Building better: sustainability in CPG
Globalized and highly competitive, the CPG industry has remained eternally resilient; however, emerging trends are set to significantly impact demand and potentially open new revenue streams. Pressure from mergers, the growing population, and shifts in consumer attitudes have transformed the landscape. Meanwhile, retailers demand that manufacturers lower their prices, causing profit margins to become even more strained.
Many of these concerns are simultaneously felt by machine builders servicing the industry, who seek to tackle complexities brought on by intricate production processes and supply chains all while helping their customers sustain brand trust as brand loyalty declines. Additionally, with waste reduction and carbon footprint considerations moving to the forefront of public awareness, many OEMs have begun their digital transformation journeys. By building flexible, more adaptable machines, manufacturers can help CPG address shrinking profit margins while reducing their environmental impacts.
Shifting consumer demands
In CPG, it is especially important to acknowledge geographic disparities. Population growth and increased awareness surrounding personal well-being are shaping demand in CPG over the next decade. The UN predicts the worldwide population will expand to 8.5 billion by 2030, with most of this growth to be driven by developing and emerging markets. Consequentially, many of these consumers will not have much disposable income. Approximately 55 percent of the global population lives on $5,000 USD per year, which accounts for around 1.5 billion consumers.
Simultaneously, sustainability is a wide topic in CPG since it encompasses a multitude of different aspects. High volume throughputs impede the modernization and greening of the supply chain. Regulation and personalization drive the push towards sustainable packaging. And factories are increasingly looking to reduce their CO2 emissions due to pressures from consumers and stakeholders alike.
Sustainable packaging has become a hot topic for the CPG industry. Brands understand the importance of labeling and packaging to catch the consumer’s attention, leading to many packagers manufacturing a heap of different packages for the same type of product. Additionally, EU governments now require less plastic, more recyclable materials, and even changes to the packaging, such as shampoo caps that can’t fall off of shampoo bottles.
As a result of the increasing complexity of packaging, many global enterprises have opted to introduce simulation technology to monitor and manage package quality. In turn, machine builders must be prepared to support these functions. Much like how packagers have begun relying on technologies like the digital twin to ensure sustainability and quality for their products around the world, machine builders can implement a comprehensive digital twin to simulate the testing process of machines that can keep pace with the high volume of packaging CPG brands need to stand out from one another.
Through implementing new technologies at their disposal, a Norwegian industrial manufacturer built and delivered one of the world’s fastest patching machines in half its usual time. Putting the advanced machine engineering digital thread to use, they replaced all the pneumatic drives with servo drives which had a huge impact on the machine’s energy consumption, reducing consumption by 30-35%.
The comprehensive digital twin further aids the digital thread by adding to the data insights from the production floor. When used in conjunction with AI technologies, digital transformation can go into hyper speed. The simulation-driven design process makes the whole innovation process a lot faster and easier; a requirement as CPG puts more emphasis on personalization and accelerates its already high product volumes.
Preparing for tomorrow’s problems today
Many companies in the CPG industry are reluctant to enhance and digitalize their processes through software and automation. The industry fears that implementing new technology may impact downtimes and increase operational costs. The idea that doing things how it’s always been done appears safe, but the current landscape requires a revolution in the way companies develop, manufacture, and source their products.
The industry needs to implement fresh, flexible, and scalable digital solutions to meet both its current and future goals while overcoming obstacles that are primed to become more complex as the population grows, ecosystems evolve, and trends emerge. To learn how your business can keep up and grow alongside the turbulent CPG industry, listen to our experts speak on digital transformation here.
Siemens Digital Industries Software helps organizations of all sizes digitally transform using software, hardware and services from the Siemens Xcelerator business platform. Siemens’ software and the comprehensive digital twin enable companies to optimize their design, engineering and manufacturing processes to turn today’s ideas into the sustainable products of the future. From chips to entire systems, from product to process, across all industries. Siemens Digital Industries Software – Accelerating transformation.
