Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH

 
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
Strengthen Brand Loyalty
by Digitizing Consumer Engagement
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
TABLE OF CONTENTS
Chapter 1: Introduction to Infant Formula Market....................................................................... 3

Chapter 2: Challenges and Opportunities.................................................................................... 7

Chapter 3: Consumer Engagement, the 4E Model......................................................................... 10

Chapter 4: Digitize Consumer Engagement................................................................................. 16

Chapter 5: Full Quality Inspection and Serialization with Laetus.................................................... 19

References:........................................................................................................................... 21
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
CHAPTER 1:
  INTRODUCTION TO INFANT
    FORMULA MARKET
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
Chapter 1: Introduction to Infant Formula Market

Apart from population growth, many other societal
shifts support the growth of the infant formula market.
Traditionally, children were fed with home-made food in the
majority of developing and underdeveloped countries. Since
the globalization and the emerging market evolutions, there
has been a population movement from rural to urban areas.
The change in lifestyle increased the demand of manufactured
infant food products. Moreover, due to the increasing number
of working women and dual-career households, parents are
open and willing to convert to more convenient practices of
feeding their infants with milk formula - across continents
and different cultures.

4 | Strengthen Brand Loyalty by Digitizing Consumer Engagement
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
Chapter 1: Introduction to Infant Formula Market

                                                             The rise of urbanization has paired with income
                                                             growth, household spending correlates with both urban
                                                             population and income increase. Parents are more aware
                                                             of adequate nutrition, through clinics, communities
                                                             and social media. The increase of health concerns led
                                                             to the development of organic infant formula products.
                                                             Companies adapted their strategy to penetrate the
                                                             market by having a range of product offerings, from
                                                             standard infant formula to high-end organic products,
                                                             which contribute to higher pricing and higher returns
                                                             for manufacturers.

Over the past 5 years, the significant growth of the
infant formula market was primarily been driven by
new product innovations for mid-level and high-level
product categories. Organic, probiotic, and goat milk
are the most popular innovations among baby milk
powder brands. Regarding the consumer behavior of
adopting new technologies and products, Asia-Pacific is
leading the market, as can be seen from the frequency
of new product launches, followed by the European
region. According to Allied Market Research, the sales
of infant formula products is largely concentrated in
APAC, occupying more than half of the overall world
market share5.

                                                          Strengthen Brand Loyalty by Digitizing Consumer Engagement | 5
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
Chapter 1: Introduction to Infant Formula Market

            The global market for infant formula is growing, yet the competition in this industry
                      is severe. There are more than 10 global players in the industry.

To boost market penetration, leading global
companies attach importance to the merger,
acquisition, expansion and partnership with local
producers, along with new product introduction to
enter new territory. This competitive characteristic
increases the market dynamic, incentivizing
companies to continuously develop and adapt
infant formula products and services that are in
line with their consumers’ requirements.

6 | Strengthen Brand Loyalty by Digitizing Consumer Engagement
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
CHAPTER 2:
  CHALLENGES AND
   OPPORTUNITIES
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
Chapter 2: Challenges and Opportunities

    Fake products and diversions always exist
    After the scandal of adding melamine - a raw
    material for the production of glues and adhesives
    – to the infant formula ingredients in 2008,
    Chinese consumers lost trust in domestic brands
    and instantly switched to pursue foreign brands.
    This dramatic demand shift and panic buying
    resulted in supply bottlenecks. Consequently,
    fake products and diversion occurred in the
    Chinese market.

    According to China Daily, Shanghai authorities               Recalls due to quality problems can be
    arrested nine people involved in producing and               harmful for your brand’s image
    selling fake infant formula products, found over
                                                                 Having to recall a product that has been
    20,000 empty cans and 65,000 counterfeit Similac
                                                                 distributed in the market is an absolute worst-
    labels8. Similac is a popular formula brand by
                                                                 case scenario for manufacturers, especially if
    Abbott, a US manufacturer. Nevertheless, with the
                                                                 consumers were already harmed by the product.
    fast growth of online retail channels, infant formula
                                                                 In 2018, Lactalis recalled 12 million boxes of
    products that had not officially been launched in
                                                                 infant formula in 83 countries due to the trace of
    a market appeared on the table of consumers via
                                                                 salmonella bacteria discovered at their production
    illegal online resellers or even via individuals.
                                                                 site9. European, Asian, Latin American, and African
                                                                 markets were all affected by this massive recall.
    In Germany, for example, the estimated damages
                                                                 55% of people claim they would switch brands
    from formula milk diversion exceeded 10 million
                                                                 following a recall10. Nevertheless, another leading
    euros per year from retail chains such as Rossmann
                                                                 manufacturer, Danone, said in 2016 that it would
    and DM6. For brand owners, fake products and
                                                                 no longer sell its Karicare formula in China after
    diversion bring enormous uncertainties for their
                                                                 sales of the product were hit from a recall related
    companies since they cannot easily predict when
                                                                 to a botulism scare in 2013 - that later turned out
    and how those products appear in the market, and
                                                                 to have been a false alarm.
    consumers can hardly distinguish those fakes from
    the original products.
                                                                 Recalls always affect manufacturers in several
                                                                 aspects simultaneously. Even encountering a false
                                                                 recall, manufacturers still need to react fast and
                                                                 in a responsive manner:

                                                                 Externally:
                                                                    • Brand owners need to recover from damages
                                                                      to their brand’s value and a loss of trust
                                                                      from consumers
                                                                    • Diversion of resources and expenses for
                                                                      proactive crisis management procedures
                                                                    • Potential lawsuits or claims for damages

                                                                 Internally:
                                                                    • The source of the problem must be found
                                                                      and solved for the future
                                                                    • Affected products that have already
                                                                      been shipped must be returned, retrieved,
                                                                      and replaced

8 | Strengthen Brand Loyalty by Digitizing Consumer Engagement
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
Chapter 2: Challenges and Opportunities

Regulations can vary across different
countries and markets
Infant formula is one of the industries that is
highly regulated across countries. Fulfilling legal
requirements is a challenge for companies that
have or pursue a global presence. Every country has
developed strict regulations for both: ingredients and
advertising. As an example, companies selling infant
formula products in Europe need to apply regulations
of the European Commission (EU) and regulations
of each European country. Also, in the US, formula
                                                                Trust from consumer is a common,
guidance and regulatory information are provided
by FDA, yet in addition each state has their specific
                                                                worldwide topic. Trust is the key
rules. New regulations are continuously resulting in            element that drives your sales and
stricter rules and impact manufacturers.                        your brand value
                                                                Brand owners are facing challenges in the infant
In 2020, EC legislations (2016/127 and 2016/128)                formula industry. Meanwhile, these challenges
discontinued the health and nutritional claim                   provide opportunities. For those who have
requirement on product labels, which caused a                   managed the challenges and move the extra
package redesign for all infant brands that are sold            mile towards the voice of their consumers, trust
in Europe. Moreover, different institutions oversee             has been enhanced and strengthened. Trust is
different areas of regulation. Take the United                  the key driver for consumers to continuously
States as an example, The Center for Food Safety                make purchases.
and Applied Nutrition (CFSAN)is responsible for the
regulation of infant formula. The Office of Nutritional           • When retailers and consumers know that
Products, Labeling, and Dietary Supplements                         brands are confident and transparent on
(ONPLDS) has program responsibility for infant                      their quality, as well as the origin of
formula. The Office of Food Additive Safety (OFAS)                  the production;
has a program responsible for food ingredients and                • When companies are moving beyond
packaging. ONPLDS evaluates whether the infant                      compliance and settheir bar higher with
formula manufacturer has met the requirements under                 their own independent standards for
                                                                    safety and protection;
section 412 of the FFDCA. ONPLDS consults with OFAS
regarding the safety of ingredients in infant formula             • When parents have more visibility of
                                                                    the ingredients so they can make
and of packaging materials for infant formula.
                                                                    informed decision about what they feed
Under sections 201(s) and 409 of the FFDCA, OFAS
                                                                    to their children
evaluates the safety of substances intended for use
in or in contact with infant formula. Being compliant           Manufacturers build brand equity and trust,
is for sure a resource and time consuming process               differentiating themselves from other players in
if an infant formula company tries to penetrate the             the industry.
market and at the same time be localized.
                                                                In a sensitive industry such as infant nutrition,
                                                                consumers usually carry out multiple searches
                                                                online and check within their communities
                                                                prior to purchasing a product for their children.
                                                                Hence, providing information and applying
                                                                consumer engagement before, during, and after
                                                                the purchasing process, is the most important
                                                                aspect that brand owners should consider in this
                                                                digitalized era.

                                                          Strengthen Brand Loyalty by Digitizing Consumer Engagement | 9
Strengthen Brand Loyalty - by Digitizing Consumer Engagement - Laetus GmbH
CHAPTER 3:
  CONSUMER ENGAGEMENT,
   THE 4E MODEL
Chapter 3: Consumer Engagement, the 4E Model

                                                                                     NEW BRAND
                                                OLD BRAND

               Enable                    Educate                      Evolve              Empower
           With the concept of customer centricity and digital transformation, companies in each and every industry have
           started to consider consumer engagement as a product offering or as a service. According to Food Marketing
           Institute, in 2016, 39% of surveyed consumers said they would switch from the brand they usually buy to another
           brand that provides more in-depth product information, beyond what is on the physical label. This percentage
           increased to 74% in 201812.
                         Enable                     Educate                      Evolve                 Empower
                         Would customers switch brands?

                                                                                 Then, what does consumer engagement refer to for
                         Enable                     Educate                      Evolve the concept,
                                                                                 implementing            Empower
                                                                                                             especially for infant
                                                                  No             formula products? And how can companies engage
                  Yes                                                            their consumers in an effective and continuous
                                 No
                                                    Yes                          way? The 4E Consumer Engagement Model will help
                                                                                 you set your objective in connecting with your
                         Enable                     Educate                      Evolveaudiences. Empower
                                                                                 targeted

                         2016                             2018

                         Enable                  Educate       Evolve       Empower
                                             The Consumer Engagement 4Es Model

                              Information requirements before dairy purchase, % of respondents'

               Product ingredients                        Manufacturing processes                           Sourcing practices

 Must know                                   Must know           25                                         21            21
                31   Enable     37       Educate                 Evolve     27       Empower Must know

                                                                 50                                          49           49
like to know    50                     Would like to know                   50         Would like to know
                                45

eed to know                            Don't need to know        25         22         Don't need to know   30            30
                19              18
           Millennials     All ages                       Millennials     All ages                      Millennials    All ages
                                                                      NEW BRAND
                                Note: Figures may not sum to 100%, because of rounding.
         'Question answered by 1,139OLD     BRAND
                                     consumers:  What are your main information requirements prior to purchase?

                                                                           Strengthen Brand Loyalty by Digitizing Consumer Engagement | 11
NEW BRAND                                                                                         Would customers switch brands?
                Chapter 3: Consumer Engagement,
                                      OLD BRAND the 4E Model

                                                                                                                          Enable                        Educate                       Evolve
                                                                                                                                                                                    Yes                          Empower
                                                                                                                                                                                                 No
                           Enable:               Enable            Educate            Evolve                     Empower                                                                                                        Yes

                           Packaging is aEnable       crucial part          of consumers’
                                                                      Educate          Evolve        access
                                                                                                        Empower

                           to goods. The purchasing decision is based on
                           intangible items        Enablesuch as        brand awareness,
                                                                      Educate          Evolve           and
                                                                                                        Empower
                                                                                                                                                                          2016                            2018
                           on tangible items such as price and product
                                                   Enable             Educate          Evolve
                           information. According                     to McKinsey          Survey Empowerof
                                                                                                                           Would customers switch brands?
                           consumers purchasing dairy products, the large
                           majority are in the category of ‘must know’ or
                           ‘would like to
                      Enable                         know’ aboutEvolve
                                                Educate                     product ingredients,
                                                                                               Empower
                           manufacturing processes, and sourcing practices                                                                                           No
                                        Enable                                Educate                              Evolve
                                                                                                                  Yes
                                                                                                                                              Empower
                                                                                                                                     Information    requirements     before dairy purchase,
                           in order to purchase products .                     11
                                                                                                                                    No                                        Information requirements before d
                                                                                                                                                       %Yesof respondents’
                           The goal of consumer engagement is to create a                                                                                       Product ingredients                        Manu
                           band Wouldbetween          brand
                                       customers switch  brands?owner and consumer, before

                           the purchasing decision has been made. Through                                                                          Must know      31                             Must know 2
                                                                                                                           2016                              2018              37
                           unique identities, such asNo QR code presented
                           on theNopackage ofYesinfant formula, parents get
                          Yes

                                                      Would customers switch brands?                                                                                                                           5
                           access to the “richer-than-packaging”                               information                                 Would like to know      50                   Would like to know
                                                                                                                                                                               45
                           by scanning the QR code with their mobile
                           devices
                                2016     and browsing2018         the connected website.
                                                                                                                                          Don't need to know      19           18       Don't need to know 2
                           Manufacturers are able to provide tracking details,                                   No
                           such as where    Yes the product was produced, from                                                                                Millennials   All ages                       Millen
                                                                No                                                               Information requirements before dairy purchase, % of respondents'
                           which city it was exported, from whichYescity it was
                           imported, where the raw material was sourced,                                                                                                           Note: Figures may not sum to
                                    Information requirements before dairy purchase, % of respondents'       Product ingredients                             'Question answered
                                                                                                                                                              Manufacturing    by 1,139 consumers: What are you
                                                                                                                                                                            processes                          So
                           and how the powder milk was made. Consumer
                           engagement enables transparency
                     Product ingredients                         Manufacturing processes
                                                                                        between
                                                                                         Must know
                                                                                                         the Sourcing practices                    Must know 25                                   Must know 2
                                                                                                               31                                                              27
                                                      2016                                            2018                     2137
        Must know      31 brand37owner and                the
                                                       Must know consumer
                                                                     25            about details
                                                                                  27                        of 21
                                                                                                     Must know

                           a product. In addition, the information is a way
                                                                                                                   49          49
Would like to know      50 to distinguish             theto know
                                              Would like
                                                                     50
                                                            real product           from aWould
                                                                                  50           fake      one,
                                                                                                   like to know                                                   50                                            4
                                     45                                      Would like to know                50                          Would like to know                  50         Would like to know
                           and therefore allows brand owners to guarantee                                                         45
Don't need to know                            Don't need to know 25               22        Don't need to know 30              30
                       19
                           the quality
                                     18
                                                of their formula, and to ensure the
                                                                                                                                                                                         Don't need to know 3
                   Millennials    All ages                       Millennials   All ages                        Millennials  All ages
                           safeness for the parent of feeding                Don't need thetocanknowof milk    19                 18      Don't need to know 25                22
                                         Note: Figures may not sum to 100%, because of rounding.
                 'Question powder        to their
                            answered by 1,139 consumers:infants.                                         Millennials
                                                          What are your main information requirements prior  to purchase?    All ages                         Millennials   All ages                        Mille
                                                          Information requirements before dairy purchase, % of respondents'

                                                                                                                                   Note: Figures may not sum to 100%, because of rounding.
                                    Product ingredients                                                      Manufacturing
                                                                                                            'Question      processes
                                                                                                                      answered                               Sourcing
                                                                                                                               by 1,139 consumers: What are your  mainpractices
                                                                                                                                                                       information requirements prior to purc

                 Must know                                                             Must know                          25                                    Must know          21          21
                                                                                                               12:40AM

                                                                                                                                             27
                                                                                                                              100%

                                       31                  37

                                                                                                                           50                                                      49          49
       Would like to know              50                                 Would like to know       Lorem ipsum dolor sit amet,
                                                                                               consectetuer adipiscing elit, sed diam        50        Would like to know
                                                           45                                   Lorem ipsum dolor sit amet, it amet
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                                                                                                                                                                                                                              12:40AM       100%
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      Don't need to know                                                 Don't need to know                               25                 22        Don't need to know          30          30
                                       19                  18                                   Lorem ipsum
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                                Millennials            All ages                                                Millennials                 All ages                         Millennials     All ages

                                                                                            Note:
                                                    Note: Figures may not sum to 100%, because      Figures may not sum to 100%, because of rounding.
                                                                                               of rounding.                                        Lorem ipsum dolor sit amet,
                             'Question answered by 1,139 consumers: What are your main information
                                                                                            ‘Question answeredprior
                                                                                                    requirements by to purchase?
                                                                                                                    1,139
                                                                                                                                               consectetuer adipiscing elit, sed diam
                                                                                                                           consumers: What are your
                                                                                                                                                                                                               Lorem ipsum dolor sit amet, it amet
                                                                                                                                               main information requirements prior to purchase?                    consectetuer adipiscing elit

                                                                                                                                                                                                                  Lorem ipsum dolor sit amet,
                                                                                                                                                                                                       Top sourceconsectetuer
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                                         Top source of competitive advantage, % of respondents1

Manufacturing                          Brand-management                              Product                                                                                                                    Lorem ipsum         Lorem ipsum
 efficiencies   12 | Strengthen Brand Loyalty      by Digitizing Consumer Engagementinnovation
                                           capabilities
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                             Supply chain                                                      Procurement                                             efficiencies                                                                    capabili
                             and logistics                                                      efficiences
     22
                                                                                                                                                                  12:40AM
                                                                                                                                                                                          Supply chain
                                                                                                                                                                            100%
                Customer                                                                                                     Sales-force                                                  and logistics
Chapter 3: Consumer Engagement, the 4E Model

                Enable     Educate    Evolve    Empower

                                       NEW BRAND
                          OLD BRAND

                Enable     Educate    Evolve    Empower

Educate:        Enable     Educate    Evolve    Empower

A rising number Enable
                 of malnutrition
                           Educate casesEvolve
                                          and health concerns
                                                  Empower           online, from magazines, books or from their friends
drive the growth of the global organic and probiotic infant         and families. Brand owners can eventually provide
formula market. Enable
                 Since 2016,  there hasEvolve
                           Educate        been an Empower
                                                   increase         pedagogical information for young parents via the QR
in the demand from millennial parents with balanced and             code on their product. This code can educate their
green nutrition needs. Key market players such as Nestle,           consumers on how the ingredients will help their
Hipp, and Mead Johnson launched new formula products                children grow, what are the differences of formula
that offer milk powder with minimal preservatives and               products at each stage of the growth, why babies need
adequate nutritional content. The rising GDP has resulted           different components in different stages, etc..
in increased expenditure by parents in general, and a
willingness among young parents to spend money on high              Young parents gain knowledge through learning from
quality formula products for the health and wellness of             brand owners’ expertise, and develop trust by receiving
their babies.                                                       in-depth educational content on becoming responsible
                                                                    parents. The purchasing behavior will not stop at one
On the other hand, as young parents, they have little               formula product or one category of products. In contrary,
experience on how to read and how to choose milk                    by influencing and educating young parents, brand
formula products. Their knowledge of the benefit of                 owners will extend the buyers journey through every
the ingredients are based on information the retained               stage of a baby’s growth and development.

                                                                Strengthen Brand Loyalty by Digitizing Consumer Engagement | 13
12:40AM        100%

                    Enable        Educate        Evolve        Empower
Chapter 3: Consumer Engagement, the 4E Model
                    Enable        Educate        Evolve        Empower

Evolve:             Enable        Educate        Evolve        Empower
                                                                                                                     Lorem ipsum dolor sit amet,
                                                                                                                 consectetuer adipiscing elit, sed diam

In the Enable and    EducateEducate
                Enable
                               phase, consumers
                                       Evolve
                                                 made the
                                                Empower
                                                                                     According to McKinsey’s      survey,
                                                                                                          Lorem ipsum               global
                                                                                                                       dolor sit amet,  it amet   dairy companies
                                                                                                              consectetuer adipiscing elit
decision to connect with manufacturers and to access                                 recognized their top competitive                  advantage to be
                                                                                                              Lorem ipsum dolor sit amet,
information by scanning the QR code. The interaction                                 manufacturing efficiencies,         product innovation, and sales-
                                                                                                                consectetuer adipiscing

is one way from consumers to the manufacturer. In                                    force effectiveness. However,
                                                                                                           Lorem ipsum
                                                                                                                              consumer-insight
                                                                                                                                Lorem ipsum
                                                                                                                                                            capabilities
the Evolve phase, manufacturers are able to interact                                 were cited by only 2%sitof     respondents
                                                                                                                 amet              sit amet     13
                                                                                                                                                  . Clearly if a brand
with consumers via chat and online consultation. The                                 owner is capable of engaging consumers while gathering
idea is to provide a trustworthy after-sale support to                               insights from the interactions, from the interactions, the
consumers, involving them not only before the purchase                               brand will gain additional opportunities to understand
decision, but also during the consumption of the                                     consumers and as a result can tailor products to better
product or even thereafter.                                                          penetrate a targeted consumer population.

                                                   Top source of competitive advantage, % of respondents1

Manufacturing                                                            Brand-management                                                                     Product
 efficiencies                                                                capabilities                                                                    innovation
                                      Supply chain                                                               Procurement
                                      and logistics                                                               efficiences
     22

                     Customer                         Brand-management                            Other                                       Sales-force
                      service                             capabilities                                                                       effectiveness      17

                         13                                                                                                                            13
                                            11
                                                                                                                          9
                                                               7                                    7

                                                                                 2

Company's level of insight into consumer trends and behaviors, % of respondents2

     9                                                    55                                                                                     36
    Low                                               Medium                                                                                    High

Question answered by 56 dairy CEOs: What do you believe is your company's top source of competitive advantage?
1

Question answered by 56 dairy CEOs: How would you describe your company's level of insight into consumer trends and behaviors?
2

With the development of master applications, such as                                 those brands that have an official account on the platform
Wechat and Grab, brand owners can be able to easily                                  and signed up for a partnership with the mini-program,
connect with their consumers in person, through                                      consumers will have a direct access to a customer support
scanning the QR code on the packaging that directs them                              account via Wechat - by sending text or voice messages
to a pre-defined platform. For instance, the Infant Milk                             to interact with nutritionists or sales support specialists.
Powder Tracking Mini-Program, known as 婴配乳粉追溯                                        Brands can gather insightful data from consumers to
in Chinese, and available on Wechat, allows consumers to                             further improve their marketing campaign, allocate
scan the QR code on the bottle via the mini-program.                                 more accurate resources to retail shops (or online retail
                                                                                     channels) and provide product or service offerings that
According to Tencent (owner of Wechat), the number of                                are of value to parents and their babies.
active monthly users of Wechat exceeds 1.1 billion. For

14 | Strengthen Brand Loyalty by Digitizing Consumer Engagement
Enable     Educate   Evolve    Empower

                                                                     Chapter 3: Consumer Engagement, the 4E Model
                 Enable     Educate   Evolve    Empower

Empower:         Enable     Educate   Evolve    Empower

The ultimate purpose of consumer engagement is to                children, substantially boosting brand loyalty among
influence consumers before and after the point-of-sales,         the members of community to choose infant formula
creating trust and loyalty through information and               products from the same brand for their children.
interactions. In this digital era, community is a shared
space to connect with each other. In the consumer                Companies can also build loyalty programs through
goods industry, actively engaging audiences through              consumer engagement activities. Through activities,
communities creates a sense of belonging from having             such as scanning the unique code on a product, sharing
had similar experiences. The highest level of consumer           information within the community, answering questions
engagement is to empower consumers to engage with                from other users, etc. consumers can be rewarded with
each other: to not only limit interactions to the brand,         credit points, which will lead to a discount for their
but also extend it to other consumers of the brand.              next purchase.
More specifically, in the infant formula industry, parents
                                                                 All consumer engagement activities are accountable to
need an open space to ask questions and voice concerns
                                                                 create trust. At the same time, brands will be rewarded
about the ways of raising and caring for their babies.
                                                                 with consumer insight gained from these activities.
When they face problems or when they get confused                Massive data will guide companies in understanding
about their babies’ reaction, parents look for someone           consumers: when they bought the product, in which
with more experience who could be able to help. These            channel, how frequently they purchase, and their
people can be doctors, nutritionists, or other parents.          satisfaction together with the satisfaction from
Being part of a group that shares common topics of               their babies. This sustainable cycle of engaging
babies and learning from each other will lead to an              consumers and improving offerings will bring long-term
increased satisfaction in the consumption experience.            authenticity of a product and loyalty to a brand in this
Happy and more professional parents lead to better fed           competitive infant formula market.

                                                             Strengthen Brand Loyalty by Digitizing Consumer Engagement | 15
CHAPTER 4:
  DIGITIZE CONSUMER
   ENGAGEMENT
Chapter 4: Digitize Consumer Engagement

 Digital transformation has been a lever for leading
 organizations to stay competitive in today’s competitive
 environment. With the pace of revolutionary changes and
 disruptive technologies, players in the consumer goods
 industry depend on data analysis to help accelerate
 an effective decision-making process. The growing
 usage of digital marketing tools contributes to the
 adoptions of this new way of working and interacting
 with consumers. We suggest to companies that they
 integrate the concept of consumer engagement into
 their digital transformation plan, such that it is aligned
 with the commercial strategy and customer centricity
 of the company as a whole. Digital transformation for
 corporate is not only about pure technology, but also
 about transforming the way of thinking and reacting –
 positioning customers as the core of their business.

 For brand owners in the infant formula industry,
 putting customer as the core means leveraging
 consumer engagement activities - starting at the
 packaging level. We combine the Digital Maturity Model14                    Laetus is your business partner with a shared vision
 with consumer engagement in order to illustrate how                         of digitalization and consumer engagement. We offer
 Laetus will help you to involve consumers, solely by                        you solutions for your infant formula packaging line
 applying your digital transformation program. From an                       to enable each level of your consumer engagement
 Enabled Consumer Engagement level to an Empowered                           plan. With a robust project deployment and end-user
 Consumer Engagement level, brand owners can verify                          integration team, we implement the change for you
 where they are in the digitized consumer engagement                         to drive workflow efficiency, flexibility, and agility,
 journey, and set their target of where they want to be                      contributing to your digitalization and consumer
 with the right technologies.                                                engagement ambition.

                                     Verify Preprinted Datamatrix
                                                                              Verify printed                  Verify bundle filling,
Filling control Product                   QR code on product
                                                                             Expire Date and                   aggregation, label,
  mix up Component                       (Ex Product identity)
                                                                              Batch Number                      batch expire date
     Closing control

                                                          Verify I eaflet,                     Track & Trace QR
                                                            accessory                          Code Gs1 Digital                     Verify box
                    Filling and print
                                                         (spoon) or small                      Link Block Chain                 complete, missing
                 verification on thermo
                   mac forming hine                        part present                                                         part printed label,
                                                                                                                                   expire date

                                                                      Strengthen Brand Loyalty by Digitizing Consumer Engagement | 17
-
      Digital
     Maturity                  )                                                                                                                                                                                    �

       Model/

         �

                          Packaging lines for infant formula products are triggered for   New proJects, tasks, and processes an the packaging lrnes are completed         Packagrng software and hardware for rnfant formula products are contrnuously rntegrated w1th other busrness
                          established stakeholders by defined processes, timeline and     and measured d191tally using hardware and software.                             processes and systems, creatrng connect1ons and rnteractions from the product1on s1te to d1stribut1on, and to
                                                                                                                                                                      1
                          quality control measures using basic automation tools.           • Ab1l1ty to track who made dec1s1ons throughout process                       end consumer.
  Explanation of DMM       • Crisis avoidance                                              • Across department                                                             • Connect1vity and v11tual1zat1on
                           • Within department                                             • Automat10n speeds up process                                                  • Across partners and departments
                                                                                                                                                                      1
                           • Specialist delivers changes using an established process                                                                                      • Adaptrng to changrng cond1t10ns w1thout great orgamzat1onal parn

Cor responding Consumer
                                                                                                                                                                          Evolve, Empower
    Engagement Level
                                                                                          Enable, Educate
                                                                                                                                                                      I
                                                                                          1 Code: Public QR code                                                          2 Codes: Public-QR code and Secure-QR Code
                                                                                          QR codes on the surface of the packaging of infant formula can be               Public-QR code is the same as at the Enable and Educate Level, everyone can be able to access codes on the
                                                                                          scanned by consumers with a smart phone or tablet. The code will direct         surface of the package. In addition, a Secure-QR code is available inside of the package. Parents can only reach
Explanation of Consumer                                                                   consumers to a website, where brand owners can decide on information            the code after buying the item and opening the bottle. This Secure-QR code is a unique code for each
   Engagement Level                                                                       published (e.g: raw material sourcing, date and location of production,         individual formula can. After scanning the secure code, the consumer has access to another website which is
                                                                                          ingredients, as well as educational contents of nutrition, product              different from the public code website. Brand owners can decide to offer features, such as authenticity check to
                                                                                          advantages, and consumption advices).                                           avoid counterfeit, credit point collection for loyalty programs, after sale support, and community access.

                          • Inspect product quality by usrng camera and software system   Inspect product pnnted 1dent1fiers (1s 1t present, readable, accurate 7 )       Implement senal1zat10n and aggregat1on software and hardware solut1ons that contnbute to an rnteract1ve
                          • Identrfy contamrnat10n and reJect default products            w1th camera and software system                                                 consumer engagement act1v1ty
 Laetus Enables you to    • Solve recall problems by lookrng at the root cause at the      • 1D Code: bar code                                                             • 2D Code: QR code w1th vanable data; data matnx code
                                                                                                                                                                      1
                            product10n s1te, and ensure the qual,ty of your product        • 2D Code: QR code with fixed data, data matnx code                             • Web seMce and data exchange on cloud, rnterfacrng ERP system
CHAPTER 5:
  FULL QUALITY INSPECTION AND
   SERIALIZATION WITH LAETUS
Chapter 5: Full Quality Inspection and Serialization with Laetus

Laetus is a globally leading provider of solutions
for inline vision quality control and complete
serialization and aggregation systems. With
40+ years of experience as supplier of the
manufacturing machineries, 18,000+ installed
systems ensure the highest product quality and
optimization of packaging processes for more
than 3,500 customers in food and beverage,
pharmaceuticals, medical technology, and
cosmetics industries.

The company was founded in 1974 and has its
headquarters in Alsbach near Darmstadt, in the
mechanical engineering region of Rhine-Main/
Rhine-Neckar. Today it employs a team of over
250 people and has branches in the USA, Mexico,
Brazil, China, Great Britain, France, Italy, Spain,
Poland and the United Arab Emirates.

From initial contact to implementation through
to support, Laetus meets all regulations and
individual customer requirements with its modular,
flexibly adaptable systems. The company’s
own Track & Trace Academy at the Alsbach
site also offers regular training including live
demonstrations in the showroom.

The worldwide network for sales, service and project management is supported by around 50 independent representatives
and distributors. Since 2015, Laetus has been part of the Danaher Group and, together with ALLTEC/FOBA, Esko, Linx,
Pantone, Videojet and X-Rite, is part of the product identification platform as an independent company.

20 | Strengthen Brand Loyalty by Digitizing Consumer Engagement
REFERENCES:
1. https://www.un.org/en/development/desa/population/publications/pdf/trends/Population2030.pdf
2. https://www.researchnester.com/reports/baby-food-market/1271
3. https://www.globenewswire.com/news-release/2019/11/19/1949187/0/en/The-global-baby-infant-formula-market-
   size-is-estimated-to-be-24-043-million-in-2018-and-is-projected-to-reach-45-348-million-by-2025-registering-a-CAGR-
   of-9-5-from-2018-to-2025.html
4. https://www.mordorintelligence.com/industry-reports/baby-food-market
5. https://www.alliedmarketresearch.com/baby-food-market
6. Astrid Geisler and Anne Kunze: “The Trace of the White Powder” in DIE ZEIT No 32/2018, August 2nd, 2018
7. https://www.scmp.com/business/markets/article/1934204/chinas-new-baby-milk-scandal-trigger-tighter-cross-border-e
8. http://www.chinadaily.com.cn/china/2016-04/10/content_24406252.html
9. https://www.globalcitizen.org/de/content/lactalis-baby-formula-salmonella-recall/
10. https://packagingeurope.com/total-recall-impact-productrecalls-food-industry/
11. https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/a-winning-growth-formula-for-dairy
12. https://www.labelinsight.com/transparency-imperative-report
13. https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/a-winning-growth-formula-for-dairy
14. https://www.packagingmaturitymodel.com/
Why Laetus?

                                                                                    © 2020 Laetus GmbH, all rights reserved
  • More than 40 years of experience in vision inspection and quality control
  • Expertise in track & trace for small, medium and large enterprises in pharma,
    food and cosmetics industries
  • Project management from consultation to implementation
  • Quality management through validation
  • Flexibility when integrating solutions through modular approach
  • Training academy with individual offers
  • Worldwide technical support, partly in local languages
  • 24/7 hotline

Laetus GmbH
Sandwiesenstraße 27
64665 Alsbach-Hähnlein
Germany
T (+49) 6257-5009-0
F (+49) 6257-3119
contact@laetus.com
www.laetus.com/en
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