Find cost savings during a supply chain crisis
It’s time to check the math; how bulk glass could be cheaper than boxed items
Gas prices are rising, inflation is rising, and glass supply chains are jammed. The result is escalating glass bottle prices in a market where consumer demand for wine has exceeded the available supply of glass bottles, making it one of the biggest headaches for establishments. wineries and one of the hottest topics in the world of wine packaging.
Most medium to large sized wineries use crate items for their bottling process. Traditionally, the purchase cost and return on investment of purchasing a bulk glass depalletizer has been out of reach for these wineries. But with the current economic conditions facing the industry, now is the time for these wineries to do their math again!
“Now that the numbers have changed,” says Marty Sychowski, a 30-year packaging industry veteran and packaging consultant for Smart Plastic Technologies, “mid-sized wineries can offset the cost of equipment with Savings from buying glass in bulk The return on investment on equipment is better than it has ever been and they can get back to their return on investment in 3 years or less.
Current market conditions
Broken supply chain – Consumer demand for wines and spirits has increased since 2020, which means that the demand for glass has increased at the same time. Simultaneously, glass supply has shrunk by 20%, creating the perfect storm for wineries and distilleries. 30% of the glass in our industry comes from China. With the continued shutdowns inside China and massive delays at US ports of entry, the glass supply lead time has doubled. Add to this the rising cost of transport and the wine and spirits industry faces unprecedented challenges.
The cost of goods is climbing with no end in sight
- fuel cost
- cost of corrugated packaging
- Labor cost
These are the three main elements involved in determining the cost of cased items, all of which have increased exponentially over the past year and show no signs of slowing down. This means that it is time to review the feasibility of bulk glass.
Sychowski says, “Many medium and large wineries are seeing the cost of glass go up by as much as 50%. Using bulk glass can save money in several ways, and those savings make it much easier to justify purchasing equipment. »
This is confirmed by the Food Institute’s recent report that glass prices have risen 45% since 2019, exacerbating the pressures wineries are already feeling due to the negative impact of the pandemic, labor shortages work and forest fires.
ROI in 3 years to 18 months – Yes. You read correctly. When you do the math, the cost savings, efficiency and carbon footprint reduction for bulk glass far outweighs the initial temporary cost of the equipment needed to convert your lines from cased glass to bulk glass. . In fact, with the rising cost of goods throughout the supply chain, many companies are finding that what they previously calculated as an ROI of 5-6 years is now an ROI of 2 to 3 years! Some wineries have even found it to be an 18 month payback!
The big picture
Converting lines to bulk glass has great advantages throughout the process.
Supply chain efficiency – Currently, US glass makers cannot make glass fast enough to meet demand, not just because of volume, but because of storage. If more end users order glass in bulk, the production line and execution moves even faster to the manufacturing side. Loose glass offers the advantages of reduced storage space and the possibility of using a common mold for many packages without having to store leftover dishes in a specific box. All of this takes up time and space on the production floor. If it was just bulk glass, manufacturing becomes faster and more efficient, which means you have better and faster access to your product – the bottles.
Reduction of your carbon footprint – Consumers care about sustainability and social responsibility. Reducing your carbon footprint has great benefits. Bulk glass offers a perfect solution – not only is it responsible, it also saves you money! Buying in bulk removes an entire step from the supply chain and leads to a massive reduction in cardboard. Reducing waste is the number one thing all wineries and distilleries can do to positively impact their sustainability. Double handling and, in some cases, box-to-box packaging can be eliminated along with the waste generated by these processes. Imagine being able to reduce your cardboard waste by 50%! That’s what loose glass versus coated glass will do for you.
The silver lining
In the middle of a horizon of storms, there is a silver lining. Medium and large sized wineries have the opportunity to capitalize on time and pivot, putting themselves in a prime position for growth. “The good news is that wineries can now handle the glass themselves,” Sychowski points out, “eliminating inefficient extra handling costs passed on to suppliers. Today, when a winery considers using bulk glass, the equipment return on investment is almost twice as high as it has ever been.
“The only regret you’ll have about converting reshippers to bulk is that you didn’t do it 5 years ago,” says Michael Deltuva, industry development manager for Copper Cane Wines & Provisions.
Sychowski recommends speaking with EMS GROUP UNITED STATESthe leader in handling, palletizing and storing goods and materials, to understand the equipment needed to internalize this process.
“EMS Group works with wineries to help them determine if bulk glass is the best solution for them. But whatever their need, EMS has the ability to provide them with equipment that works for bulk or sheath glass and improve their efficiency on their production line. We can even use the same depalletizer for bulk glass and enveloped glass. says Beth Zarnick-Duffy, Executive Director of Sales.
By reevaluating past equipment ownership costs to automate your bulk glass lines, you can save money while positioning your winery for increased production capacity to meet consumer demand. It’s something to raise your glass!