Wood-grain RPCs for Wal-Mart drive IFCO growth

Wood-grain reusable plastic containers designed specifically for Wal-Mart Stores Inc. helped RPC giant IFCO rack up big revenue gains in fiscal 2016.

IFCO tallied revenues of $992 million for the year, 16% more than in fiscal 2015, said Wolfgang Orgeldinger, the company's CEO.

The wood-grain RPCs created for Wal-Mart were a major driver of that growth, Orgeldinger said. More than 4 million of the containers have been sent to Wal-Mart suppliers, he said.

Growers across North America are packing product in the containers, Orgeldinger said.

John Forrest Ales, a Wal-Mart spokesman, said the RPCs should be in 3,000 stores by the end of 2016.

"We're excited about creating a visually great, farmer's market feel that emphasizes the freshness and quality of our produce," he said.

The containers' design helps keep product fresh and extends shelf life, and they're sturdy and easier to handle than other containers, Ales said.

Because the containers are reusable, they're better for the environment and they keep Wal-Mart's costs down, allowing the company to pass along savings to consumers, Ales said.

Wal-Mart and its suppliers aren't the only ones who like the look and performance of the containers, Orgeldinger said.

"Feedback we've received from Wal-Mart shoppers indicates most consumers notice a change in the produce section when they enter the store," he said.

Bill Bishop, founder of Barrington, Ill.- based Willard Bishop Consulting and chief architect for brickmeetsclick.com, said two main factors are driving changes in produce merchandising: efficiency and authenticity.

With its conventional RPCs, Wal-Mart became more efficient, he said. Now, with the wood-grain version, they've also tapped into consumers' desire for authenticity.

"When you work on efficiency, there's often a trade off," he said. "But when you put the two together, there's a synergy. What they've done is quite clever and consistent."

It's a good example, Bishop said, of Wal-Mart's methodical, "test and learn" approach to innovation, which he said is working to the chain's advantage.

RPC wash technology also pays dividends

Also driving revenue growth at IFCO is the company's new SmartGuardian proprietary RPC wash process control technology, Orgeldinger said.

The system, which monitors, controls and reports critical control point parameters for RPC cleaning and sanitation, has been installed and is active in all IFCO service centers globally, with the exception of the company's two new service centers in Canada, Orgeldinger said.

It should be fully operational in those facilities by the end of 2016, he said.

Orgeldinger cited other reasons for IFCO's revenue growth in fiscal 2016:

• Increased RPC use by existing customers;
• Major new retailer contracts, especially in Europe; and
• Expansion into new markets via acquisition of RPC providers in Japan, Chile and Colombia;