Tetra Pak AnalysisTetra Pak AnalysisJune 3rd 2013

AgendaBackgroundKey ChallengesStakeholder AnalysisRisk ManagementRecommendationsQ&ATetra Pak products

Tetra Pakhttp://www.youtube.com/watch?v=eDodQwzfV74&list=PL10C49583D3A632AA

BackgroundHow did we get here?Milk consumptionWhat instigated the challenges?Melamine scandalWhy does this impact Tetra Pak significantly?Most of its eggs in one basketHow did this happen?Highly fragmented supply chain

Key ChallengesMilk safety:Milk producers have struggled with contamination issuesSignificantly impacts Tetra Pak, but TP has limited controlCompetitionSubstitute product of fresh milk infringing on UHT market spaceNew entrants into aseptic packaging market; Tetra Pak losing competitive edge. (GA Packs price is about 10-15% lower than Tetra Pak)Alternative packaging methods for fresh milk

Key ChallengesRecycling:Negative perception of Tetra Pak package recyclability Lack of infrastructure, equipment, and processes in place for extensive recycling process neededRisk of change in government recycling policy

HB Clad Plate manufactured from recycled Tetra Pak containers

Stakeholder Analysis

Risk Management: Milk SafetyStakeholders with impact on Packaging Supply Chain

Risk Management: Competition

Risk Management: Recycling

RecommendationsOverall: Leverage stakeholder relationships to decrease risk of market share loss

Milk SafetyOffer QC solutionSuggest expansion of regulations

RecommendationsCompetitionFurther innovation with packagingProduct diversification optionsExplore expansion of milk processor customer base RecyclingEnhance relationship with governmentWork to defragment recycling supply chain

Appendix I

Appendix II

*Chinese government National Milk Office Milk producersYili, Mengniu, Bright Dairy, SanyuanRenda-Tetra Pak Dairy Research CentreVirtual Dairy Farmers SchoolPaper packaging providersForest Stewardship CouncilNGOs Recycling plantsMilk consumersEducational institutions:Good: Start with pasturelands, assist farmers in sustainable, safe practicesPoor: Not working with milk processing plants, QC issue with contaminants*With the analyses we did early, we had come up with a few recommendations. The relationship in China is different from what we have here in States. The external forces has tremendous impact on the business.Basically we need to leverage stakeholder relationships to reduce risk and sustain its market position.

The immediate concern was the milk safety issue in China that processing plants struggle with the milk contamination where TP has limited control or influence over it.Tetra Pak is considered itself as a service provider where they are providing an integrated business solution to customers as a way to structure the value chain, supporting the development of the entire daily sector in any country. - If TP could offer QC solution to milk processing plant, this would be a kind of value added service as well as branding higher quality milk. TP could also suggest expansion of regulation for the downstream of supply chain other than just the National Milk Office requirement for pasturelands.

Another concern is the intensive competition in the market such asone of the competitor GA pack.- To sustain its market position, Tetra Pak shall continue innovation and research on packaging thats easier and cheaper to recycle. Hopefully to carve out more Intellectual Property space.- The current challenge is to figure out how to use the process in a larger scale with the limitations of recycling infrastructure. Tetra Pak should continue to invest in the existing recycling process and to help recycling plants by purchasing needed equipment. This would help building the recycling infrastructure. - Tetra Pak should diversify its product line other than milk products such as yogurt drinks or nutrition drinks. Milk will still be TPs main focus, but extension will reduce the business risk.- Currently TP has been working with schools, We are looking at expand the customer base to B2B or military for example.

Recycling is another critical issue. - There are negative perception. TP shall enhance the relationship with government to influence the policy implementation and raise public awareness. Work to defragment recycling supply chain by working with recycling partners to implement automated recycling stations that accept used aseptic packagingTP could help the small recycling company to encourage