New grape packing to save Asda’s IPL £880k

Asda’s supply arm, International Produce Limited, is set to slash its grape processing costs by £880,000 a year thanks to a new packing line.

IPL, a wholly-owned subsidiary of Asda, already supplies all the retailer’s grapes, which are packed at its Normanton site. The new packing technology has been in development for 18 months and was partially designed by workers.

A conveyor belt will transport the grapes along the production line, increasing efficiency, lowering costs and saving workers from having to collect the fruit.

The line will also provide real-time average weight control to ensure correct pack weights. “It will be the best grape-packing facility in the UK,” said Daniel Angadi, IPL plant operation manager.

Once it becomes operational in January, IPL estimates the technology will deliver savings of £20,000 a week. Since IPL packs at source for two months of the year when this is more economical, this equates to approximately £880,000 per annum. The savings will enable Asda to further its EDLP strategy and continue to meet the Asda Price Guarantee of being 10% cheaper than rivals.

The cost saving on the new grape line will add to the significant cost reductions already achieved at IPL. Last year, IPL spent £250,000 on a new plum packing line – saving the company £1 per case when compared to the cost of packing in South Africa. This meant IPL had recouped its investment within five months of the line becoming operational, said Angadi.

In February, the supplier invested an additional £2.5m in a salad-packing line to run Asda’s newlytransferred salad-packing operation.

According to IPL estimates, the line will pay for itself within 12 months of installation.

IPL has also begun producing Smart Price muesli and porridge for Asda – a new function for the company, which previously only packed, sliced and bottled individual food and drink bought in bulk