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As the levels of uncertainty are rising in the supply chain and
the constraints keep growing, the management of availability
and quality of products is getting challenging. In the beverage
business, it's hard to have a conversation about product
inventory or supply chain without bringing shelf life into
consideration.
Shelf life is a rather complicated topic when it comes to running
a beverage business. At the core of this business, your shelf
life should be able to support the safety and quality of your
beverage. The brand's reputation is impacted by retailers and
the sustainability of your beverage business.
What is shelf life?
Shelf life is defined as “the period of time during which the food
product will remain safe; be certain to retain its desired sensory,
chemical, physical, microbiological, and functional characteristics;
where appropriate, comply with any label declaration of nutrition
data, when stored under the recommended conditions.”
The endpoint of your beverage shelf life needs to be determined to
ensure that the sensory profile and quality of your product are maintained.
Moreover, to meet quality specifications, your beverage needs to comply
with the guidelines of the industry and best practices that are established
by a variety of government levels, retailers, and labeling organizations.
Whilst there is no federal law required for products to have “sell by” or
“best by” dates, companies must follow all safety rules and standards
and maintain truth in advertising for every product they sell. The shelf life
of your product should be shared with your retailers and distributor
partners.
How do you measure shelf life?
A shelf life study that is well designed can be helpful to brands to avoid the risks and
meet requirements while optimizing their product's shelf life as a result supporting the
sustainability of their business and environment.
Moreover, while looking at a product and the food safety standards, many beverage
brands are well aware of how well their product manages its appearance, smell,
taste, and texture over time. After conducting a sensory analysis at various points
provides data that ensures a consistent and satisfying customer experience.
How do you manage shelf life?
As you consider shelf life, beverage brands have to think through the trade-offs
between the risk of having a larger quantity of product that may need to be gotten rid
of from the shelves due to expiration dates approaching resulting in loss of revenue,
out of stock situations at retail, and potentially the loss of customers.
It is not much of a challenge to plan for products that have an extended shelf life,
high order frequency, and high demand volume as the risk of obsolescence becomes
very little; however, shelf life planning and management of the inventory of the products
with more infrequent orders and lower order quantities are trickier. If your business
has an inventory nearing its shelf date, then it is time for you to prioritize orders for
high volume business partners or offer deep discounts that incentivize product
orders in an effort to compensate for a portion of their production cost.
The High Cost of Out of Date Products
Your inventory that has reached or is approaching its best before date can result in
the creation of significant costs and hassle for beverage brands. Distributors and
retailers are doubtful of buying products that are nearing their end dates because
they do not want to be left with products they cannot sell. That would mean that the
sales would be forfeited and many factors would destroy the out-of-date product.
So while some brands may feel the dire need to bring down costs by exceeding
their product manufacturing than required, there are risks that come with letting your
beverages get too close to their sell-by date.
A Comprehensive Approach
The planning of shelf life and execution enables you to recognize and plan for risks
throughout your supply chain that could affect your ability to deliver your product
while decreasing the risk of carrying obsolete inventory.
There’s no one-size-fits-all formula to follow. The management of product inventory
requires a detailed end to end process that collects together data and insights from
every business area, that includes the development of products, assurance of
quality, procurement, logistics, sales, customer service, and management of inventory.
As beverages contain more complex ingredients and create cleaner functional
formulations, the shelf life challenges increase.
Navigating Supply Chain Challenges
Though shelf-life planning is a very complex part of the beverage system and its
management now is not the time to oversee it. The crisis of the economy, the
pandemic, and other critical times affect the supply chain. It is a critical time to rethink the sourcing and production practices and come up with ways to optimize and more effectively manage your supplier network to become more proficient at forecasting demand.
Feel free to reach out to get help with sourcing ingredients for your current or next project!