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Retail View: Retail-ready advantage driving RPC increases

With the development of wrap-around banners and other graphics for in-store use, the use of reusable plastic containers in the produce industry are on the rise, in part because of their retail-ready capability.

At least that is the view of Hillary Femal, vice president of global marketing for IFCO Systems Inc. in Tampa, FL, who recently told The Produce News that IFCO is focusing its efforts on creating retail-ready solutions for the supermarket community.

IFCO, she said, has developed a "valuable suite of merchandising aids" to help retailers use an RPC in their store as an attractive display-ready product. Signs that can clip on to an RPC have been developed, as have vinyl banners that can wrap around a stack of RPCs, creating an attractive display.

One of the challenges of using RPCs within the store has been their lack of labels. Typically an RPC is shipped with only a small label affixed on the side. Their major drawback as a display-ready container has been that lack of graphic appeal, which can be accomplished rather easily by using a high-graphic corrugated container - either stacking cartons or utilizing a larger bin format.

Femal said that by utilizing these add-on banners or clip-on graphics, retailers can achieve that all-important connection to farmers that shoppers are often looking for today.

The custom-made banners have the flexibility to tout the grower or retailer, or both. She said some retailers have preferred their own information on the banner while others want the grower highlighted.

In any event, these new merchandising aids allow RPCs to compete against other containers in this growing sector.

Overall, Femal said that RPCs continue to gain market share that is driven largely by retailer demand.

"RPCs are very much mainstream," she said. "Most of the major grocers are using them for at least some of their items."

At this point, Femal said much of the growth is coming from retailers expanding their use and adding commodities to their mix. She estimated total market share in the U.S. produce sector at 10-15 percent.

A typical grower-shipper user of RPCs is Ratto Bros Inc., headquartered in Modesto, CA, in the San Joaquin Valley.

"We started using them in 2007, and now about one-third of what we ship goes out in RPCs," said Frank Ratto, the company's marketing manager and one of four Ratto cousins that make up the senior management of the longtime grower-shipper. "Honestly, the use of RPCs are driven by retail. If a retailers wants it, we use them."

The firm ships a plethora of vegetables, including many different herbs and greens. Ratto readily admits that using RPCs is a bit of a challenge in the field. They are heavier than corrugated cartons and require more effort to set them up.

But he also said that the company's "wet vegetables look better when they are shipped in an RPC. They definitely have their advantages."

Femal believes that product is protected better when shipped in the rigid RPC, and she said grower-shippers and retailers experience less shrink and better quality delivered to the consumer.

She said RPCs are priced competitively with corrugated containers as that container, which is the market leader in terms of volume, pretty much dictates the price of these reusable plastic containers.

"I believe in every instance we have an equal or lower price compared to the corrugated carton," she said.

Femal said the critical mass of RPCs being used has reached the point where returning them is a simple part of the process.

At the store level, the containers are collapsed and returned to the distribution center, where IFCO arranges for a pickup. In some instances -- for very heavy users -- an IFCO trailer is on the premises of the distribution center and is hauled away by IFCO when full.

Femal said there may be some small retailers in the far reaches of a rural community that may have difficulty figuring out the logistics, but the vast majority of retailers in this country can initiate an RPC program without concern about the logistics piece.

In fact, at a recent industry event in California, John Frietas of IFCO revealed that about 50 percent of the individual supermarkets in California currently handle RPCs for at least one commodity. He said many major retailers have been on board for quite awhile and now the push is to work with the wholesale distributors serving the vibrant independent retail community in the Golden State.

Frietas added that similar efforts are ongoing throughout the country.

Femal said there is an RPC for almost every fresh produce commodity. "Watermelons are the only product I can think of that we can't accommodate," she said.

She said the company does have some foodservice business with the larger distributors, but the foodservice sector is a difficult nut to crack because it is so fragmented.

"Creating critical mass is a challenge," she said.