Transcript Corrugated Packaging Alliance

In Winning Market Share,
AICC Will Make
A Difference!
AICC 2003 SPRING MEETING
Dwight Schmidt
Executive Director,
Corrugated Packaging Alliance
Corrugated Packaging Alliance
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Confronting the Brutal Facts
Industry Response
CPA 2002 Review
CPA 2003 Action Plan
Calling All AICC “Hedgehogs”
Are We “Built to Last?”
“Competing materials are
reducing the demand for
corrugated packaging and
threatening the viability
of your industry, your
company and your
personal success.”
- Dwight Schmidt
Confronting the Brutal Facts
• RPC’s have taken several markets: milk,
beverage, automotive, some redistribution
• Several areas are under attack: produce,
case-ready meat
• Future areas of concern: closed-loop
distribution systems like fast-food and salty
snacks
• RPC’s go to market as a supply-chain
solution; historically corrugated has sold to a
point along the supply chain
Confronting the Brutal Facts
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Increasing imports, decreasing exports
U.S. manufacturing decreasing
Retailer purchasing power consolidating
Product safety driving many decisions
Super-Centers with high volume and low cost
are fastest growing retail segment
• Supply-Chain solutions are being required to
lower costs
Industry Response
• Corrugated Packaging Alliance: An organized
industry-wide effort to address competing
materials
• Sponsored by American Forest and Paper
Association (AF&PA) and the Fibre Box
Association (FBA)
• Funded by containerboard producers through
AF&PA assessment (23 companies)
Industry Response
• Joint committee of AF&PA and FBA members
oversee activity
AF&PA Members
I-P
Interstate
Simpson
Weyerhaeuser
FBA Members
G-P
Inland
PCA
SSCC
Mission: Part 1
To foster growth and profitability
of corrugated in applications
where it can be demonstrated,
based on credible and
persuasive evidence,
that corrugated should be
the packaging material of choice
Mission: Part 2
To provide a coordinated industry
forum that effectively acts
on competing materials matters
that could not be accomplished
by individual members
OBJECTIVE A
Maximize corrugated’s share in market segments
under direct competitive threat, where it can be
proven that corrugated is the best solution
DELIVERABLES
1. CCF
endorsed by majority of retailers in market
segments under competitive pressure; readily
available to all
2. We
are successful in transitioning retailers’
perception of industry from point solution
product sale in supply chain to total
supply-chain-solutions partner
OBJECTIVE B
Prevent government and other organizations from
biasing packaging choices in marketplace
DELIVERABLE
No legislation favorable to RPC’s is passed and no
misrepresentation of evidence goes unanswered
OBJECTIVE C
Address marketplace concerns regarding
impact of non-recyclable corrugated packaging
DELIVERABLE
Waxed corrugated replaced by corrugated
packaging alternatives that can be recycled
in normal OCC waste stream
OBJECTIVE D
Implement coordinated communication strategy
to inform target audiences of progress in
corrugated market developments, and to
enhance attitudes and behavior toward
the corrugated industry and its products
DELIVERABLE
We are successful in changing attitudes
and behaviors of targeted audiences
with our messages
OBJECTIVE E
Identify next corrugated markets
susceptible to competing material threats
DELIVERABLE
Competing materials don’t get a foothold
in another market without our knowledge
OBJECTIVE F
Establish cooperative competitive materials
relationships to maximize synergy and eliminate
redundancy in work and expense incurred
on behalf of the industry
DELIVERABLE
Relationships established, synergies identified and
expenditures minimized — within budget
2002 EXTERNAL ACTIVITY
• Established retail contacts including
14 face-to-face meetings
• Softened Wal-Mart’s stance on RPC’s vs. CCF
• Developed Draft Standard for CCF for case-ready
meat, visited major meat processors and retailers
to receive input
• Received endorsement from Sam’s Club
on CCF for produce
• Completed successful commodity studies for
grapes & strawberries and published findings
2002 EXTERNAL ACTIVITY
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• CCF containers approved in variety of fruit
commodities (grapes, strawberries, melons,
tree fruit, citrus, apples, etc.)
• Kroger committed to using CCF and has been
requesting it
• Facilitated use of CCF throughout SuperValu
• Conducted and published Willard Bishop Study
showing low RPC penetration, but higher
penetration in some commodities
2002 INTERNAL ACTIVITY
• Presented industries’ point of view at nine forums
• Established Executive Director position, office
and CPA identity
• Worked out infrastructure, deliverables, action
items, budget
• Revised Plan below objective level
• Visited senior managers of seven AF&PA/FBA
members to discuss Plan and progress
• Developed Comprehensive Communications Plan
ROLE of CPA
1. To coordinate, focus and enable all competing
material efforts undertaken at industry level
2. To identify and fund projects that generate
factual information, and communicate
information to positively affect attitude and
behavior of those who influence use of
corrugated
ROLE of CPA
“Facts are stubborn things;
and whatever be our wishes, our
inclinations, or the dictates
of our passions, they cannot alter
the state of facts and evidence.”
- John Adams
Willard Bishop Study
February 2002
Determining the Market
Penetration of Returnable
Plastic Shipping Containers
Bishop Study Participants
21 individuals,
representing 19 retailers,
from all three major
food store formats
Bishop Study Conclusions
• Not much RPC penetration, except Wal-Mart
• Retailers like and want to adopt Common
Footprint – we need to make sure it’s available!
• Retailers have 3 choices: Common Footprint,
RPC’s, traditional corrugated
Bishop Study Conclusions
• Retailers concerned about up-charges they have
to pay grower/shippers – separate fact from
fiction while retaining value-added position
• Display-ready CCF not always required
• Wax containers continue to be vulnerable to
RPC’s; retailers want CCF without wax and ice
Credible Evidence Studies
• Conducted by University of California - Davis
• Sponsored by FBA and RPCC (Reusable Pallet
and Crate Coalition)
• Purpose: To compare existing corrugated
packaging used to ship produce with RPC’s
and Corrugated Common Footprint
• Commodities: Grapes, Tree Fruit and Strawberries
Grape Study Results
Corrugated Common
Footprint Containers …
1.
Allowed a 5 – 9% larger
payload of fruit
2.
Cooled at the same rate
3.
Showed no difference in
moisture loss ... than RPC’s
Tree Fruit Study Results
Corrugated Common
Footprint Containers …
1. Allowed a 6% larger
payload of fruit
2. Cooled slightly slower,
but faster than traditional
8-down corrugated box
3. Generated significantly
less bruising … than RPC’s
Strawberry Study Results
Corrugated Common
Footprint Containers …
1.
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Allowed an 11% larger
payload of fruit
Cooled at the same rate
Generated significantly
less bruising ... than
comparable RPC packs
Other Tools
• “Full Disclosure” Software
– Activity-based costing
– Unbiased tool
– New updates in 2003
• Collateral Material for Industry Members
• Comprehensive Communications Plan
– Trade Shows
– Advertising
– Press Releases
2003 Goals
1. Revise our produce focus from retailer CCF
specification preference to commodity by
commodity implementation challenge to RPC’s
2. Implement CCF standard for case-ready meat
3. Make revisions to “Full Disclosure” to make it
more user-friendly as well as generate and
publish supply-chain case studies for key
commodities
4. Fight pro-returnable legislation at all levels
2003 Goals
5.
Collect and communicate with retailers the
industry’s ongoing wax replacement efforts
while aligning with AF&PA Containerboard
Technical Committee to define single waste
stream wax replacement criteria
6.
Execute comprehensive Communications Plan
to affect behavior of key audiences and place
more information in hands of industry’s front
line sellers
2003 Goals
7. Study RPC poolers to understand their
strengths, weaknesses and economic drivers to
better predict corrugated’s vulnerability by
market segment
8. Establish cooperative relationships directly
with Canada and Mexico and with rest of world
through ICCA
9. Leverage maximum impact on 2003 goals
within approved budget
In Winning
Market Share,
AICC CAN Make
A Difference!
Calling All AICC
“Hedgehogs”
Twin Cities Project
“A Better Way” Campaign
“STOP SHREDDING MONEY”
“Would you buy a new wheelbarrow after every trip?”
“What if you tossed the toaster after every breakfast?”
“What if you threw out the baseball after every pitch?”
Calling All AICC
“HEDGEHOGS!”
• Sponsored by SWMCB and RPCC
• Hosted workshops for local businesses
• Began direct mail campaign
• Hosting website: www.swmcb.org/better-way
• Market research
• Marketing plan
• Utilizing tax dollars for interest-free loans
Built to Last?
CPA’s Role:
• Make direct contact to challenge claims
• Alert lobbyists to prevent spread
• Develop public relations campaign
• Remain active in all areas of competing materials
Built to Last?
AICC “Hedgehog’s” Role:
• Educate and arm your
sellers with information to
fight returnables
• Formulate strategies that
influence behaviors of
your customers
• Keeping vigilant
to save your markets
Built To Last?
“ The battle goes not to the
strong alone, but to the
vigilant, the active, the brave.”
- Patrick Henry
In Winning
Market Share,
AICC CAN Make
A Difference!