Why co-packers will be the heroes of online grocery

Today, online grocery purchases make up a modest percentage of the larger grocery market. Research shows this is expected to climb above 20% by 2023, which means products sold through ecommerce must be packaged to endure a more complex supply chain.

This gives co-packers a unique opportunity to take the lead. Before the internet, and the pace of change that it brings, many brands and retailers could handle research and development, product development, and even packaging in-house. But with speed to market becoming increasingly imperative and challenging, agile copackers have evolved to become a total end-to-end resource and partner towards growth for their customers.

So, what makes co-packers so uniquely positioned to provide ecommerce solutions? How can they ensure productive relationships with brands and packaging manufacturers?

The co-packer model: flexible, innovative and fast

Ecommerce has brought about a range of new requirements for brands and retailers. They need to position themselves for growth by increasing speed to market for innovations, offering promotional low volume campaigns and more product varieties, and think through optimization of packaging for this new channel. At the same time, they need to maximize efficiencies and drive down costs to keep profitability up.

The co-packing world is uniquely positioned to satisfy these needs as it is built around flexibility, agility and resourcefulness. Since copackers often work with a range of customers and products, their operations are designed to handle variety, which makes them the ideal partners to supply brands with ecommerce-ready packaging quickly, and without a significant capital investment. They provide a home for smaller volume runs just as they do for larger volumes.

Where once, the relationship between co-packers, packaging suppliers, and brands was fairly transactional, today co-packers have become an indispensable source of ideation and collaborative partners in innovation. Since they have smaller operations with smaller volumes and fewer people involved in the decision-making process, ecommerce-ready packaging innovations can be adopted more quickly. This is incredibly exciting for a packaging supplier like Amcor and for brands and retailers alike, as it can streamline the path to optimized packaging for this new channel.

This is especially important as products delivered through ecommerce face a more complex journey to the consumer. If a package leaks or breaks along the way, all the resources that went into the product are lost – and that’s unacceptable. One of Amcor’s top priorities is designing ecommerce-ready packaging that gets products to consumers safe and fit for their intended purpose.

Related read: Is your packaging ecommerce ready?

Who benefits from collaborating with co-packers to achieve online growth?

Collaborating with co-packers for ecommerce bound products is particularly beneficial for smaller brands and start-ups, that are now able to achieve greater visibility and have less barriers to entry, thanks to online retailers such as Amazon. Co-packers and ecommerce-ready packaging enables these entrepreneurs to manufacture and distribute products to a wider audience beyond their traditionally regional area.
But bigger brands can also benefit. Co-packers can deploy new product varieties more rapidly than large scale food producers, for example, whose fill lines are dedicated to pumping out millions of bottles of a single variety. Copackers with nimble operations can tailor differentiated products for the growing, more adventurous consumer that shops online. Brands can continue to run their dedicated lines, but for those smaller volume, ecommerce dedicated food items, leverage co-packers. For example, a uniquely seasoned ketchup that uses fresh, local ingredients instead of the traditional ketchup brand.

Brands are not the only ones to benefit. Co-packers themselves, with their own private label brands, will now have an opportunity through ecommerce to reach a larger audience. Their well-loved regional labels will be accessible on a national or even global scale. In the same way that online music platforms are providing exposure to talented but unknown artists, online grocery retailers can launch a small brand into the cupboards of every home in the US.

Employing a collaborative effort as ecommerce grocery evolves, benefits everyone involved including the end consumer, who expects new, differentiated, more sustainable products to be delivered faster than ever before and without any defects. It’s vital that the co-packer, packaging company, brand and retailer come together while e-grocery sales are still between 3-5%. Doing so means identifying challenges and implementing improvements before online grocery sales triple in the next few years.

Related read: Omnichannel packaging: The future of ecommerce

It’s clear that co-packers are in a unique position to not only help CPG’s brands and retailers thrive in the area of ecommerce, but to also grow their own brands. The key takeaway is this: as consumers gravitate toward online grocery; brand owners, co-packers and packaging suppliers must seize the moment to partner on developing ecommerce-ready, consumer-centric solutions.

True success comes when there is collaboration between all parties involved in the journey from initial product idea right through to the moment a consumer unboxes the item at home. Together, we can work through new challenges and develop solutions that benefit all parties, so as online grocery sales sky rocket, we are primed for success.

Are you a co-packer or brand that is interested in finding out more about working with Amcor?

Get in touch via our contact form to find out more about how to get your packaging ecommerce-ready.