PepsiCo testing semiautomation in repacking

Bottling company collaborates with supply chain to add speed and flexibility in creating variety packs and variety display pallets. Costs could be cut by 10%, with a 30% rise in output.

PepsiCo Inc. is about to launch a pilot project involving contract packaging that would semiautomate some repacking operations on variety packs for its Gatorade brand. The bottling giant hopes to begin test operations in April, citing four objectives: Foremost, validate that basic variety packs, sold in sufficient volume, can be assembled using some

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automation in a standardized repacking-line process that can accept multiple package sizes and configurations. Additional goals are to reduce both costs and the potential for product damage during packout, and also to boost Gatorade sales by providing shoppers with more product options in compact display areas inside stores.

Michael Bilton, national customization manager at PepsiCo, tells Contract Packaging the company’s cost-benefit analysis projects that semiautomated repacking could shave the company’s production costs by at least 10% while also increasing production output up to 30% for Gatorade variety packs. These benefits result from a reduction in manual labor and improved production line capability and reliability.

Jacobson Packaging and Manufacturing Co. (www.jacobsonco.com), a PepsiCo repacker, will produce the test variety packs, and also variety pallets, which are built by mixing single-flavor trays. These packs will appear in club stores in the Northeastern U.S. If the project proves successful, Bilton says, the company might expand semiautomated repacking to its 10 other repackers around the country.

Success could have huge implications for semiautomated repacking in general at a time when product manufacturers frequently need to change multipack configurations. Contract packagers that perform repacking services also could benefit significantly by introducing another value-added service.

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Shoppers and retailers today want continually fresh merchandise in stores, and PepsiCo is representative of the growing number of product manufacturers turning to contract packagers and others in their supply chains to find new areas to automate production and introduce more flexibility in packaging formats.

“Our customers—the retailers and the club stores—are becoming much more customized,” Bilton says. “We’re trying to provide differentiation from our competitors.”

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