Some manufacturers are dreading it, but Retail Ready Packaging (RRP) is on its way. How does it work, who will pay for it, and who stands to benefit most? Hugh Westbrook reports as an industry braces itself for a subtle yet major change to international supermarket shelves.
Put simply, RRP sees products arriving in a supermarket ready to be stacked, rather than unpacked and then repacked. It means that a supermarket can have much more control over how a product will look when it is on a shelf. Design is not just about how the product packaging works on a practical level – the outer cardboard or plastic case also becomes part of the aesthetics of a product because it will be placed straight on the shelf to continue housing it.
The practical benefits of RRP are that it allows direct case-to-shelf replenishment of goods in one movement and promises improved identification and recognition of goods to avoid the wrong product ending up in the wrong place.
The idea also encompasses Shelf Ready Packaging (SRP), but RRP is regarded as a broader term that also includes easier ID and opening.
Products that lend themselves well to RRP include canned goods and confectionery, while there is also a growing trend for chilled goods to be packaged in this way.
The UK’s major supermarkets are becoming heavily involved in RRP, and Tesco is preparing to announce a number of new initiatives at the Institute of Grocery Distribution’s RRP conference this week. It already has 6,000 RRP lines, though most are currently in health and beauty, and will reveal plans to extend RRP to its Express and Metro stores and overseas.
However, the supermarkets are not giving the initiative much publicity. On a rudimentary search of corporate press releases, just-food.com was able to find nothing about the subject, while we had to explain the concept to press officers to see if they could understand what we were asking about, rather than them automatically having an answer.
Those involved in RRP on the retail side clearly have a task on their hands to bring the idea to the forefront of people’s minds.
There is also much work to do for all the others involved in bringing products to shelves, such as other manufacturers and notably the packaging industry.
For the manufacturers, there is the need for a new way of thinking. Rather than starting from the standpoint of finding the most appropriate packaging material and working forwards from there, they now have to consider how the product will look on a shelf and work backwards instead.
With supermarkets also able to calculate more precisely the space a product will take up on a shelf, together with more details on sale and replenishment, it is clear there is a new challenge for manufacturers in how their products arrive to be stacked. There could therefore be issues of increased costs for those supplying supermarkets.
For the packaging industry itself, there are pros and cons. The positive side is that RRP asks fresh questions and poses fresh challenges to the industry, which many are keen to embrace. UK group DS Smith, for example, makes a virtue of its innovative approach to packaging solution and is embracing RRP with delight.
The downside of course is that with the retailer beginning to make more demands, the packaging industry might have less autonomy over what it can produce.
The trend could also lead to increased costs. Speaking at an Australian Institute of Packaging conference last year, the institute’s vice president George Ganzenmuller said that the move was not ideal for the packaging industry.
However, he did note that there are challenges peculiar to Australia because of some of the geographical distances involved between producers of fresh products and retailer, challenges which would not be true elsewhere in the world.
It is clear that RRP is something we will see more and more of as supermarkets look to increase efficiency and control the look of their stores more. The major groups needs to be aware of it, and manufacturers also need to start thinking about how best it will work for their products. Supermarkets have certain issues to consider, such as the one-off costs of introducing new packages, but those in the industry believe this will be offset by the long-term benefits.
But is also interesting to speculate how much the consumer will notice. While one of the agreed benefits of RRP is that the entire look of a product on the shelf can be controlled, how many shoppers really notice the outer packaging when they pick a can of beans or a packet of cheese off the shelves? Over the next couple of years, it will be interesting to see whether the benefits of RRP are seen more on costs for supermarkets or whether it actually leads to increased sales.