RETAILERS DEBATE MATERIAL FOR PRODUCE CONTAINERS

ROBERT VOSBURGH

SAN DIEGO -- In the end, after all the studies, it will be customer acceptance that determines whether reusable plastic containers replace corrugated cardboard in the transportation and merchandising of produce.

But before consumers even see RPCs in their favorite store, there is a host of critical internal factors that retailers must weigh in deciding what works best for them.

"Obviously, reducing costs is a goal we all have," noted Al Garner, vice president of produce operations for Jitney-Jungle Stores of America, Jackson, Miss. "But, this needs to be quantified, and the results that we find shared collectively."

Garner and other retailers and packaging experts made their comments during the United Fresh Fruit and Vegetable Association's annual convention, here.

Hard, practical data on the use of RPCs for produce is virtually non-existent in the United States, because retailers are just now beginning to seriously test the system.

Why all the hype? More than just a way to hold watermelons or MacIntosh apples, containers represent much larger issues, such as labor, transportation, storage and product quality, among other things. And, because they are used at all stages of the industry -- from field to warehouse to store floor -- even small changes can create a substantial ripple effect throughout the industry.

The implications are enormous, and appropriately, retailers are closely monitoring their RPC tests. In one case, Wal-Mart, Bentonville, Ark., is in the process of implementing RPCs in two entire divisions, after a successful six-store test in the Ft. Meyers, Fla. area, according to Bruce Peterson, vice president of perishables.

"In each of the six test stores, [produce] shrink has gone down measurably; and sales have gone up measurably," he said.

One of the primary areas of concern -- container shrink -- was examined during the first phase of the test, which involved "a couple of pallets" of melons and broccoli, which were packed in RPCs at the grower/shipper source and sent to a Wal-Mart distribution center, some 1,500 miles away.

"If you lose a lot of these cases throughout the distribution network, the shrink factor [prohibits] making the system work," said Peterson.

Phase two of the test, in 1998, examined shrink potential between the distribution center and the store. The findings surprised officials.

"We determined, in fact, that we had less than 2% shrink of containers in the system. It surprised me a whole bunch," he said.

Shrink is not an issue with corrugated cardboard containers, as much as recycling is. The grocery industry, the largest single user of corrugated in the United States, has formed strong partnerships with paper companies to reap extra profits, according to Oscar Katov, representing the American Forest & Paper Association, Washington.

He cited statistics from Albertson's showing that, in 1997, the chain reported the recovery of 161,000 tons of corrugated from its stores, "and sold that tonnage for $12 million," he said.

"Earning $12 million from the sale of groceries would require about $240 million in gross sales, a multiple of about 20," he noted.

While RPCs currently operate with size restrictions, corrugated containers are more readily adaptable to changes in size, and be customized with graphics that attract customers, said Katov.

"Today, vibrant graphics give consumers brand recognition with just a glance," he said. "And time-hungry consumers often rely on brand names for quality recognition when making purchasing decisions."

Research continues into strengthening corrugated's ability to facilitate cooling, resist the growth of mold and moisture, as well as permeation by foreign odors.

The paper industry continues to research "ways to lighten [corrugated's] weight using edge-crush testing to determine stacking strength and stability," he said.

Wal-Mart's Peterson, who stressed he is not a blind advocate of RPCs, acknowledged that the burgeoning RPC option presents several challenges at the retail level, namely lack of the "optimum" box; the capital costs required to purchase new display fixtures that accommodate the RPCs; and an acceptable method of retrieving containers that hold rejected product.

Conversely, RPCs demonstrate better venting capabilities and their built-in handles have ergonomic implications, since they force different lifting techniques, he said.

In-store, Peterson said that customer reaction has been positive, warranting the two-division rollout. The initial test showed officials that, not only have shoppers accepted RPCs, but the devices can increase produce sales.

"The fixture itself cuts down on the amount of inventory you've got on display, which forces [associates] to rotate the product more frequently," he reported. "And, because it's already display-ready, the ease of making that happen actually cuts down on labor."

Dr. Paul Singh, a panelist and professor with Michgan State University's School of Packaging, East Lansing, Mich., concurred. "Anything that's going to work in the future predominantly is cost-justified in a big way," he said.

To this end, the paper industry has been working to offset the costs associated with the produce industry's reliance on waxed corrugated cardboard containers, 1.5 million tons of which is used annually in the shipment of perishables, said Katov.

"For grocers, the waxed corrugated box is troubling in three ways: the cost of extra handling in the back room to identify the box, the cost of its disposal and the loss of recycling revenue from mistaken identification when clean [cardboard] is tossed into the compacter together with the waxed box," he said.

The industry is researching the possibility of a repulpable wax which would permit the co-mingling of waxed corrugated and clean corrugated in the same bin, though to date, an acceptable formula has not been developed, he said.

In the meantime, a coalition of paper and food industry organizations has implemented a box marking program, in which the words WAX/CERA/CIRE -- in English, Spanish and French -- is clearly printed in large letters on box flaps.

Store-level associates are alerted to the identification campaign through posters that can be placed in break rooms or near the baler. According to Katov, more than 50,000 posters have been distributed to large and small retailers since the program was announced last year.

A key RPC concern is sanitation. According to Wal-Mart's Peterson, a third-party company handled transportation and sanitation of used containers during the store's Florida tests, with satisfactory results.

For supermarkets, the opportunity presented by RPCs poses a fundamental change in the way in which the industry has evolved. The panelists agreed that retailers are obligated to examine the feasibility of RPCs and their compatibility with their overall business practices.