February 25, 2022
After six months of speaking to multinational and co-manufacturers of chocolate and bars all over North America, we’re still seeing our clients facing the same market demands – micro-segmentation leading to an ever-increasing demand for a wider range of SKUs.
Anecdotal evidence, backed by broader industry data from consumer packaged goods (CPG), is that businesses are adding to their inventory and product ranges to meet the demand for more diverse products. According to McKinsey, new products appearing on shelves have almost doubled in twenty years, from 20,000 in 1996 to 39,000 by 2016. In 2019, snacks, bakery foods and beverages were the top three food categories for new products, accounting for 42.7% of all new products on the shelves. These categories, which of course include bar and chocolate manufacture, have been in the top five since 2012.
While speed in this environment is crucial, perhaps just as important is simplicity and efficiency – minimising the waste, both of time and raw ingredients, that comes with the shorter runs, more frequent changeovers and more downtime of manufacturing more SKUs. If the demand for product variety continues – and there are no signs of anything changing soon – manufacturers should look for ways to innovate.
The SKU proliferation trend creates business risk for those who are leaping into creating new products and those who are holding back. The first because adding items to their offering means manufacturers risk blowing out costs, as manufacturing becomes less efficient and new products make older SKUs less saleable, creating obsolete inventory. The costs of R&D also increase, and for many facilities, more changeovers mean more hands-on time too – a major problem in this period of extreme labour shortages in manufacturing.
For manufacturers who stick to their few tried-and-true products, the risk is different but equally as urgent. As the market moves on, demanding smaller runs of a wider range of products, they may be left behind.
The solution to both of these issues is to facilitate simpler, faster and more efficient manufacturing first, rather than just launching a wider range of SKUs.
Our V20 melter was developed with that in mind. We drew on discussions with clients of all sizes and months of R&D, adding to our decades-long history of innovation and improvement.
The result is an incredibly powerful melt system that can increase production while lowering costs.
Fred Grep, Director of Engineering at US-based Hearthside Food Solutions has been using PTL equipment since the earliest days of his business, which gave him a competitive advantage right from the start.
“It worked out well because our modifications were changes our customers wanted to see. By getting them first, it meant Hearthside was ahead of the game,” he says.
Here are just some of the ways the V20 melter can do that.
Boasting up to 125% higher melt rate, the V20 offers innovative instant-melt functionality, delivering continuous supply to speed processing and increase downstream production rates. Producing more bars or chocolate in a shorter time means you maximise the potential of your facilities and staff.
There are different Melter V20 designs based on your production rate, product type, and format. The workings of the unit can be modified to…. The melter itself is more flexible too – its small footprint and ‘plug and play’ design means you can easily move it around your facility, widening your options for how and when you use your equipment.
More SKUs mean more changeovers, and speed becomes even more important. The V20’s removable melt grids and easy-wash design make it simple to clean between products – even if you’re dealing with allergens. That limits the line downtime and maximises efficiency and production.
Similarly, its smaller footprint means it can be set up right by the equipment use point – no need for long product pipe runs, which slows production time and adds significantly to the cleaning process.
For bar and chocolate manufacturers, ignoring the micro-segmentation trend and focussing on just a few SKUs is no longer an option. But simply introducing more SKUs without an eye on how to manage the accompanying time, complexity and cost increases isn’t an option either. The solution is to consider how a wider range of products will impact production time, costs and labour requirements, identify the core areas for concern and take steps to mitigate those potential issues.
Investing in new machinery can play a key role here, whether you’re ready to upgrade equipment across your facility or simply cherry-pick units for replacement. Look for machinery – like our V20 melter – that can solve some of your most immediate challenges with impressive flexibility and usability. Seemingly simple design features – like removable melt grids or a smaller footprint – can deliver the efficiency improvements that are so critical for SKU proliferation.