0.46 and $1.37 per-barrel of annual keg production. Assuming 2011 craft beer sales of 11.5 million barrels, that is a total direct capital charge to craft brewers of $5.3 million and $15.8 million annually. The website is aimed at reducing those costs and getting property back where it belongs.
Roll With It
When folks in the industry talk about the SKU explosion, everyone envisions a storm of pallets and cases, each holding a high volume of a single item. But the reality of today’s market is that so many of these new SKUs—in fact a vast majority of them—are slow movers with very limited volume. In a lot of instances, there’s a lot of single-bottle picking going on with these ultra-slow movers. That’s why racking suppliers are developing solutions specifically designed for these not-so-fast movers. For example, Twinlode recently developed a gravity bottle flow rack for low-volume wine and spirits SKUs, allowing for 22 SKU facings per eight-foot linear space. All bottles slide to the front position, eliminating the need for order selectors to rummage through boxes or reach underneath beams to pick items. The company touts the rack’s space-saving attributes, as it’s more efficient than having to always store wine and spirits in full cases. And that’s music to the ears of distributors dealing with a dearth of space in their warehouses thanks to all of the new product constantly flowing in.