For many FMCG brands, inventory management is often viewed through the lens of stock availability.

The focus is usually on ensuring products are available when retailers place orders and consumers want to buy.

However, one issue that frequently catches suppliers out is what happens when inventory sits in the supply chain for longer than expected.

• Products expire.
• Margins are reduced.
• Stock is written off.
• Retailers reject deliveries.
• Waste increases.

We’ve seen brands focus heavily on growing sales while underestimating the operational impact of expiry date management.

As product ranges expand and distribution grows across retailers, warehouses, distributors, and fulfilment partners, managing inventory effectively becomes increasingly important.

This is where FIFO and FEFO play a critical role.

Key Takeaways

• FIFO and FEFO are inventory management methods used to rotate stock
• FIFO prioritises products based on when they entered storage
• FEFO prioritises products based on expiry dates
• Poor expiry management can increase waste, write-offs, and retailer issues
• FEFO often becomes more important as FMCG operations become more complex
• Inventory visibility and supply chain coordination are critical to managing expiry risk

What Is FIFO?

FIFO stands for: First In, First Out

Under a FIFO approach, the stock that enters storage first is shipped first.

For example:

Under FIFO, Batch A would be dispatched before Batch B.

FIFO is one of the most common inventory rotation methods used across warehousing and supply chain operations.

For products with long shelf lives and relatively consistent stock movement, FIFO can be highly effective.

What Is FEFO?

FEFO stands for: First Expired, First Out

Rather than focusing on when stock entered storage, FEFO prioritises products with the earliest expiry dates.

For example:

Under FEFO, Batch B would be shipped first because it expires sooner.

This approach is particularly relevant for:

• food products
• beverages
• supplements
• chilled products
• products with shorter shelf lives

In FMCG supply chains, FEFO often provides greater protection against expiry-related losses.

FIFO vs FEFO: What’s the Difference?

While both methods help improve stock rotation, FEFO is generally better suited to products where shelf life is a key consideration.

Why Expiry Management Matters More As Brands Grow

Many challenger brands can manage expiry dates relatively easily when supplying a small number of customers.

As distribution expands, however, inventory may be spread across:

• multiple warehouses
• retail depots
• distributors
• fulfilment providers
• wholesale channels

This creates significantly more complexity.

We’ve seen brands lose visibility of stock movement as operations scale, making it harder to identify products approaching expiry.

Expiry management is not simply a warehouse process. Poor stock rotation contributes to wider food waste challenges across supply chains.

According to the Food Hygiene Certificate, the UK generates approximately 9.5 million tonnes of food waste every year, with waste occurring across manufacturing, distribution, retail, and households.

While not all food waste is caused by inventory management issues, the figure highlights the importance of effective stock rotation, inventory visibility, and supply chain coordination.

The Hidden Costs of Poor Expiry Management

When people think about expiry issues, they often focus on wasted stock.

The reality is usually much broader.

Poor expiry management can lead to:

• product write-offs
• reduced margins
• stock disposal costs
• retailer rejections
• reduced shelf life at delivery
• inventory inaccuracies
• forecasting challenges
• customer service issues

A common mistake is assuming that expiry problems only affect warehouse operations.

In reality, they can affect the entire supply chain.

For FMCG brands supplying retailers, products arriving with insufficient shelf life can create operational problems and damage retailer relationships.

WRAP estimated that total UK food waste reached 10.7 million tonnes in 2021, with manufacturing accounting for 13% of that total by weight. While not all manufacturing waste is caused by expiry management issues, it highlights why inventory control, forecasting, stock rotation, and supply chain visibility matter when reducing unnecessary write-offs and margin erosion. 

Common Expiry Management Mistakes We See FMCG Brands Make

We’ve seen several recurring issues emerge as brands grow.

Relying on FIFO when FEFO is needed

FIFO can work well for products with long shelf lives.

However, brands with multiple batches and varying expiry dates often need more sophisticated stock rotation.

Limited visibility across multiple locations

One issue that frequently catches suppliers out is inventory being spread across several locations.

Without visibility across warehouses, distributors, and fulfilment providers, expiry risks can become harder to identify.

Over-ordering inventory

Poor forecasting can increase the likelihood of stock sitting in storage for longer than expected.

This creates unnecessary expiry risk.

Manual inventory management

We’ve seen brands continue relying on spreadsheets long after inventory complexity has outgrown manual processes.

As SKU counts and retail distribution increase, expiry management often requires stronger systems and reporting.

When FIFO Is Usually Enough

FIFO is often suitable where:

• products have long shelf lives
• expiry dates are less critical
• inventory turnover is consistent
• stock complexity is relatively low

For many non-perishable products, FIFO remains an effective inventory management approach.

When FEFO Becomes More Important

FEFO often becomes increasingly valuable when:

• shelf life is limited
• products move through multiple channels
• inventory is stored across multiple locations
• retail compliance requirements increase
• stock visibility becomes more complex

For many food and drink brands, FEFO can help reduce waste and improve stock utilisation.

What FMCG Brands Should Monitor

Monitoring these areas consistently can help reduce expiry-related costs as operations scale.

FIFO and FEFO Are More Than Warehouse Processes

FIFO and FEFO are often viewed as warehouse procedures.

In practice, they affect much more than inventory movement.

They influence:

• stock availability
• profitability
• retailer relationships
• waste reduction
• forecasting accuracy
• supply chain performance

We’ve seen expiry management become increasingly important as brands expand distribution, introduce more SKUs, and supply additional retail channels.

As operational demands grow, visibility across inventory and stock rotation often becomes just as important as increasing sales.

WFL supports FMCG brands with inventory visibility, fulfilment coordination, forecasting, retail logistics, and day-to-day supply chain management as operational complexity increases.

FAQs

What is the difference between FIFO and FEFO?

FIFO prioritises stock based on when it entered storage. FEFO prioritises stock based on which products expire first.

Is FEFO better than FIFO?

Not necessarily. The best approach depends on product shelf life, inventory complexity, and operational requirements. Many FMCG brands with shorter shelf-life products benefit from FEFO.

Why is expiry date management important in FMCG?

Poor expiry management can lead to waste, stock write-offs, reduced margins, retailer issues, and operational inefficiencies.

Does FEFO help reduce food waste?

Yes. FEFO helps ensure products with the shortest remaining shelf life are dispatched first, reducing the likelihood of stock expiring before sale.

How can FMCG brands improve expiry management?

Improving inventory visibility, forecasting, batch tracking, stock rotation processes, and supply chain coordination can all help reduce expiry-related risk.