3PLs cash in on customisation co-packing opportunities

Wincanton is scouting around for a site suitable for a new dedicated co-packing operation in a bid to cash in on growing demands from retailers for customised packs and display material.

This could save cash for manufacturers by cutting out specialist middlemen, claimed Wincanton's manufacturing division head, Jeff Anderson. Historically, he said, products have been sent from factories to specialist co-packers and then transported all the way back again before being sent on to the customer.

As Wincanton already has the infrastructure to deliver to the retail customer base, it could do away with the return journey back to the factory, offer co-packing services at the manufacturer's national distribution centre or at a dedicated facility, and then deliver products straight on to the customer, he said.

This kind of arrangement was already working well with Heinz and Procter & Gamble, for whom Wincanton was creating multi-buy formats, shelf ready pallets and promotional packs, he said.

With up to 30% of product lines going into retail now requiring some kind of extra work to meet individual retailer requirements, promotional packs, tailored displays and customised product formats were increasingly viewed as an activity outside of the core manufacturing process, he added. "This is where third party logistics providers (3PLs) can add value."

Wincanton will also be targeting the drinks industry in earnest this year, added Anderson. "The drinks industry is worth £15-17bn at retail value and we want a larger slice of that."

Collaborative distribution projects, whereby manufacturers were trying to cut out wholesalers and club together to find more cost-efficient means of making lots of small drops, were also a big opportunity, he said.

"Manufacturers are increasingly talking to each other and saying, 'why do we need to go through the wholesaler?' We are actively involved in those discussions."