AN mamnv mm M. Wm .mmcmamaop moouc: man (a m. Durand M. A. MICHIGAN isms muss Waiter Robert-v Mth 1951 ' I . 0.4-)“ ”—2" . .1 This is to certify that the thesis entitled An Inquiry Into The Gontralised Was 0!. Produce presented by Walter R. Hem has been accepted towards fulfillment of the requirements for ___“:A:_deqree inmnulinolo Gun-i. calm in food Dietrflmtion Major pr fessor AN INQUIRY INTO THE CENTRALIZED PREPACKAGING OF PRODUCE A THESIS Submitted to the School of Graduate Studies of Michigan State College of Agriculture and Applied Science In Partial Fulfillment of the Requirements for the Degree Master of Arts Curriculum in Food Distribution Department of General Business by Walter Robert 3181198 July 1951 ACKNOWLEDGMENTS Sincere thanks goes tothe National Tea Comparw for making this study possible, and especially to Mr. H. L. Martin, Personnel Director, who has been so helpful in every possible way. . Also Dr. Kenneth Wilson, Director of the Curriculum in Food Distribu- tion, is to be thanked for his capable instruction in the classroom, and helpful advice, which has paved the way for the writing of this thesis. Finally, appreciation is expressed to the men in the prepacheging industry, the various manufacturing concerns, the Department of Agricul- ture, the State Agricultural Experiment Stations and publishing time, who furnished so much informative an! useful data. TABIEOFCONTENTS CHAPTER I. INTRODUCTION..................... PurposeoftheStudy................ ImportanceoftheStudy.............. Definition .................... SourcesofData.................. II. HISTORYANDPRESENTSTATUS ............. History ...................... PresentStatus................... Commoditiespackaged............... Requirements for successful packaging . . . . . . Types of handlers engaged in centralized packaging Hethods of packaging - techniques, packages and procurement.................. Sellingmethods .................. III. WHYPREPACKAGING? .................. I PrepaclmgingmiminatesWastes........... PrepackagingAddstotheShelfIife ........ OtherAdvantagesofPrepaclcaging........... IV. PROBLEMS ...................... ProblemsRelatedtoContainers........... Containercosts ................. Containersizeandtype ............. Containervisibility............... contaj-mrdurabflity.00000000000000 PAGE marrwwwur—v F8 16 17 18 18 22 32 32 32 33 33 33 CHAPTER PAGE Master containers . . . . . . . . . . . . . . . . . . . 3h Reducing Labor Costs . . . . . . . . . . . . . . . . . . 35 Expanding Consumer Acceptance . . . . . . . . . . . . . . 36 InsuringHighQualityPack............... 37 Increasing Marketing and Transportation Efficiency . . . 38 Improving Prepackaging Equipment . . . . . . . . . . . . ho UtilizingRefuse.................... 1:2 V.PACKAGESANDFIIMS.................... ML Packages . . . . . . . . . .‘. . . . . . . . . . . . . . h5 Attributesofagoodpackage ............. 145 Basic containers used for prepackaged produce . . . . . 52 Reasons why different types of film are used . . . . . 5h Typesoffilmused.................. 56 VI.mammamourmmcnnom............. 67 Equipment . . . . . . . . . . . . . . . . . . . . . . . . 67 'Wrapping Equipment . . . . . . . . . . . . . . . . . . 67 Bag Filling, Scaling and Closing Equipment . . . . . . 7O ther'Equipment . . . . . . . . . . . . . . . . . . . . 71 Plant Layout . . . . . . . . . . . . . . . . . . . . . . 71 Technology 75 Refrigeration . . . . . . . . . . . . . . . . . . . . . 76 Precooling . . . . . . . . . . . . . . . . . . . . . 77 Refrigerationintransit.............. 80 CHAPTER Refrigerationinteminalmarkets........... GemicidflTmatmentofFreshProduce.......... FoodPlantSanitation ................. VII.C(BTSTUDIES....................... 'me Department of Agriculture and the American Stores Company ....................... CentralizedWarehousePackaging............ Costofmaterialsandlabor............. RetailAspects.................... Iossesthroughwasteandspoilage.......... Retaillaborcosts................. Relative profit, prepackam and bulk . . . . . . . . ThePuniueUniversityExperiment............ 'IhBPackagingProcess................. Laborcosts .................... Materialcosts................... Productlosses................... Prepecmging‘Cranberries COOperatively . . . . . . . . . Comparative Costs of Packaging in Cellophane and in Bulk Costofcellophane................. Costofcarriercases................ Costofquarter—barrelboxes ............ Costofpackaginglabor............... Equipmentdepreciation............... Prepaokaging cranberries in window cartons . . . . . iv PAGE 81 83 86 91 91 91 92 96 96 97 98 98 99 99 101 102 103 101; 105 105 105 106 107 ltl lull O . a I O o e . O c . a u I C I I o o c n o O I a . l o r l I D s C n O o a O n I I I I Q 0 e O I a . e . O o u v I - e e O . n e o n I O . b e . c Q 0 I a o o O I C a Q I I I e I 0 e O A O I e t O O I 8 0 . e . o a 0 t e . . V I U O O CHAPTER Prepackaging Apples at Point of Production . . . \ Costs Of Bagging Apples 0 o o e e e o e o o 0 Costs of Retailing Prepackaged and Bulk Apples Spoilagecosts............... Laborcosts ............. Materialcosts............ CostsofMarketing........... VIII. SMIARY AND CONCLUSIONS BI CHAPTERS . . . . Chapter II - History and Present Status . Chapter III - Why Prepackaging? . . . . . ChapterIV-Problems .......... ChapterV- Packages and Films . . . . . . Chapter VI - Equipment, layout and Technology Equipment‘...‘.'............. Plantlayout................ Technology................. ChapterVII-GOStStmies e o o e o e e e o o The Department of Agriculture and the American comparv......o........... The Purdue University Emperiment . . . . . . . Prepackaging Cranberries Cooperatively . . . . Prepackaging Apples at the Point of Production Conclusion .................. BREW O O O O O O O O O O O O O O O O O O I O 0 0 0 PAGE 108 108 109 110 EEEE 117 118 120 120 122 122 122 123 125 125 127 128 129 130 131 LIST OF TABLES TABLE 1. 2. 3. h. S. 6. 7. 9. 10. 12. Vegetable PrepackagingProspects . . . . . . . . . . . . . FruitPrepackagingProspects ............... Average Gross Weights, Tare Weights, and Weights of Contents Per Package of Sixteen Fresh Fruits and Vegetables in Stan- dard Shipping Containers Received in Wholesale Warehouse, Columbus, Ohio, November-Decanber, 19h6 . . . . . . . . . . Percent of Delivered Weight bf Seven Produce Items Remaining Saleable After Successive Days of Retail Display . . . . . . Prepackaging Chart for Fruits and Vegetables . . . . . . . . WProduceDecays ..................... Packaging Labor Costs Per Unit and as a Percent of Retail Price for Specified Items, American Stores Comparw, Keanw,NewJersey,l9h6 ................. The Percent of Labor Involved, The Packaging Costs and The Packaging Losses in Fruits and Vegetables . . . . . . . . . Cost of Packaging Fresh Cranberries by Type of Package, 19118-119 Comparison of Average Daily Sales and Direct Costs of Retailing Bulk and Prepaclmged Apples in Selected Stores in Chicago, Kansas City and Los Angeles, February-April, 1950 . . . . . Time Required by Labor Per Hundred Pounds of Apples Handled in Bulk and in Three and Four-Pomtd Bags in Selech Stores, Springof1950 ...................... Marketing Costs am Margins on Prepackaged ani Bulk Apples, at Retail Stores, Chicago and Los Angeles, 1950 . . . . . . . PAGE 23 78 9h 100 101; 113 CHAPTER I INTRODUCTION Purpose of the Study It is the purpose of this study; (1) to present a short history of the development of prepackaging, and then to discuss the industry as it stands today - the commodities packaged, requirements for successful packaging, types of handlers engaged in prepackaging, and methods of pro- curing, packaging and selling the merchandise; (2) to cite some facts showing why prepackaging is important in our present day economy; (3) to set forth some of the problems that are facing the prepackaging industry, and the important questions that need answering; (h) to indicate the types of packages and films being used for prepackaging produce, and the desir- able qualities of each; (5) to point out the types of equipment and lay- outs being used, with an outline approach to better handling and prepack- aging methods, some of the technological aspects involved, such as methods of refrigeration, germicidal treatment, and fbod plant sanitation; and (6) to summarize several of the cost studies that have been made so that one can get some idea of the relative costs involved in prepackaging and handling as contrasted with the conventional bulk methods of merchandising. Importance of the Study Prepackaging is not something that is dead and buried; it is very lunch alive and will be for some time to come. It is a subject that cone came all of us, because if we are not directly connected with the pre- jpackaging industry in some way, it is certain that we are all consumers and as such are interested in ways of improving our standard of living. By reducing or eliminating wastes, introducing short cuts and savings, and bringing the consumer fresh fruits and vegetables in.vine-ripened or tree-ripened stages maintained at the optimum degree of succulence and palatability, prepackaging does just that. The industry is growing fast. The expansion and growth of self-service, development of refrigerated display cases, high retail Operating costs and mass, highdvolume methods of merchandising have made the advent of pre- packaging a certainty. OnLy time is necessary before the shift to pre- packaging of other produce items becomes as apparent as it now is in California oranges, for example. The amount of fruit and vegetables prepackaged by the industry in 1950 totaled more than three and one-third billion pounds. It took 12 million pounds of flexible, transparent film, 50 million pounds of paper- board, 201 million mesh bags, and 17 million paper meshdwindow bags to do this tremendous prepackaging job.l While much has been written on the subject of prepackaging in the past several years, so far as is know, no one has incorporated the total content of this study into a single unit. In order to find out anything about the subject, it is necessary to look for the information in articles scattered throughout various publications. If the desired data are not found, the next step would probably be to write to someone who might be able to supply these data. 1 EarI:F§ench, Review Past and Examine Future of Prepackaging in~ Opening Session of Columbus Conference, Pre-PackaAge, April, 1951, p. 16. I.lillllllll' II [It g1 It is hoped that this work will present, to anyone interested, a relatively complete picture of the prepackaging industry as it stands today. It would be impossible, of course, to cover every detail in a work of this kind; but the attempt has been made to highlight the main considerations in a clear, concise manner. Definition "Prepackaging" has some descriptive weaknesses, but it is now accepted as identifying the process by which such products as fresh fruits, vege- tables and meats are prepared for self-service in the retail store. This process is two-fold; (1) it subjects the produce to whatever sorting, washing and trimming may be necessary to prepare it partly or completely for kitchen or table use, and (2) transforms it, either with or without precooling and refrigeration, into self-service items by packaging in prepriced, labeled, and closed containers - each holding a customary con- 1 smner unit. Sources of Data The data for this thesis were obtained primarily from periodical articles, with a very small part being derived from books. Also, a great deal of helpflrl information was procurred through correspondence with men who are well versed in the implications of this field. In addition, these men along with various manufacturing concerns, magazine publishers, the Department of Agriculture, the State Agricultural Experiment Stations and Agricultural Colleges supplied many pamphlets and bulletins which proved to be very important in this writing. l Writes W. Hauck, Prepackaging - A New Industry in the Making. Pre-Pack—Age. September, 1911?, p. 7. CHAPTER II HISTORY AND PRESENT STATUS History Prepackaging of fresh produce has gradually evolved into the prominent position that it now occupies. Many people think that the "Coltmbus, Ohio experiment" was the beginning of this industry, but there had been a great deal of grouniwork prior to that experiment. The operation in Columbus was a joint undertaking of the Great Atlantic and Pacific Tea Company and the Ohio State University Agricultural Experi- ment Station, starting in 19112 and continuing through 19147. The work that was done there attracted much attention and stimulated active interest in prepackaging to a greater degree than arything that had occurred in the past. It also provided some needed facts under actual retail conditions. However, some pioneering had been under way as far back as 20 or 25 years before 191:2, the year in which the Columbus project was begun. Some of this early experimentation was fundamental research conducted by experiment stations and other agencies, dealing with the nature of dif- ferent wrapping materials and their effect upon plant and animal tissues when sealed in these wrappers. For example, in 1928, Mr. H. D. Brown described a series of tests on the effects of various papers upon the quality of certain fruits and vegetables in Michigan Agricultural Experi- ment Station Technical Bulletin 87. Stahl and Vaughan published one of the earliest official accounts of experimental work in this field in Florida Experiment Station Bulletin 369 in l9h2, under the title, "Pliofilm 5 in the Preservation of Florida Fruits and Vegetables." Since that date the literature on prepackaging has become more prevalent. At the same time a number of commercial trials were being conducted here and there. Mushrooms in consumer-size paperboard boxes have been on the market since the late 1920's, and brussels sprouts since the mid-30's. Spinach ard tomatoes have been prepackaged since the late 1930's, and growing in pepularity ever since. Prepackaging of citrus fruits got its start in Florida about 1932, and at the present time there is large volume packaging of these fruits at both growing-shipping1 and terminal market levels. Also, paper and mesh consumer units of potatoes and dry onions have been on the market for some time. In 1932 Mr. J. D. Rankin, of du Pont's Cellophane Division, interested the Sanitary Grocery Comparw in Washington, D. 0. (now Safeway Stores) in an organized approach to produce prepackaging. At the same time the du Pont Company collaborated in some extensive trial packaging of various produce items in Florida, including sweet corn, which was shipped to outlets in Philadelphia, and lemons shipped to Minneapolis and St. Paul, Minnesota. Growers and shippers were not ready for prepackaging at the points of origin; so in 193).; Rankin brought his trials closer to the consumer by joining with Mr. Mike Freeman, who became president of the Freeman Produce Comparw, in New York City. They deve10ped a prepackaging operation to supply some retail chains. lettuce packing had to be discontinued because bidding on packageable quality in the New York produce market made prices Wg-shipping level refers to the shipping point. The grower- shipper grows as well as ships his own produce; while the grower himself usually has no facilities for crating and shipping, but generally contracts with the grower-shipper to find a market for his products. 6 prohibitive, but the Freeman Produce Company continued consumer packaging of brussels sprouts and is now one of the largest packagers of that product in the country. In 1933—31; Louis Marx, a cooperative grocer in Wolcott, New York packaged celery in a cellophane wrapper. This worked well, and was later used in Florida with success and then by Harry Becker, president of Harry Becker and Company, in Detroit in 1937. In 1935 First National Stores started to prepackage produce centrally in order to supply their Boston stores, and then extended the Operation to Hartford and‘White Plains, New York. Inasmuch as none of the stores had yet moved very far in the direction of self-service, they were not ready for it in the produce departments. About 1935, onions and potatoes in five, ten, and fifteen pound units came into prominence. Large quantities of Idaho potatoes were packed in that year, followed by the "Super Spuds" program in Maine in 1937, which further increased the use of consumer packages for potatoes. The pioneering of such organizations as Farmer Brown in Springfield, massachusetts, Sunny Sally in Los Angeles, the Crosset Brothers in Cincinnati, Art Romp, Cavalier, Culling and Wilson in Cleveland, Aunt Mid in Chicago, Lee Duvall in Baltimore and many others cannot be overlooked. They had to proceed by trial and error, but gradually learned how to do the job. They did much to get the public acquainted with prepackaging, as well as to build up acceptance for it. 'With the advent of the war in the early l9h0's, prepackaging slowed «down considerably because of the shortage of packaging materials. In spite of this, the Atlantic and Pacific Tea Company carried on its experi- 7 mental project in Columbus, Ohio; and the American Stores Company carried on a similar experiment in Kearny, New Jersey. Also, the citrus industry packaged a great deal of its fruit in mesh bags during the war. Interest and activity increased rapidly in the middle and late l9h0's. Central packing in receiving markets grew and reached large proportions. Tomato repacking, which had been done by hand, became a large scale Opera- tion in many cities with the introduction of automatic overwrapping equip- ment. Paul Dickman in Florida, Willard Farnsworth and Dennis Tops in Ohio, and other grower-shippers elsewhere came into prominence as suppliers of prepacked produce. Special packaging companies sprang up in may markets. Mamifacturers, in turn, developed better packing materials ani supplies, needed machinery and equipment. Retailers installed more and more refrig- erated self-service display and sales cases. In 19M, the Western Growers Association, with Mr. A. L. Martin as director of research, climamd experiments of several years on produce handling by shipping several carlot shipments of prepackaged vegetables from California to eastern markets. The Florida Vegetable Prepackaging Council also came into existence in 19M, and at the present tine has a continuing experimental program going in cooperation with the University of Florida and the United States Department of Agriculture. In l9h6, the passage of the Research and Marketing Act stimulated research in consumer packaging. Economic and technological studies have been made by several of the State Agricultural Experiment Stations and the United States Department of Agriculture, while others are now in process. In September, 191:7, a monthly periodical, Pre-Pack-Ag, was started to deal exclusively with prepackaging matters. 8 National meetings were held in 19h8 and 19h9 in conjunction with the National League of Wholesale Fresh Fruit and Vegetable Distributors, and in l9h9,'with the Packaging Institute. Prepackagers and related commercial interests, research workers, and others exchanged views and experiences ‘with the end result being the foundation of the Produce Prepackaging Association. This organization is now furnishing leadership and is the official spokesman for the industry. It can be said that the pioneering stage is just about over aflthe prepackaging industry is starting to grow. Of course, there is still much to be learned, but the essential groundwork has been laid and it is appar- ent that the story will continue to unfold for a long time to come.1 Present Status Commodities packaged. Nearly all fruits and vegetables have been sold in consumer packages, although usually on a small scale. It is still not possible to obtain all items in every part of the country. The most commonly available prepackaged item is tomatoes, of which about one billion consumer units are sold in the United States annually. Prepackagers supply this product to retailers in every major metropolitan area in the country. General line vegetables, such as spinach, kale, salad mix, soup mix, cole slaw, et cetera, are also usually available except in extremely hot weather during the summer months. Lettuce has been packaged on an experimental basis for some time, and 'with the recent development of automatic equipment it is expected that it 'will soon be prepackaged commercially in many large population centers. 1 Charles W. Hauck, History and Background. Pre-Pack-Age. AAugust, 1950, pp. 15-17- 9 Packaged celery is also becoming more and more popular. This has been a popular item in California and some parts of New England, but with increased production and distribution facilities, this vegetable product is now being supplied rather generally. Sweet corn in consumer units has definitely passed the experimental stage, and is being packaged in volume both in the growing areas and at local distribution points. Brussels sprouts is a long-time prepackaged favorite that has been generally available. Gradually coming out of the experimental packaging stage are such items as asparagus, broccoli ani cauliflower, arri they should soon be available in some volume. The important hard items being prepackaged are potatoes and onions. Principal packers are located in the growing areas, but many distribution point operations are also scattered throughout the country. Of the fruit items, those available in any quantity include apples, cranberries and citrus fruits. Cranberries are particularly abundant in prepackaged form, with about 75 percent of the fresh crop being distributed in this manner. Peaches, pears and plums have been packaged experimentally and in some volume, and indications are that they will soon be commercially available. Cherries have been shipped to large population centers in packaged form from California and Washington, and probably will .be available in substan- tial volume in the near future. Following is a list of fruit and vegetable items which are now avail- able in packaged form, or which have been successfully prepackaged experi- l mentally arri should soon be available: 1 Editors, United States Department of Agriculture, and the Produce Prepackaging Association. Items Prepackaged in Quantity. Pre-Pack—Age. August, 1950, p. 20. 10 Fruits Vegetables Apples Nectarines Artichokes Mushrooms Cherries Oranges Asparagus Onions and garlic Cranberries Peaches Broccoli Potatoes Grapes Pears Brussels sprouts Salad mix and slaw lemons Plums Carrots Spinach and kale Limes Cauliflower Sweet corn Celery Tomatoes lettuce Requirements f2; successful pagkaging. Tables 1 ani 2 summarize the relative importance of the principal vegetables and fruits as measured by production, the sources of production, trends in consumption and factors affecting their prospects for prepackaging. The general trend in per capita consumption of fresh vegetables is up, but a few items had a lower average consumption during the five-year period from 19M; through l9h8 than in the previous 20 years. Vegetables of which consumption has decreased are cantaloupe, potatoes, spinach, and sweet potatoes. The factors which are important in determining the relative possibili- ties for prepackaging the various vegetables and fruits, as shown in the tables, are: 1. Need for unitizing loose items; that is, for packaging or bagging small products such as onions, potatoes, peaches. 2. Possibilities for reduction of waste and spoilage. 3. Need for preparation or kitchen servicing by the prepacker. h. Relative costs of prepackaging and bulk packaging. S. 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The first factor, "Need for unitizing loose items," is important because these loose items have to be bagged sometime before they are taken home by the consmner; and the more economical place to prepackage them is at some concentration point rather than having thousands of retail clerks do the 30b in the retail stores. . The second factor, "Possibilities for reduction in waste and spoilage," is also very important. Practically all vegetables offer considerable promise for reduction in waste and spoilage losses as well as reduction of labor costs; items such as cabbage, cantaloups, eggplants, cucumbers and cauliflower are exceptions. It can be seen then, that these savings will help to defragr the costs of prepackaging; and they are necessary for the future of the industry. Prepackaging is not likely to expand rapidly if it is assumed that the housewife will pay a premium price for it. The third factor, "Need for preparation or kitchen servicing by the prepacker," is much more important in the case of vegetables than of fresh fruits. Lima beans, peas, sweet corn, brussels sprouts, spinach and kale are important items in this category. Also prepackaged peeled potatoes offer possibilities for a big market in the future. The fourth factor is "Relative costs of prepackaging arxi bulk packag- ing." The costs of prepackaging are high and are the chief deterrent to a more rapid extension of the prepackaging of fruits and vegetables. The last and one of the most important factors is, "The effect of pre- packaging on the preservation of quality. " The main advantage for most vegetables is preservation of moisture content, assuring crispness of 1h 1 such items as lettuce, celery, asparagus, spinach and other green leafy 1 vegetables. 1 According to the factors listed, the following vegetables have been I rated as having a "good" prepackaging potential: asparagus, snap beans, broccoli, sweet corn, kale, onions, potatoes, spinach and tomatoes. The items that are rated as "fair" are: lima beans and peas (mostly because of the lack of satisfactory shelling machinery and short package life), carrots, cauliflower, celery, lettuce, peppers and sweet potatoes. For items such as carrots and lettuce the outlook would be good except that costs are too high. The items that rate only "poor" in appraising the relative prepackaging potential on the basis of the factors named are: 1 artichokes, cabbage, cantaloups, cucumbers and eggplant. Types of handlers engaged _i_n_ centralized packaging. Prepackaging is being done by growers, receivers and retailers. The growers, of course, are located at the shipping point; while the receivers and retailers are situated in the terminal market. The receiver is the commission merchant at the terminal point who sells the fruit and vegetables to the retail outlet. Included under this category is the repacker who buys the mer- chandise from the commission merchant and processes it for sale in a con- sumer-type package. Shipping point prepackaging has proven more successful with the hard- ware items, such as potatoes, onions, citrus fruits, apples and cranberries 1 Donald R. Stokes. The Outlook for Prepackaged Produce. United States Department of Agriculture, Production and Marketing Administration, Washington. Address given at the First National Conference on Prepackaging of Fresh Fruits and Vegetables, New York. October 25, 19119, 3 pp. 15 than with the more perishable commodities; although celery, grapes, plums, rhubarb, peas, tomatoes and blueberries are being packaged there to a lesser degree. At the present time, however, it seems better to prepackage these items in the terminal markets in order to insure freshness and quality because of inadequacies in handling and transportation.1 Many wholesalers and repackers are grading, processing and prepackag- ing certain selected products which they'supply to their retail customers. Spinach, cole slaw, salad mixes, and tomatoes were the first items to be handled by these concerns; but other products such as lemons, lettuce,2 carrots, and so on, have been added to provide a.yearhround operation. These enterprises are diverse in scale and methods. One spinach- packaging enterprise might be Operated by'Wholesale produce dealer. Another might specialize in spinach and sell the trimmed and washed products in bulk to other packagers who pack and distribute in their own bags. One of the smallest packaging firms uses a.conwerted residential garage. One of the largest occupies a highly mechanized plant specifically designed for its use and has sold more than 26 million consumer packages of spinach.3 'Warehouse prepackaging by retailers has been proven to be successful in a number of instances and, with the improvements being made in equipment and materials, their operations will prove to be even more successful. By 1 Charles'w. Hauck. Prepackaging . .A New Industry in the making. 2 United States Department of Commerce. Results from Prepackaging Fresh Fruits and Vegetables. Office of Small Business. Small Business Aid No. 378,‘Washington, 19h7, p. l. 3 G. L. Mehren. Consumer Packaging of Fruits and Vegetables in California. Journal of Marketing. 12:330, l9h8. 16 doing their own prepackaging, they can insure the freshness and quality of the merchandise rather than depending on an outside source to furnish these essentials. Methods of packag’ng - techniques, packages _a_rli_ procurement. Most operations are extremely primitive from the engineering standpoint. How- ever, much headway is being made in the way of mechanical equipmnt and plant organization. Some spinach operations are highly mohanized, with ham! labor used only for trimming and for filling packages. The extent to which tomato Operations are mechanized varies widely among packagers. Lettuce and celery operations, while small in output, have been highly mechanized. With the exception of spinach, estimates of investment required for packaging a given commodity are meaningless because of the wide variance in plant organization and equipment. Three types of packages are most widely used. The different types of bags are used for a large number of both fruits and vegetables. The heavier types being utilized for such items as potatoes, onions and citrus fruits; while the more fragile ones are selected for commodities like spinach, cole slaw and cherries. Besides the use of bags, a method by which the product is contact-wrapped in a transparent film which is then heat-sealed, is being develOped. The third type of package consists of boxes and boats or trays. When the boats or trays are used, the product is placed inside and it is overwrapped with a transparent film, using machin- ery of the breadwrapping type. Supplies are procured by a variety of methods. For example, one large packager contracts in advance of the season with growers much as is done in crops for canning. In this way the firm is guaranteed a stable 17 buying price and can control both planting and harvesting dates. Other firms buy from local growers and from other packagers. Retailers and small packaging firms usually buy on the wholesale-market. Selling methods. The methods of sale, like those of procurement, vary with the scale of the firm, but all firms prefer to package in conformp ity with advance orders, mainly so that they can insure a stable selling price. The larger packers even pick up unsold merchandise that is in danger of deterioration to support this procedure. NOne of them sell on consignment as a regular policy. ‘Where the produce is packaged without advance orders, the pack is carefully held to estimated sales at the fixed price. Even those packers who purchase on fluctuating wholesale markets attempt to maintain a fixed price to retailers, and further try to persuade retailers to maintain fixed prices to consumers. A few of the spinach prepackagers employ salesmen who contact retail- ers and wholesalers, but no systematic efforts to manipulate demand at the consumer level have been made. The obvious applicability of brands to the prepackaged products has, however, brought about good opportunity for consumer-demand stimulation. Distribution in general has been limited to the trucking radius from the point of packaging; although some products are being flown in relatively small volume to markets up to 1,000 miles from the point of packaging. So far, special transit or holding facilities specifically designed to facili- 1 tate the marketing of prepackaged produce have not been developed. l Tbido, pp. 330-310 CHAPTER III ! WHY PREPACKAGING? The trend toward prepackaging of foods in consumer units has long been apparent. The purchasing of foods in bulk by consumers has been discouraged by the combination of modern living customs and shopping habits and limited facilities for food storage in urban dwellings and apartments. Producers and distributors have been quick to realize this, and seek to relieve housewives of as much time-consuming work in food preparation as possible and to simplify their problem of waste disposal by offering an ever-increasing variety of foods partially or completely processed or otherwise prepared. The change is also inspired by the seller's desire to offer products identifiable by label and brand name.1 Retail food stores are being converted more and more to self-service, and this means self-service not only in the dry grocery departments, but in the perishable departments of meat and produce as well. And self- service goes hand-in-hand with packaging. So prepackaging, in part, is the result of changes occurring in our economy; but there are other reasons for the trend toward prepackaging. One of the most important ones is that of waste. Prepackaging Eliminates Waste The amount of waste that accompanies conventional practices in the handling and distribution of perishable foods is almost unbelievable. ITICharles'W. Hauck. Housewives Prefer Pre-Packaged Produce. Columbus Experiment, Consumer Survey, Columbus, Ohio, mimeographed publication, p. l 19 Mary authorities estimate that about one—fourth of the food produced never is converted into human nourishment but is discarded or wasted somewhere along the line. Robert T. Oliver, of Syracuse University and the War Food Administra- tion had this to say: What agricultural economists have tended to call 'normal wastage' is draining away from 20 to 30 percent of all the food our farmers produce. One pound of food in every four that is grown is destined for the garbage dump! Two hours in every eight worked by our farmers, food processors and food distributors is time thrown away. Trrerrty- five acres of every hundred-acre farm are plowed, planted, culti ated and harvested with the produce to be finally discarded as waste. Some of these wastes occur on farms, some in packing houses, some in processing, some in transportation and storage, some in wholesale warehouses, some in retail stores, and some in the homes of consumers and in public eating establishments. The losses on perishable items exceed those on staple merchandise, so it is reasonable to suspect that wastes on unpro- cessed goods such as fresh fruits and vegetables may be even higher than one-fourth. Rough percentages estimated by William Kling of the War Food Administration add up to these figures: Deciduous fruits, 26 percent; potatoes, 28 percent; tomatoes and citrus fruits, 33 percent; leafy, green, and yellow vegetables, h3 percent. According to his estimates, wastage of fruits and vegetables after leaving the farms amounts to about 20 percent, 2 or more than $800,000,000 annually, at 19h2 retail values. l Anon. Normal Food Wastage - A Socio—Economic Problem. American Scientist. 32, No. b; 268, 192m. 2 Anon. Food Waste in Distribution and Use. Journal of Farm Economics. 25, No. h3858, 1910. 20 Mr. Kling states that if these estimates are reliable they iniicate that more food is wasted than was consumed annually by the United States armed forces and lend-lease shipments combined during World War II. Mr. Oliver emphasizes the fact that this is enough food "to feed a population of 30 million people - a number equal to the aggregate population of hunger- ridden-Belgium, Greece, Denmark, Norway and Czechoslovakia," or, bringing it closer to home it may be added, to feed the combined population of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, _.New York, New Jersey, Delaware, Maryland and West Virginia.1 These figures are especially provocative in view of the inmense scarcity of food throughout the world. It is no wonder that they call for a re-examination of existing practices at all points to determine which of them needlessly contribute to waste, and how they may be effectively modi- fied and improved. The object of prepackaging is to help eliminate these wastes. Pre- packaging, through careful preparation and refrigerated delivery of the product to the consumer, makes possible a better utilization of the country's food production. It has been proven by researchers time and time again that . packaging and refrigeration saves food and preserves quality without excep- tion in the case of every fresh food product.2 Ralph David, former editor of Pre-Pack-AE, in an address titled, "Industry's Responsibility in a Defense Program," said that during 1950, over three billion pounds of fresh 1 Charles W. Hauck and W. L. Lenox. "Normal" Food Waste - Is It Irreducible? Ohio Agricultural Experiment Station, Bimonthly Bulletin 2143. 191:6, p. 179. 2 Anon. What is the Place of Produce Prepackaging in an Industrial Mobilization Program? Pre-Pack-Agg. September, 1950, p. 9. 21 fruits and vegetables were prepackaged, resulting in a savings for the country of 167,000,000 pounds of food which otherwise would have been 'wasted. The result was a saving of 17,000,000 manphours of labor and 7,100 cars, or their equivalent, which would have been required for the transportation of fresh produce items. Mr. David states that the savings are there purely because the prepackaging of fresh fruits and vegetables prior to their arrival at the retail store results in more efficient use of labor and the elimination of a great volume of food waste.1 Hewever, prepackaging is not a cure-all for produce merchandising difficulties, but it is a step in the right direction. For example, the necessary trimming, sorting and reconditioning of bulk produce in the retail stores has been found to result in.wastes as high as 36.1 pounds of each one hundred pounds of bunched beets received, 32.3 pounds of cauliflower, 20.h pounds of head lettuce and 1h.8 pounds of broccoli. These amounts had to be thrown out by the retailer, and his returns from salable portions had to be large enough to cover his costs and losses on the garbage as well as the salable merchandise. Prepackaged, refrigerated produce, on the other hand,rarely shows losses that are more than 2.5 perb cent at retail.2 Furthermore, when unsalable produce and trimmings are segregated in a central location they can be utilized rather than merely being tossed in the garbage can in the retail stores. The edible portions l Anon. Responsibilities and Manpower in Today's Economy. Pre-Packh Age, April, 1951, p. 28. 2 Charles W. Hauck. New Opportunities in Packaged Perishable Foods. The Ohio State University and the Ohio Agricultural Experiment Station, Columbus, Ohio. Address prepared for delivery at the 17th Packaging Conference and Exposition of the American Management Association, Cleveland, Ohio. April 27, 19h8, p. 2. 22 can be used in soup or salad mixes because, for the most part, they are just as palatable as salable products; while the inedible parts can be used for fertilizers, feeds or mulch. Opportunities for increasing the "pay load" may be illustrated by head lettuce. This item.is available practically the year around. It comes to market from western sources packed in crates which hold five dozen heads on the average. Snow ice is placed between the layers of heads, and the total weight per crate amounts to about ninety pounds. The store in wrich the observations were made received 38 crates of head lettuce during a two-week period, with. the gross shipping weight totaling 3,391. pounds. Of this amount, tare (crate, liner and ice) equalled 797 pounds or 23.5 percent and loss from trimming and damage in displaying and recon- ditioning the lettuce was 531 pounds or 15.6 percent. The balance of 2,066 pounds or 60.9 percent was salable lettuce.1 Table 3 shows the results of another survey of sixteen commodities including lettuce. As this unnecessary weight or bulk is reduced, handling costs decline. Freight and hauling expenses are reduced. Self-service allows retail produce departments to be operated with less labor than before.. When the prepackaging is done at the shipping point rather than after arrival in the terminal market, even greater economies are possible. \ Prepackaging Adds to the Shelf Life Perhaps the principal origin of savings lies in the extension of the shelf life of the produce; retention of peak quality and appearance of 1 :Charles W. Hauck. Pre-packaging Reduces Food waste. Mimeographed publication, p. 6. 23 mean use such scum vodhaom .moHowpomob 1:. .o .52 ..SN .oz .mm .533 mavens moo mvnwmos ones .Honmg .A .3 one xooom .3 .0 H cod mp enema m we no: ash e .e 4&5 j; «b.0< 00.oo 00.N©H Hakeem upoaaenw 332 8A owdm ..twm 5m emote .Eoeeoe mm.qa oo.m mb.0.“ Nw.wH poxmem menses unease 00.0H 00.H mw.bH poxmom owmnnwo muodoo NN.¢H 00.0H mm.0b cameo hhoaoo mm.