The hub aims to bring about faster response, quality and collaboration in the company's supply chain. Coming up with new bottles and packaging products are also important functions of the centre. That means that consumers can also look forward to customised products with a shorter lead time, says Joy Rice, supply chain director, Diageo. In this interview with Campaign Asia-Pacific, Rice talks in detail about the hub’s key focus and outlines how it will operate.
How will the hub enhance Diageo’s packaging capabilities—what are some of packaging changes or additions consumers can look forward to?
The Singapore supply hub plays an important role in supporting our supply chain across the entire region. In relation to packaging, the newly opened technical centre, our third supply support facility in Singapore, will enable us to develop and test specific packaging for some of Diageo’s most important brands, especially in the super premium categories.
Today, Asia-Pacific has 3.5 million high net worth individuals, more than anywhere else in the world, and currently accounts for 63 per cent of the total world spirit volume consumption. There is a growing demand for premium, customised offerings and, from a drinks supply chain perspective, this translates to developing high quality and often complex, multi-component and substrate packaging that requires robust testing and supplier engagement. We will continue to launch new packaging across the globe and, specifically, through Singapore.
Will Diageo be designing packaging within the hub?
Our Singapore supply hub comprises three supply chain support facilities—Distribution and Finishing Centre, Super Premium Finishing Centre and the Asia Pacific Technical Centre.
The Super Premium Finishing Centre affords us the flexibility and ability to deliver on limited quantity orders of increasingly customised and premium products with a shorter lead time than if orders were coming in from Europe, for example. It allows us to respond with agility to fast-moving markets and developing customer preferences.
Our new Asia-Pacific Technical Centre’s responsibilities will evolve around packaging development (working with suppliers to turn a design concept into a product) and in quality assurance with specialised processes in place to evaluate complex, super premium packaging to ensure they meet Diageo’s stringent quality guidelines.
What is the hub currently working on?
One of the first projects is to leverage the capabilities of all three facilities within our supply hub and the work undertaken to support the launch of the John Walker & Sons Odyssey, a special-edition blend that is contained in a bottle that appears to be suspended within a cabinet. That packaging comprised 80 individual components and the design and commercialisation was recognised with the award of the ‘Prix du Jury Formes de Luxe 2012’ by international luxury packaging title Formes de Luxe for best luxury packaging.
The specific capabilities of the Asia-Pacific Technical Centre will help us ensure the ready availability of limited-edition, super premium products that are made to the highest quality, to respond at a fast pace to consumer demands in Asia-Pacific.
Our Distribution and Finishing Centre serves as an import and export facility and helps us to ensure stock is kept as close as possible to our customers in the region. It is also where some products are repackaged with market mandatory labels to adhere to the import regulations. It is an important element in our supply chain that enables us to play and win big in the fast-moving regional markets.
The hub is reportedly involved in certain ‘brand changes’, what are the initiatives under this?
‘Brand change’ could refer to a range of initiatives, from developing new packaging concepts to the commercialisation of liquids and tweaking of drink recipes to suit each market’s specifications—all of which can be managed on-site in Singapore thanks to the capabilities that we have developed within the Technical Centre. Brand change covers the spectrum of change activity across liquids and packaging that might range from a minor label change on an existing format through to a new-to-world liquid or packaging proposition, all of which can be managed on-site in Singapore thanks to the capabilities that we have developed within the Technical Centre.
How much has Diageo invested in this unit—which other countries/regions have similar hubs?
We have not disclosed the total investment amount but the technical centre does represent a state-of-the-art, high-tech facility in our portfolio. We have recently established a Technical Centre in Panama. Both Technical Centres in Panama and Singapore reflect the growing importance of fast-growing emerging markets for Diageo and the need to grow our capabilities in these markets, which we remain focused on achieving.
Does the hub’s function include research and consumer insights?
No, the hub will not conduct consumer research. It is set up to be a centre of supply chain excellence for Diageo in Asia-Pacific with a unique blend of capabilities to capture key growth opportunities in the region, which are primarily driven by the luxury and emerging middle class (EMC) markets. As mentioned, our three supply chain support facilities will enable us respond quickly to volatile regional demand, meet the increasing demand for super premium and customised products especially during gifting seasons and run liquid and packaging tests to maintain consumer satisfaction in our high, exacting standards for product quality.