KRAFT, PILLSBURY TO USE THIRD-PARTY PALLETS

LISA A. TIBBITTS

PARK RIDGE, N.J. -- Two of the country's biggest brand marketers have jumped into the third-party pallet pool. Kraft General Foods, Northfield, Ill., has agreed to make most of its retail food lines available to customers on pallets from Chep USA here.

Pillsbury, Minneapolis, plans to ship its entire retail line of food products on Chep, thus becoming the first manufacturer to offer third-party pallets nationally in all major food categories.

Both companies cited their commitment to Efficient Consumer Response as the primary reason.

"We believe the program is an excellent application of these principles," said Richard Mayer, chairman and chief executive officer of KGF North America and co-chairman of the Joint Food Industry Executive Committee on ECR, in a statement.

These pallets are "a key factor in reducing waste from the system," said Steve Gartner, vice president of distribution operations for Pillsbury, in a statement.

Improved customer service, higher productivity and reduced product damage were some of the benefits listed by KGF. Pillsbury expected to reduce transportation costs and product damage and improve warehouse efficiency.

Shipping from more than 50 plants and distribution centers around the country, KGF estimated it would make nearly five million deliveries on Chep pallets next year. The only segments of the company not participating in the program are dairy-cultured products, bakery products, frozens and Kraft Food Service.

The company's Oscar Mayer plant began shipping on the pallets in January 1992. The trial was then expanded to Kraft USA retail products in July 1993, and General Foods products in October 1993.

Beginning in January, KGF will use Chep pallets for its cereals, cheeses, coffees, ready-to-drink beverages and processed meats. The products include Kraft, Oscar Mayer, Post, Velveeta, Maxwell House, Jell-O, Philadelphia, Stove Top, Seven Seas, Miracle Whip, Country Time and Kool-Aid brands.

Pillsbury began shipping its refrigerated dough products to participating distributors last year. The company has since increased its offerings to include its frozen and dry grocery lines to direct-buying retail and wholesale grocery customers through its distribution network.

Pillsbury's frozen food line comprises Green Giant vegetables; Jeno's, Totino's and Pappalo's pizzas, and Pillsbury Toaster Strudel pastries. The dry grocery line includes Green Giant and Joan of Arc canned vegetables; Pillsbury flour, baking mixes and frostings, and Hungry Jack instant potatoes, pancake mix and syrup. The refrigerated line of ready-to-bake dough products includes a wide variety of biscuits, cookies and breads. Shipping on Chep pallets will begin next month.

Although traditional pallet exchange programs still dominate the industry, third-party pallet pools are gaining in popularity.

Other companies currently using a third-party system include Kellogg Co., Battle Creek, Mich.; Campbell Soup Co., Camden, N.J., and Supervalu, Minneapolis.

Chep pallets are shipped from more than 1,900 manufacturing locations to more than 2,700 receiving distributor locations, representing some 85% of the groceries marketed in the U.S. Started in 1990, the company now services grocery manufacturers, distributors and retailers from more than 165 depots throughout the country.