Returnable plastic crates - cartons packaging standardisation - market interaction and change opportunity (AH04036)

This is a final research report from Hort Innovation’s historical archives. Please note that as these reports may date back as far as the 1990s, the content and recommendations within them may be superseded by more recent research.

What was it all about?

The project highlighted the following key issues:

1. RPC’s had approximately 7 per cent and 6 per cent share respectively of the US and Western European markets for short shelf life produce packaging
2. In two interviews, with Armour’s and Schruer’s, RPC’s were seen to be significantly cheaper than the carton equivalent. Laver’s avocado property was in North Queensland. RPC cost was approximately 25 per cent higher than the carton equivalent in this case.Three interviews was not sufficient to draw a conclusion and their needed to undertake further analysis, of a broader representative sample, to better understand this outcome prior to any meeting with Coles
3. The RPC model was initially designed to enable producers and packers to obtain an indicative cost comparison between cartons and RPC equivalents. It was not designed to develop detailed and specific information for negotiation with Coles
4. The model was not simple and intuitive to use and, particularly the level of transparency, could be improved substantially by:
   
   1. Redrafting the Help Manual to include the various items in this report, and others as appropriate
   2. Improving the quality and quantity of information in the Input Help Screens
   3. Providing a detailed Guide to Interpreting Results
5. The RPC model had weaknesses in terms of Model design logic that must be addressed in the Help Manual
6. The RPC model required increased flexibility in order to better compare relevant carton and RPC scenarios, including:
   1. Capability to input RPC payload that compares with a specific carton payload
   2. Different buffer stock assumptions for cartons and RPC’s
   3. Multiple pallet configurations and vehicle load configurations for any specific scenario
   4. Different vehicle load configurations for cartons and RPC’s
7. There were specific modelling issues that required addressing and rectification, including:
   1. No recognition, in the calculation of pallet and RPC hire charges, of weekends and public holidays
   2. There were no allowances for, and calculations of, inventory (excluding safety stock):
   3. Pallets to hold carton inventory
   4. RPC’s

These issues were significant and needed to be addressed, either in the Model directly or by reference in the Help Manual, before Hort Innovation (which was then Horticulture Australia Limited) promoted the RPC model to its constituents.

8. There were specific costs that needed to be included as input fields in the RPC model, including:

• Cost to shrink wrap cartons to pallets (identified at both site visits)
• Cost to add a label to cartons

These issues were significant in as far as their absence may have borught the overall credibility of the model into question with an informed User. Therefore they needed to be addressed, either in the Model directly or by reference in the Help Manual, before the then Horticulture Australia Limited promoted the RPC model to its constituents.