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In Winning Market Share, AICC Will Make A Difference! AICC 2003 SPRING MEETING. Dwight Schmidt Executive Director, Corrugated Packaging Alliance. Corrugated Packaging Alliance. Confronting the Brutal Facts Industry Response CPA 2002 Review CPA 2003 Action Plan

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in winning market share aicc will make a difference aicc 2003 spring meeting

In Winning Market Share, AICC Will Make A Difference!AICC 2003 SPRING MEETING

Dwight Schmidt

Executive Director,

Corrugated Packaging Alliance

corrugated packaging alliance
Corrugated Packaging Alliance
  • Confronting the Brutal Facts
  • Industry Response
  • CPA 2002 Review
  • CPA 2003 Action Plan
  • Calling All AICC “Hedgehogs”
  • Are We “Built to Last?”
slide3
“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
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 facts1
Confronting the Brutal Facts
  • 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
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 response1
Industry Response
  • Joint committee of AF&PA and FBA members oversee activity

AF&PA MembersFBA Members

I-P G-P

Interstate Inland

Simpson PCA

Weyerhaeuser SSCC

mission part 1
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
Mission: Part 2

To provide a coordinated industry

forum that effectively acts

on competing materials matters

that could not be accomplished

by individual members

slide11
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

  • CCF endorsed by majority of retailers in market segments under competitive pressure; readily available to all
  • We are successful in transitioning retailers’ perception of industry from point solution product sale in supply chain to total supply-chain-solutions partner
slide12
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

slide13
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

slide14

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

  • Identify next corrugated markets susceptible to competitive material threats.
  • Establish cooperative relationships to explore synergy and eliminate redundancy in our work and expense incurred on behalf of our industry.
slide15

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

slide16

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
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 continued
2002 EXTERNAL ACTIVITY (continued)
  • 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
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
ROLE of CPA
  • To coordinate, focus and enable all competing material efforts undertaken at industry level
  • 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 cpa1
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
Willard Bishop StudyFebruary 2002

Determining the Market Penetration of Returnable Plastic Shipping Containers

bishop study participants
Bishop Study Participants

21 individuals, representing 19 retailers, from all three major food store formats

bishop study conclusions
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
slide25

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
slide26

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
slide27

Grape Study Results

Corrugated Common Footprint Containers …

  • Allowed a 5 – 9% larger payload of fruit
  • Cooled at the same rate
  • Showed no difference in moisture loss ... than RPC’s
slide28

Tree Fruit Study Results

Corrugated Common Footprint Containers …

  • Allowed a 6% larger payload of fruit
  • Cooled slightly slower, but faster than traditional 8-down corrugated box
  • Generated significantly less bruising … than RPC’s
slide29

Strawberry Study Results

Corrugated Common Footprint Containers …

  • Allowed an 11% larger payload of fruit
  • Cooled at the same rate
  • Generated significantly less bruising ... than comparable RPC packs
other tools
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
2003 Goals
  • Revise our produce focus from retailer CCF specification preference to commodity by commodity implementation challenge to RPC’s
  • Implement CCF standard for case-ready meat
  • Make revisions to “Full Disclosure” to make it more user-friendly as well as generate and publish supply-chain case studies for key commodities
  • Fight pro-returnable legislation at all levels
2003 goals1
2003 Goals
  • 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 goals2
2003 Goals
  • Study RPC poolers to understand their strengths, weaknesses and economic drivers to better predict corrugated’s vulnerability by market segment
  • 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

slide41

Twin Cities Project

“A Better Way” Campaign

slide42
“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 hedgehogs1
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
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 last1
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 last2
Built To Last?

“ The battle goes not to the strong alone, but to the vigilant, the active, the brave.”

- Patrick Henry