Tetra Recart Gaining Acceptance Of Brand Owners, Retailers, Consumers

New product from Hain Celestial, recent research and private label success all point towards rapid growth of Tetra Recart in center-store

Vernon Hills, IL – Since Tetra Pak customer Hormel rolled out the first U.S. products in Tetra Recart packaging in fall 2005, the new can alternative has made great strides in gaining acceptance by consumers, retailers and brand owners.

"The momentum of this packaging innovation in the U.S. has largely been an effect of its overall benefits," said Jeff Kellar, vice president of strategic business development at Tetra Pak. "Tetra Recart improves look and taste characteristics of prepared food products and provides the food manufacturer and grocer with a cost-competitive alternative to cans."

Three recent developments are pointing to the continued and rapid growth of Tetra Recart.

First, new products continue to roll out in the package. Hain Celestial has just transitioned an organic bean product from cans to Tetra Recart cartons. Second, an independent study into the efficiencies of Tetra Recart packaging in distribution and at retail provides a strong case for Tetra Recart as a cost-saving measure to grocers. And, a market test executed by some of the nation's top retailers has demonstrated the power of the package and spurred another grocers to begin private labeling product in the Tetra Recart package.

Westbrae Natural Organic Beans goes to Tetra Recart
In September, Hain Celestial introduced its Westbrae Natural Organic Beans in the Tetra Recart package. This 30-year old brand was drawn to the package because of its ability to preserve the nutritional value and flavor profile of the product in a shelf-stable format without preservatives. This was particularly important for an organic product. The Westbrae Natural Organic Pinto, Garbanzo, Kidney and Black Beans in 14.2 oz. Tetra Recart containers hit shelves at natural food stores in October 2005.

Also important to the company, which focuses on providing healthier foods and maintaining a healthier environment, are the efficiencies created by packaging food in the
Tetra Recart package. Hain Celestial cited a recent report that showed Tetra Recart's "30% more efficient use of shelf and cupboard space" than cans and the fact that Tetra Recart is "lighter than cans" as important factors in their decision to upgrade the packaging.

Efficiency study demonstrates benefits of Tetra Recart over cans
A Willard Bishop Consulting Study conducted in early 2005 found that replacing cans with Tetra Recart packaging in the canned vegetables area could account for over $2,121 in value per store annually. For a 200-store chain, this value would be close to $425,000.

The key difference in value lies in the operating costs associated with shipping and storing an efficient square container as opposed to the traditional can.

Impressive statistics include

• Tetra Recart allows for 16% more packages on an inbound truck
  
• More efficient warehouse handling ($.0014 cost per package for cans, $.0009 for Tetra Recart
  
• Less space on cubed-out truck from DC to store ($.0047 per can, $.0031 per Tetra Recart package)
  
• More efficient stocking – less labor cost ($.0169 per can, $.0152 per Tetra Recart package)
  
• 44% more packout on a 4-foot shelf (400 ml Tetra Recart = 780 units; 14.5 oz. cans = 540 in the same space)
  
• More variety in the same space (Tetra Recart needs only 1 facing where cans need 2)
  
• Replacing cans with Tetra Recart frees up 4 feet per store and reduces out-of-stocks

Also contributing to retailer benefits is the improved billboard area on the square container as opposed to the can. The increased surface area and printing capabilities make for an attractive and efficient display on the shelf.

While this study focused on the canned vegetables area, similar efficiencies and values can be brought to the soup and prepared foods areas of retail, where Tetra Pak's customers are already making inroads with broths and products like Stagg chili. As Tetra Pak continues to work with brand owners to identify the next products appearing in Tetra Recart packaging, retailers are also helping to drive a shift from cans to Tetra Recart.

Successful test spurs increased retailer interest and activity in Tetra Recart
Earlier this year, Tetra Pak partnered with several of the nation's largest retailers to conduct a test of a Tetra Pak-created tomato product in the canned tomato space. Tetra Pak worked with retailers to develop a new brand, Corelli, which would be used to launch the new tomato products. The 12-week test in three retail chains focused on 4 products (diced tomatoes, crushed tomatoes, tomato sauce and Italian diced tomatoes – all 13.8 oz.) in a subset of each chain's stores. The tomatoes were processed and packaged in Italy and imported to the U.S.

Despite the challenges of a basic in-store display, no previous presence in the marketplace and no external marketing support, the Corelli product performed remarkably. Corelli sold 29% more units per sku on average than similar canned products. During the test, Corelli represented over 7 percent of the category dollars and over 9 percent of tomato category volume.

Because of the success of Tetra Recart in the test, all three retailers are considering future product opportunities. Kroger Inc. was so impressed with the results that they launched their own pilot test under the Corelli label for the four tomato products starting in late 2005. Kroger is also taking the Corelli brand to the sauce category, with national rollout of Corelli pasta sauces in all 1,800 stores in January 2006. The flavors will include Tomato Basil, Three Cheese, Marinara with Burgundy, Garlic & Olive Oil.

It is this type of retailer activity that Tetra Pak sees as a major driving force in the growing acceptance of Tetra Recart. As the company moves forward, it is the following benefits that will present the greatest amount of value:

• Tetra Recart is made from renewable resources and uses less material than traditional packaging
  
• Tetra Recart packaging is lighter than cans
  
• Tetra Recart containers are easy to store, stack, open (no can opener), reclose, empty and dispose of
  
• It allows for premium, high quality foods
  
• Tetra Recart maintains all natural benefits without preservatives

"We believe that Tetra Recart can, and should, replace the can in center-store," said Kellar. "Grocers are looking for ways to reinvent the area and this package delivers by allowing for better variety, better facings, new products and financial efficiencies.

"And, brand owners are seeing the financial benefits as well. Since the packaging material is cheaper, Tetra Recart is a cost-competitive option for prepared foods and adds to the overall value of the product by improving quality characteristics like look and taste."

As Tetra Recart packaging gains momentum, Tetra Pak continues to work with brand owners and retailers simultaneously to identify the next opportunity and define more strongly the benefits of the package as it relates to a variety of food items.

SOURCE: Tetra Pak