Just the Answer - John Revess
On-shelf impact, durability and environmental concerns are just some of the vital areas for drinks companies that make the choice of packaging supplier a key decision. In this month's Just the Answer interview, John Revess, marketing director for Rexam's European can division discusses the packaging company's drinks industry business.
J-D: What is Rexam, and in which drinks-related fields does it operate?
Revess: Rexam is focused on being a world-class player, involved in whatever packaging materials our customers require. For us, this is a balance between cans, and plastic and glass containers. My responsibilities are within the cans business, which is the largest sector within Rexam. Although, in the US, Rexam's focus is very much on soft drinks, in Europe and Asia we have a balanced portfolio of beverage segments, covering energy drinks, nutritional drinks, water and beer.
J-D: Who are your biggest customers?
Revess: We're very proud to have Coca-Cola as our number one customer. On top of that, our second biggest customer is Heineken. I think, certainly within Western Europe, that gives us a very balanced base. Both of their drinks segments in Western Europe are relatively stable with mature growth rates of between 2% and 6%. The dynamic within the drinks industry that interests us all is the creation of some segments that are growing much faster. Energy drinks, in particular Red Bull - also one of our customers - are a typical example, with growth rates of about 15% a year.
J-D: How close is the link between the performance of drinks companies with Rexam's performance?
Revess: Extremely, to the extent that our product portfolio provides a relatively stable segment of their business. For Coca-Cola, for example, they will expect a certain percentage of their business to be sold in cans, so we'll expect our share of their overall performance. If they have a difficult year their demand for cans decreases. Our role, as the largest can supplier in Europe with 45% market share, is to ensure that we balance our portfolio as much as possible with a mix of large, stable customers as well as fast-growing customers so we can achieve growth rates. We have been a big investor in Russia, through beer customers including Baltika, which has provided fantastic growth for us.
J-D: Where else do you see growth coming from in the future?
Revess: Regarding the can business, Rexam is looking to geographical expansion. We need to go further east than Europe, so Russia, the Middle East, China, India and northern Africa is where we're actively involved in ensuring our partners have a supply of cans to meet their own customers' needs. Secondly, we need to continue to support our major customers who have managed to find the right consumer product. Red Bull is a great example of that. Thirdly, new and emerging categories of drinks will be important. Within western Europe, I feel there will be greater focus on concept innovation and new products. My job is to champion the can as the ideal packaging for these new products.
J-D: How does environmental legislation regarding packaging affect Rexam?
Revess: We have absolute confidence in the long-term future of the can as a strong packaging solution for the future. Its environmental profile is as good, if not better than other packaging formats. Cans offer an absolutely renewable packaging material. They have inherent scrap value unlike any other packaging material, therefore recycling rates are high. In the Nordic countries and Brazil, for example, the recycling rate for cans is between 85% and 90%. The can beats other materials on an environmental platform, not only through the raw materials used but also its transport efficiencies. I think sensible legislation is actually to the benefit of the whole industry.
J-D: What sort of product innovations do you foresee?
Revess: I don't believe that packaging will change or help grow consumption. In the mature western markets, what we need are successful product concepts to stimulate consumption. Beer and colas are categories that are struggling to grow. Water, flavoured water, energy drinks and nutritional drinks are continuing to show strong growth. The future for Rexam, I think, is to demonstrate and work with customers as they create those concepts to show we can provide the perfect package for those drinks.
Regarding innovation, our colleagues in the US have just launched the cap-can - a resealable drinks can with a twist-off cap. We are also working on areas where consumers are looking for improvements in packaging. Where their lips are in contact with the can could be protected from its environment. We're also looking at improving the quality of the graphics on a can. I think the future offers great opportunities to go back to the creative process to come up with much more exciting, high definition graphics.
J-D: Which drinks companies impress you and what do you think will be the next big thing?
Revess: The businesses I would give my right arm for are the ones that are being created today from nothing, based on strong, innovative product concepts. I don't think anyone 10 years ago would have thought Red Bull would have been as successful as it has been. What we want to identify is who are the future Red Bulls. I don't necessarily believe that they're coming out of the current major drinks manufacturers. If they do that's great then we are working with them. We need to understand for ourselves which parts of the market are going to be in growth and identify customers that have latched on to those growing categories.
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