UK markets are entering one of the most regulated periods in recent history. New obligations around sustainability, traceability, packaging and due diligence are reshaping operating models faster than many organisations anticipated. For CPG leaders, compliance is no longer a parallel concern. It is becoming central to how supply chains are designed and governed.
At the same time, technology capability continues to advance. Progress in AI, automation and predictive analytics is changing what organisations can see across their supply chains and how quickly they can respond. This is prompting a shift in thinking away from isolated improvements towards a broader view of what a next generation supply chain needs to deliver.
As a result, the CPG supply chain of 2026 requires deliberate redesign. The question executives are asking is evolving. It is no longer a question of what is supply chain visibility but rather how visibility supports resilience, compliance and scale. These considerations are shaping investment decisions and influencing demand for more joined up CPG supply chain services .
From our work with CPG organisations, Birchman sees six trends that will define the year ahead and guide how leaders approach digital transformation.
#1
Agentic AI Is Shifting to Autonomous Supply Chain Decisions
Agentic AI is moving beyond decision support and into execution. In CPG, this shift is particularly significant across the UK and EU, where compliance requirements are complex, fragmented and still evolving. ( 1 )
Agentic AI systems are already handling:
Agentic AI systems are already being used to manage activities such as:
- Customs documentation and automated clearance checks
- Trade compliance routing across regions
- Real time adjustment of inventory and replenishment
- Label variant matching to meet PPWR requirements in the EU and EPR obligations in the UK
- Automated validation of traceability data across all 27 EU jurisdictions
This creates a meaningful productivity uplift. Tasks that once consumed entire teams like verifying packaging compliance or preparing cross border documentation, are now automated.
For many leaders, a system that makes compliant decisions in real time without introducing risk is the first step toward the next generation supply chain.
#2
Predictive Analytics to Manage Fractured UK–EU Trade Lanes
Forecasting accuracy has improved across global CPG markets but in the UK and EU, the value lies in managing fragmented post Brexit trade conditions. ( 3 )
More than two thirds of UK supply chain leaders report ongoing border delays. Many now assume 2 to 3 days of unplanned time at key EU–UK ports. ( 2 ) Predictive analytics helps teams anticipate:
- Customs processing times
- Documentation gaps before they occur
- Port congestion issues
- Seasonal delays
- Compliance rejections linked to PPWR or CSDDD
Forecasting no longer stops at SKU demand. It now incorporates regulatory friction, lead time volatility and supplier risk. This is one reason SAP powered analytics platforms are becoming core to CPG supply chain services that Birchman delivers.
With predictive models in place organisations can pre stage inventory, renegotiate supplier terms and secure alternative carriers well in advance.
#3
Control Towers Are Becoming Compliance Engines
For years, control towers focused on where the goods are, when they will arrive and how exceptions are handled. In 2026, expectations are broader and more demanding. They want to know what is supply chain visibility and when compliance becomes mandatory.
Next generation control towers are expanding to include:
- CSDDD due diligence evidence ( 4 )
- EUDR deforestation traceability ( 5 )
- PPWR recyclability and packaging compliance checks ( 6 )
- UK Extended Producer Responsibility (EPR) modelling ( 7 )
- Food safety and labelling changes due in July 2026
This shift reflects a wider change in architecture. Compliance first design is becoming essential. A shipment that arrives on time but fails compliance checks cannot be sold, regardless of service performance.
Many CPG leaders are now embedding digital twins within their control towers to test outcomes before decisions are made. These models help teams assess scenarios such as how a material change affects PPWR recyclability, whether a supplier switch changes CSDDD exposure or how a packaging redesign alters EPR fees in the UK.
For UK based CPG organisations, this is a defining feature of the next generation supply chain. It is visibility that protects market access, not just visibility that improves operational efficiency.
#4
Blockchain & IoT Are Required for Mandatory Traceability
Blockchain and IoT are moving from optional innovation to operational requirement. By 2026, CPG organisations operating in the UK and EU must meet strict traceability obligations driven by multiple regulatory frameworks.
These include:
- CSDDD covering human rights and environmental due diligence
- EUDR requiring plot level traceability for commodities such as soy, cocoa and coffee
- PPWR tracking recycled content, banned substances and packaging composition
- UK Extended Producer Responsibility requiring detailed packaging data to be logged and verified
This means traceability must be continuous and verifiable. Manual auditing is no longer viable.
Blockchain backed supplier networks allow companies to demonstrate:
- Provenance of raw materials
- Zero deforestation compliance
- Packaging composition with verified recycled content
- Supplier ESG performance
IoT sensors and QR coded materials close the loop, tracking goods through every step. These capabilities sit at the core of modern CPG supply chain services, as they turn compliance into a predictable and measurable process.
#5
Regionalisation & Resilience Are Replacing Cost Only Optimisation
The UK is shifting towards resilience led supply chain design. Cost is still important but leaders now treat geopolitical risk, regulation and sustainability as equal priorities.
Three trends are driving this shift:
- Brexit friction is creating operational unpredictability.
- CSDDD audits are easier when suppliers operate within a shorter geographic radius.
- PPWR requirements encourage greater control over packaging inputs and recyclability.
Organisations are diversifying suppliers, nearshoring production and building flexible manufacturing capacity across multiple EU states and the UK.
Cloud based resilience tools help leaders model:
- Tariff impacts
- Alternative routing scenarios
- Supplier ESG risk
- Inventory vulnerabilities
- Disruption cost exposure
This modelling is now expected in any next generation supply chain strategy.
#6
AI Driven Sustainability and ESG Compliance
Sustainability in Europe is now compliance-driven, not campaign-driven. Regulations such as CSRD and PPWR introduce strict packaging waste reduction and recyclability rules.
AI helps organisations:
- Evaluate packaging material recyclability
- Identify lower carbon logistics routes
- Manage Scope 3 emissions with supplier-level granularity
- Model the impact of redesigning packaging formats
- Optimise procurement based on modulated EPR fees
For example, AI tools can assess whether a packaging component will be classed as “hard to recycle” under UK EPR, a classification that carries higher fees from 2026.
This is where Birchman’s SAP and transformation expertise supports organisations to create SAP driven ESG reporting models and compliance workflows that scale globally.
How Birchman Supports the CPG Industry with Digital Transformation
Birchman works with global and regional CPG organisations to build supply chains that are compliant and scalable. As a SAP Platinum Partner and United VARs member, we help businesses:
- Define their target operating model
- Build a robust digital roadmap
- Implement SAP Cloud ERP (S/4HANA) for supply chain excellence
- Embed advanced analytics and AI into decision making
- Deliver continuous improvement through value focused optimisation
With over 20 years of transformation experience, we partner with organisations to build CPG supply chain services that reduce risk, improve visibility and enable ongoing innovation.
Closing Thoughts
2026 will be defined by new regulations, rising complexity and rapid technology maturity. CPG leaders who modernise early will gain resilience, compliance certainty and operational agility.
Now is the time to assess your operating model, understand the regulatory impact and invest in platforms that support long term adaptability.
Talk to us and explore how we help your CPG organisations build next generation supply chain capabilities with SAP and intelligent technologies.
FAQs
Question #1: How does S/4HANA support regulatory compliance for CPG supply chains?
Ans: S/4HANA provides embedded analytics, real time reporting and structured data models that streamline compliance tasks across PPWR, CSRD, EUDR and CSDDD. It also enables automated workflows, reducing manual reporting and lowering the risk of non compliance.
Question #2: What role does master data quality play in next generation supply chain transformation?
Ans: High quality master data enables accurate forecasting, traceability, packaging compliance checks and ESG reporting. Without reliable data, even advanced AI and control towers deliver inconsistent results.
Question #3: How can CPG companies prepare for PPWR and UK EPR fee changes?
Ans: Companies should start by assessing packaging portfolios and modelling future EPR costs. AI led packaging optimisation tools can help teams design compliant, lower cost packaging formats before 2026 deadlines.
Question #4: What is supply chain visibility in an ESG context?
Ans: In 2026, visibility includes not only the movement of goods but also carbon footprint data, supplier due diligence status, waste profiles and packaging recyclability scores. It is a core capability of any next generation supply chain.
Question #5: How do CPG supply chain services support organisational agility?
Ans: Modern services integrate technology, process redesign, automation and data strategy. This combination allows CPG companies to adapt quickly to regulatory changes, supplier disruptions and market shifts.
