I love technology. I had an Apple II as a kid, did engineering projects in high school, and have worked in and out of the tech sector for years. But as cool as the technology is, it is the impact on a business, and organization, a society that matters. This is a lesson many engineers forget, focusing on the solution rather than the problem, but it is the reason any of these advances have value.
So here is an everyday technology that really is a high-value: vacuum packs.
For decades, there was only one way to buy tuna: canned. Parents and kids knew to pull that can of StarKist or Bumblebee Tuna out of the pantry, grab the can opener from the drawer, and open it up. Cans are great: they don’t spill; they last pretty much forever; they are nearly impossible to break.
Along comes the vacuum pack. For the last few years, you can buy tuna in a vacuum-sealed bag. It looks and feels like extra-thick aluminum without the rough edges. It is rectangular in shape and nearly flat, with a slight V-shaped indentation near the top on each side, so you can literally rip it open like a paper bag.
Vacuum packed tuna is far more convenient. It can be opened without tools, making it ideal for lunches at school or in the office; it is lighter, making it easier to take on camping and day trips; it has no sharp edges once open, avoiding the often painful finger cuts.
Classic marketing teaches that when you sell something that has a higher value to your customer, it doesn’t matter what your cost is; sell it for more. A quick check on Amazon shows the following (I tried to pick packages with nearly the same net weight of tuna, to account for bulk pricing differences):
- 3-pack of 12-oz canned solid white tuna for $24.42, $0.68 / oz
- 43-oz vacuum package of solid white tuna for $25.25, $0.58 / oz
Apparently, the vacuum pack is not materially different in price than the cans. This could be a conscious choice by StarKist to promote sales of the vacuum packs, or it could be a sign of a more staid marketing department.
However, even at the same price, the vacuum packs are a big profit win… for StarKist.
StarKist’s profit is nothing more than its revenue minus its expenses. Let’s assume that the costs of acquiring and processing the tuna, as well as marketing, are identical for the same 6-oz of tuna, whether it ends up in a vacuum pack or a can. I have no insight into the packaging costs, but the sheer difference in weight between the 2 implies there is a lot less material going into the vacuum pack than the can. That leaves shipping and storage, which is where the difference is. Let’s compare the 2. I took them both from my own closet, weighed them on the same scale and measured them with the same tape measure:
- 160-gr / 5.6-oz can of tuna. Gross weight 196-gr; radius of 4.25-cm, height of 3.6-cm
- 181-gr / 6.4-oz vacuum packet of tuna. Gross weight of 183-gr; length of 14-cm, height of 18cm, width at thickest central point of 1-cm.
Remember that companies pay for shipping both by weight and by volume, whether it is the trucks/boats/airplanes, or whether it is the labour.
- Weight: Although the additional weight varies by size of package, the close examples above show that 18.4% of the shipped weight of a can is lost, while barely 1% of the shipped weight of a vacuum pack is lost. This is a huge benefit for StarKist.
- Volume: To properly calculate the volume, we need to remember that a can cannot simply be stored; it has to be packed with other round cans, creating lot of dead weight. If you have ever bought a 4-pack of tuna (or any other canned good), you have seen how they are packed together. Similarly, a vacuum pack of tuna may be thick only around the centre, but it has to be packed with all of them. Thus the shipping volume requirement of the 5.6-oz can above are 260.1 cubic cm, or 46.45 cubic cm per oz of net product, while the shipping requirements of the 6.4-oz vacuum packet are 252 cubic cm, or 39.38 cubic cm per oz of net product.
The vacuum-packed tuna requires 94.6% less shipping weight and 15% less shipping volume per oz of net product!
Vacuum-packed groceries is not something that will show up on VC radars, or make TechCrunch. Yet, in its own way, it has had a vastly larger impact than the latest “social-mobile-local” funded out of Silicon Valley, NYC or Tel Aviv, and will continue to do so, making life better for consumers and profits higher for StarKist.