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RRP still growing, but hurdles do exist

Retail-Ready Packaging continues to pick up steam in the U.S. But concerns about material costs, overall ROI, and packaging line machinability must be reckoned with.

Two separate pieces are fed into a high-speed folder/gluer to produce the Retail-Ready shipper used by Hormel.
Two separate pieces are fed into a high-speed folder/gluer to produce the Retail-Ready shipper used by Hormel.

Has the bloom gone off the Retail-Ready Packaging rose? Are Consumer Packaged Goods Companies reluctant to expand RRP because they don’t see a clear path to an acceptable ROI? Are purchasing departments pushing back as they realize that a retail-ready shipper holding a dozen units might cost 20% more than a brown kraft RSC holding the same amount?


The short answer to each question is no and yes. In other words, the amount of packaged goods reaching consumers in RRP formats continues to grow. But at the same time, certain observers of or participants in the value chain are beginning to say that effective RRP initiatives that bring benefits to all are not that easy to come by. Consider, for example, this discussion question posted to the LinkedIn Packaging World Group by Wally Petrac, vice president of sales at Pearce Wellwood, a full-service display company specializing in design, printing, co-packing, and delivery of point-of-purchase solutions.


“Is Retail-Ready Packaging still viable? Back in 2009 there was quite a push by Canadian, and later U.S., retailers towards Retail-Ready Packaging. After many CPGs found it difficult to find reasonable ROIs, there seems to have been a slow down in RRP implementation. What have any of you seen or heard?”


Among the comments posted in response was one from Thomas Ciecorka, a packaging engineer, structural designer, and project manager consultant. He observes that while Walmart and Loblaws Canada are still moving forward, the only true believer in the U.S. is Aldi. “The U.S. is not moving ahead quite like in Europe,” notes Ciecorka. “Kroger was moving ahead with its store brands until they found out the cost. They have slowed progress and are looking at only certain items. Walmart is trying to go ahead in the U.S., but many store managers are pushing back, and some in Walmart do not see the savings in the U.S.”


Ciecorka also believes that from an execution standpoint, while the best solution is a proper display tray from which a perforated brown kraft top has been removed, too many companies are settling for a standard brown kraft RSC with a perforation bolted on. This, in his opinion, leaves much to be desired where presentation is concerned. It’s too much of a hybrid as opposed to being something designed to accomplish specific goals in the value chain. He adds that, unlike the European marketplace, no one in the U.S. wants to pay for graphics on RRP. His summation: “The CPGs I have been working with have not embraced RRP. They are preparing for it, and they have done some items, but they are fighting tooth and nail all the way.”


Hormel’s approach
While Ciecorka’s observations about CPGs apply in some cases, they don’t appear to ring true where Hormel is concerned. The Austin, MN, food giant recently adopted a retail-ready display case for pouch-packed Hormel Pepperoni Stix holding five or six individually-packaged dry sausage stix. Twelve of the pouches are placed in the display case, and the cases are palletized 34 per layer and five layers high, for a total of 170 cases/pallet.


This is no brown box with a perf bolted on. It’s an RRP that is carefully and specifically designed to function optimally from point of manufacture to the moment when the consumer picks a primary package or two from the attractive red display tray.


According to Hormel, the price of this case is slightly higher than a standard RSC due to the extra manufacturing process of combining the top and bottom together at corrugated manufacturer Minnesota Corrugated Box. The corrugated manufacturer even had to invest in new equipment to produce this style of display shipper. But Hormel believes that developing this shipper was the right thing to do for several reasons:


• This design reduced the potential for ergonomic issues at Hormel facilities by reducing the number of motions and steps it takes to assemble each case.
• The new display shipper eliminates the need for retailers to use a box cutter to get into the case, so their job is safer.
• The Hormel plant was able to eliminate one inventory of boxes; now that the display tray and cover come glued together, Hormel does not have to stock and manage both cover and display tray inventories at their facility.

According to Hormel, the move to the display case was a Hormel Foods initiative. “It was a collaborative effort among our corrugated supplier, the plant, operations, purchasing, and the R&D packaging group,” says Chad Donicht, senior packaging engineer at Hormel. The two pieces of the display case are combined in one pass to produce a flat blank with an auto bottom and RSC top. At Hormel, these are opened and filled by hand.


The specialty folder/gluer that MC Box uses to make Hormel’s two-part RRP is the Turbox/Top Matcher from Bahmueller (www.bahmueller-usa.com). A sheet-fed machine capable of 10,000 units/hr, it was installed last year, says MC Box President Tim Krebsbach.

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