“Today’s demands in the confectionery industry are centered on seasonal variations, with the number of enquiries and orders increasing around holidays such as Easter or Christmas. In addition, these variations are often connected with sports events or promotional campaigns organized by the manufacturers themselves. The more successful a sales campaign, the more goods have to be picked and distributed within a very short time,” Kim Gravesen, managing director of Nagel Danmark A/S, the Danish subsidiary of the German food logistics firm, told ConfectioneryNews.
He predicted that seasonal variations would play an even bigger role in future, and that to adjust to this seasonality, just-in-time delivery would increase in importance.
Key to handling the administrative and operative processes that go hand in hand with these challenges is the implementation of highly efficient IT systems, to intelligently manage equipment and workforces, he said.
“Within the Nagel Group multi-site IT services all processes, such as warehousing, transport and value added services, are closely interlinked and have a track record of proven interfaces,” he said.
Another way in which the logistics group has responded to this trend is by adding value added services to its warehouse processes. For instance, for the anniversary promotion of a confectionery producer, it put together several items to create a promotional multipack. These packs were then placed on POS display units, along with flyers and promotional cards. Other services include price or promotion labelling.
Offering co-packing services has also enabled the group to turn this challenge to its advantage.
“Cases sometimes need to be adjusted in their composition unexpectedly and at short notice, which requires flexibility. Our clients can decide at very short notice if, for instance, they want to put more nuts, dark or white chocolate on shelf.”
New confectionery contract
These comments were made in the context of a new confectionery industry contract win for the Nagel Danmark. The Nagel Group’s Danish subsidiary has just taken over the warehouse management, order picking, transport and distribution for confectionery distributor DK-Konfekture K/S, which represents brands such as Ritter Sport, Katjes and Fazer.
“Due to relations between Ritter Sport and the Nagel Group [in Germany] we were included in the tender for distribution and warehousing in Denmark,”explained Gravesen.
Under the agreement, 23,000 pallets of confectionery products - chocolate, sweets, lollies and liquorice - will be processed annually in Padborg, the headquarters of Nagel Danmark. After being registered at inbound goods, items are repacked onto quarter or full pallets, and distributed via daily scheduled transport to wholesaler and retailer customers.
A network which includes two sites, three depots, more than 47,000 m2 of warehousing space, 500 trailers and 140 trucks, along with the ability to arrange a warehouse with a temperature range of 12-15°C at very short notice, were deciding factors in awarding the contract to Nagel.
“DK Konfekture benefits from the experience and know-how of the Nagel Group and Nagel Danmark regarding the handling of temperature regulated products, especially sweets. Moreover, thanks to Nagel’s dense distribution network, they have short routes to their customers,” said Gravesen.