RETAIL READY PACKAGING – WHAT'S IN IT FOR FOOD MANUFACTURERS?

Abstract

Process of concentration in retail market, as well in Croatia as in other European countries, has insured forretailers stronger negotiating position in fast moving consumer goods supply chain, especially in food chain.Retailers have initiated retail supply chain management - a lot of different cost efficiency processes in foodsupply chain which they were able to force with their suppliers, usually with the absence of an equitabledistribution of savings that this collaboration enables. One of these is development of retail ready packaging forfood products, designed from manufacturers’ side with main intention to reduce in store labour cost for stackingproducts on shelves. Goal of this paper is to investigate if food manufacturers can, and how, turn retail readypackaging into their own advantage instead of looking to this trend only as a factor that causes partly higherproduction cost.Paper analyses supply chain and marketing aspects of change from ordinary packaging to retail readypackaging. Questionnaire study in Croatian food manufacturing companies was conducted, that revealed somepotential for improvement of manufacturing echelon of supply chain when it comes to retail ready packaging.On-line questionnaire was distributed to all Croatian food manufacturing companies that manufacture productssold in retailing.Research has shown positive connection between size of a company and degree of its retail ready adoption,as well as between start of significant RRP implementation and entrance of foreign retail chains in Croatia. RRPinfluence three kinds of costs for manufacturers, and main benefits of RRP for manufacturers are focused onshelf visibility, product image and relationships with retailers.Regarding research limitations, study was conducted only in Croatian companies, and sample does notcover equally all branches of food industry. Regional survey would give a clearer view on retail ready packagingrelationships in international food supply chains.Paper clearly indicates contemporary relationships between retailers and manufacturers in food supply chainregarding retail ready packaging, where retailers demonstrate all their capabilities drawn from retail supply chainmanagement. Additionally, paper argues that there is a good possibility for manufacturers to use advantages ofretail ready packaging mostly from its advertising function as well from certain supply chain possibilities.

Key words: retail ready packaging, food supply chain management, food production industry, food retail trends