How digital labeling and product aggregation are transforming the market.

One of the latest innovations pertains to the water and soft drinks segment. In an interview with industry representatives, we discussed how this process unfolds. Respondents shared the challenges, technologies, and responsibilities towards consumers that lie behind every can of drink and bottle of water.

Legislative Framework

First and foremost, it is important to remind that, according to the government decree, the aggregation system for the product group "Water and Soft Drinks" began to be implemented from November 1. This involves the consolidation of individual packages of labeled goods into group and transport packaging. This is necessary to simplify and expedite logistics processes, reduce the likelihood of errors during the sorting of product blocks, and track their movement at all stages of delivery from suppliers to stores.

Currently, manufacturers and importers are implementing it for the first group of beverages – fruit and vegetable juices, carbonated and non-carbonated water, drinks with or without added sugar and other sweeteners in PET and glass bottles. The second phase of this work will commence on May 1, 2025, covering products packaged in metal containers.

Since July 15, 2021, a pilot project for testing the serialization system for water has been launched. Within this initiative, five local producers received equipment funded by the labeling system operator, and DataMatrix codes were also provided free of charge.

It is noteworthy that mandatory labeling of water and beverages was initially supposed to start in March 2022. However, major producers were technologically unprepared for the process. As a result, deadlines were postponed several times: first to July 2023, and then to March 2024.

In November of this year, a meeting was held at the Tax Committee with business representatives who wished to postpone the implementation of mandatory aggregation. The committee refused to extend the deadline beyond December 1, considering that a number of companies had already implemented aggregation. A decision was made to create a working group that would include representatives from the Tax Committee, the Chamber of Commerce, and the entrepreneurs themselves to discuss the emerging difficulties.

Thus, the further development of the digital labeling and aggregation system in Uzbekistan is closely linked to active dialogue with importers and manufacturers. Their experience and feedback become key factors in the implementation of new requirements.

The Role of Importers in Adapting to the System

Representatives of major importers, such as Smart Global Distribution and GD Pharm, are already sharing successful cases and warning about the challenges they faced when implementing aggregation in their operations. They note that an important step is not only the technical modernization of production lines but also training staff, building logistics chains, and developing a unified standard for interaction with distributors.

Sherzod Kasymov, representative of Smart Global Distribution, which imports Rich, Pulpy juices, and others from Russia to Uzbekistan:

– What preparatory steps were taken to begin the aggregation phase?

– The labeling process for this product category in Uzbekistan started earlier than in Russia. This required importers to form a stock of goods in advance and organize preparations in warehouses. At the initial stages, the work was done manually: we gathered teams at customs warehouses to work through the labeling process, check time expenditures, and the possibilities of manual execution. Now this process has become more professional and faster.

– How has the implementation of the aggregation system affected your work? What main advantages do you see?

– First of all, it is worth highlighting the ability to account for products and generate electronic invoices. An aggregated code for an entire product block can contain from 12 to 60 thousand units of products. This means the elimination of the need for piles of paperwork; the entire list of goods fits in one line.

– How do digital labeling and aggregation affect your interactions with your trading partners and suppliers? Has the system become more transparent and effective?

– Now, thanks to aggregation, we can ensure that the products in stores are officially shipped by our partner, rather than imported through "grey" channels. This helps retail points transition to legal supplies and provides consumers with quality guarantees. Consequently, we can saturate the market with "white" quality products.

Zarina Kadyberdieva, representative of GD Pharm:

– Were there any difficulties in the preparation process for aggregation? If so, what were they?

– Yes, there were certain complexities, especially during the product certification stage. Since the products must be fully labeled before submission for certification, this can delay the market entry of goods. Nevertheless, in the long term, these processes will allow us to improve control over products at every stage.

– What financial benefits do you see in the long term from implementing aggregation? Has this decision become economically feasible for your business?

– At this time, we are just beginning to assess the financial results from aggregation, but we already see potential for reducing costs in inventory management and increasing accounting accuracy. In the future, this will help us optimize processes and reduce expenses.

– What additional opportunities for business scaling have emerged thanks to aggregation?

– Aggregation indeed opens up new opportunities for scaling. We are considering expanding our product range and increasing supply volumes. This will enable us to operate more efficiently and strengthen our market position.

Aggregation is being actively implemented not only by importers but also by local producers. Therefore, it is essential to gather opinions from this side as well.

Akhatbek Bababekov, senior specialist in the labeling department of the beverage, soft drink, and water manufacturer Pulsar Group Brewery:

– How did the initial stage of implementing aggregation proceed?

– At the first stage, we focused on finding applicators for our production workshops that could apply codes considering the required bottling line speed. In the second stage, we searched for scanners to read both individual and group codes. To address this task, we turned to a system integrator who already had a ready-made technical solution for applying codes. We adapted and modified it for our applicators and scanners, ensuring compliance with the production line speed. The integrator also made changes to ensure that the program corresponded as closely as possible to our conditions and automated the process of applying codes and generating reports on the line.

– How has the implementation of the aggregation system affected your work? What benefits do you see in this?

– The advantage of labeling and aggregation is that the application and reading of codes are unique; dealers and retail points do not face issues with reading and managing the movement of goods to consumers. The code is applied per requirements and remains intact on the product, allowing the end consumer to always scan the code and obtain information about the product.

– What changes have you noticed in the accounting and control of products since the start of using the aggregation system?

– Based on the data from the aggregation of labeled products, the accounting department sees an accurate batch in their system for which movement, accounting, reporting, and write-off are conducted, as well as the remaining products in branches. This provides control over our products and their remaining inventory.

Judging by the opinions of market participants, it can be concluded that the introduction of aggregation is accompanied by positive dynamics. This confirms the interest of importers and domestic producers in enhancing the efficiency of processes that contribute to the overall development of business.