When you think of food and beverage brands you likely think of the big consumer goods brands like Nestle, Unilever, Tyson, Coca Cola and others. Many of the new, smaller food and beverage brands are offering shipping for products that you wouldn’t normally have shipped to your front door in the past, rather you would likely go to a retailer or a grocery store to purchase the product.
This has created an uptick in shipping and fulfillment for CPG (consumer packaged goods) products. Not all fulfillment providers are equipped with the specialized needs a food and beverage brand needs. Some of the major considerations include: FDA certification, specialized environments like temperature or humidity control, and expiration date monitoring.
Partnering with a 3PL or fulfillment provider who can provide speed, accuracy, and the right warehouse conditions is also key to staying competitive in your industry.
How is CPG different from Food and Beverage?
Food and beverage is a category under the larger umbrella term, CPG (consumer packaged goods). Food and beverage brands make anything that is consumable or shelf-stable products that are repurchased often like snacks, drinks, sodas, laundry detergent, pet food, cosmetics, the list goes on. The major product categories that fall under CPG include health and beauty, food and beverage, housewares, pet, office supplies, and toiletries.
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Expiration
Probably the biggest differentiator for a food or beverage brand is the fact that there’s an expiration date. This makes it more difficult to effectively manage food and beverage inventory.
All food and beverage items should be shipped out well before their expiration date to ensure maximum freshness and food safety. A fulfillment center needs to have technology that can monitor which pallets have which expiration date.
Working with a 3PL, make sure they have a technology suite that can match each SKU with the expiration date. These need to be monitored in regards to the customer’s business rules. For example a seller might denote that their product’s expiration date needs to be within six months to one year window when their 3PL receives it. The 3PL then needs to have a process in place where at the time of receiving the expiration date is captured and aligned with the SKU number. It should also include the technology to be able to track those data points without the end-customer knowing or seeing either.
Related to the expiration date is tracking which products need to move out first in order to not be stuck with expired products. This is called FIFO (first in, first out) and is a system in which the most recent stock received goes to the back of the line. Anything already in the warehouse will go out first before the newest batch is dispatched out to customers.
Lot Control
Closely related to the expiration date is lot control. Each bundle of products (it may be a pallet, a case, or an entire shipment) will be assigned a lot number. This lot number is important to be able to track for many reasons. First it’s an easy way to bundle all of the products with the same expiration date. Second, it’s an easy way to trace specific products if there’s ever an issue. Lot control is part of any food safety plan. If someone reports they got sick from a particular item, it’s easy to then trace which lot it came from. The seller can either notify those who may have also received an item from that lot, or discard any of the remaining lot that is still in the warehouse.
To ensure both the expiration date and lot numbers are easily tracked, 3PL must have a robust technology suite. Relying on a computer system to manage the SKUs, lot numbers, FIFO process and more means there will be less human error attached to any products going out that shouldn’t.
Simultaneously a 3PL must have the capacity to deal with any products that are passed their expiration date. If sales are low, and stock hasn’t been going out fast enough, there may be inventory that needs to be disposed of. Those products cannot just be thrown in a dumpster, there are specific processes that need to be taken to dispose of it correctly. That may involve taking the product to a quality control team or material review board (MRB) if that is available, put a hold on it (so that none can get shipped accidentally), and notify the customer that that inventory is expired.
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Using a 3PL that has multiple fulfillment centers in strategic locations can allow you to meet customer expectations for fast shipping. This is called distributed inventory and can help to reduce your shipping costs as well as enhance your level of customer satisfaction. This means that your products will cross fewer shipping zones so they will arrive quicker and more cost effectively than if you were to ship from only one location. It can also help if you have perishable products that need to reach your customers before they expire or spoil.
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Regulations and Certifications
All food and beverage brands must comply with the FDA on their packaging, labeling and their overall product. Depending on their specific products and their classification, some food or beverage items may also need FDA approval for their storage as well.
An FDA certification is the most in comprehensive standard that a fulfillment provider will need to get. It requires registering the facility as a compliant environment and having regular facility audits done by authorized people. It includes strict FIFO and FEFO inventory management procedures, as well as documented quality control. Not all 3PLs have an FDA certified facility. Although some 3PLs might be open to acquiring this certification for the right customer partnership.
A second class of regulation is a food and beverage certification. This is less strict, less comprehensive, but will allow a 3PL or fulfillment center to store some types of consumable products. Although less strict than a full FDA certification, this proves that the facility is aligned with food-grade systems, processes, and environmental controls. A food and beverage certification will have significant variation from state to state within the US.
Temperature, Humidity Control
It’s a food-safety hazard if food or beverages are heated or cooled too often to temperatures that are unsafe. Temperature and humidity control are very important to many food products and beverages. If in an uncontrolled space, food may grow bacteria or have other issues that can result in food-born illness. To ensure products remain at the appropriate temperature, there needs to be an uninterrupted and unbroken “cold chain” of production facilities, storage, and transportation. Shelf-stable products are exempt from needing these environmental controls.
Along with the ability to control the warehouse environment, a 3PL also needs to be able to track the temperature and humidity. It’s part of any food-safety plan to regularly check and chart the temperature in case any issues with the product arises. If there are issues, any temperature log may be able to provide evidence for why the issues occurred.
Questions to Ask Your 3PL
Some 3PLs may have more capacity to provide services to a food and beverage brand. It’s important to know the right questions to ask in order to assess if your 3PL is the right match for your product. Here are some of the top questions you should be asking before signing any contracts.
- Are you certified to store and ship food and beverage items? Which certifications do you have? Are they FDA approved?
- What is the protocol if an expired product is found in their warehouse? Do you dispose of the product? And are there liability fees for that?
- Are your facilities temperature, humidity controlled? If so how do you monitor and track the environment for that control?
Not all 3PLs have the ability to store and ship food and beverages due to the specific needs these products have. It’s likely that more traditional 3PLs don’t have these capabilities, but it is becoming more of an ask and a requirement especially in CPG brands.
If you are looking for excellent fulfillment services for your CPG brand, we want to hear from you. Reach out to our team and get a quote. DCL Logistics provides growth opportunities for many CPGs, including food brands, health and beauty products and more. See how our team helped Magic Spoon maintain excellent customer loyalty through streamlined fulfillment.
Tags: Expert Advice & Tips
