Mr. Maetz, which strategy does Danone generally pursue with its brands of natural mineral water?
The tax on sugar in more and more countries, a rise in obesity and increasing health awareness are resulting in a downward trend in carbonated soft drinks worldwide and further disproportionate growth on the market for mineral water. In view of our range of products which are good for your health, this is a welcome development for Danone Waters. In order to also serve target groups in this context who to date have taken little pleasure in pure water, we’re now marketing a number of aquadrinks – that is, natural mineral water, near-water beverages, and flavored mineral water with a lower sugar content than many other sugared beverages.
Worldwide urbanization is enticing more and more people into the cities, especially in Indonesia, China. and Latin America, where they hope to experience a growing prosperity. Here, there’s a rise in the need for safe bottled water which no longer has to be boiled before it can be drunk. At the same time there’s also a demand for quality. This is why we’ve added the premium Prestige bottle to our range which is being very well received in the big cities and particularly in the hospitality trade. Finally, we’re exploiting further potential for growth by adapting to suit people’s increasing mobility. Here, we’re not only using our traditional channels of distribution but also increasingly the impulse buying channel through gas stations and kiosks where we’ve had a low presence to date. We’re also developing new products which are easy to consume when you’re out and about.
Which opportunities for innovation are there in conjunction with natural mineral water?
Take Evian, for example, our flagship, which stands for innovation in a big way. In 1962 we were the first to launch a facial spray, initially for people with burns and then for cosmetic use. In 1995 we were the first to make bottles from PET instead of PVC and a little later were the first to have compressible bottles. In 2013 we introduced a brand-new, extremely practical container for 200 ml of natural mineral water: the Evian Drop. The same year we found a way of considerably strengthening Evian’s premium claim by launching the new range of Prestige bottles. At the moment, thanks to our cooperation with KHS and NMP Systems we’re celebrating another world premiere: our no-film pack which needs no shrink film whatsoever as the bottles are held together by dots of adhesive.
Is innovation restricted to the products in your range?
Many of our activities center on the quality of our products which must not only be guaranteed from the source to the consumer but starts with the protection of the areas the water is sourced in. Environmental aspects have thus long played a major role for us. And not just in this respect; we’ve spent a lot of time and energy on using not only recyclable PET but also a considerably high percentage of recycled PET in our bottles and at the moment we’re investigating various vegetable-based bio plastics. It’s also about how we work in our bottling plants. We invest in reducing our energy and water consumption and try to transport our products to the consumer in a way which is as eco friendly as possible.
“We’re bold and take risks, for without risks innovation can’t be successful.”
How does this work with a product which is shipped from a single location to places all over the world?
Considering that we transport 7,000 pallets per day and 1.7 billion bottles per year from Évian to 140 different countries, the logistics is indeed a very challenging task for us. We strongly believe in using multimodal transport and are investing in maximizing the amount of rail transport used in our logistics. At our plant in Évian we already have the largest private railroad station in France. The next step is to optimize the distribution of rail and road in the last few kilometers to our customers. When shipping overseas we work with subcontractors who want to reduce their carbon footprint – by using new ships or throttling their speed, for example, in order to cut down on fuel consumption.
What influence does the special status of Evian water have on innovation?
Evian is possibly not our best-selling brand but by far the most famous – from South America through Zimbabwe to the whole of Asia. Wherever you drink Evian in the world, it’s exclusively bottled here on the shores of Lake Geneva. As far as innovation is concerned, this is both a strength and a challenge. Our strength is that we’re an attractive partner for companies who can launch their new developments to the worldwide market very much faster with us than with locally organized companies such as Pepsi and Coca-Cola, for example. If we want to start something new ourselves, we have to siphon off capacities from our extremely stretched lines here in Évian. That’s the challenge.
The marketing perspective
Bérengère Dupui, Evian global innovation manager at Danone
The first touchpoint between our product and the consumer is the packaging. A premium brand especially has to therefore give the consumer a premium experience with regard to design, ergonomics, and application of the packaging. We’re permanently working on these dimensions. The Prestige range thus strengthens the foundations of our brand, namely innovation, purity, and design. With its straight, smooth shapes it appears simple and purist. This accentuates the aspect of transparency and reminds us of the unique origins of Evian in the heart of the French Alps. Prestige is our answer to the consumer’s desire for a perfectly designed bottle.
Unfortunately, to date this beautiful bottle has been hidden by shrink film. This is difficult for consumers to open and doesn’t look good in the kitchen once it’s been opened as it’s a source of waste. With Nature MultiPackTM we can now get rid of the film wrapping completely.
We offer greater user friendliness and at the same time emphasize the design of our bottles as a symbol of the purity of our natural mineral water – the perfect combination of a new technology, consumer insights, and brand positioning. Both the consumer and the retail trade are extremely enthusiastic and in France we’ve just won the important Grand Prix Stratégies du Design in the packaging category.
Even if we’re very proud of this, we also want to continue to improve the customer experience, build on the premium character of our products and reinvent the water category. The future of our bottles and packaging is innovative, distinctive, practical, customer oriented, and environmentally friendly.
How did you come to be working with KHS and NMP Systems and what experiences have you had during this time?
Our cooperation initially started during our visit to drinktec 2013 in Munich, Germany, when my colleague Germain Rivaux and I first saw the no-film pack at KHS. We were immediately excited, recognizing its potential, and we were able to push the project through at Danone. The special quality of our partnership with KHS and NMP Systems lies in the joint ability to bring together the right experts from all fields – right from the very start.
How do you manage your teamwork and make it work?
In the last few years we’ve managed to overcome our silo mentality and form interfunctional teams. We’re not only interested in the figures in our own units but also in the profits and losses of the entire company. We want the global picture and part of our culture at Danone is to involve everyone. In practice we operate like innovative startups with incubators which take on different functions without anyone seizing overall control. We don’t stick to any strict rules. Despite this, the team functions as it has plenty of free scope for intuition and ideas. We’re bold and take risks; without risks, innovation can’t be successful. The trick is that you have to define a process in order to identify and efficiently deal with potential hazards. And during implementation – for example with regard to quality and food safety – we make no compromises. This sometimes conflicts with the speed with which we’d like to see our innovation on the shelves. But if Steve Jobs had waited until his first iPhone was perfect, who knows when it would have hit the market?
How do you go about finding your innovative partners?
We’re very quick to make decisions and can mobilize resources fast in order to promote innovation. We thus expect to have access to developments which fit in with our strategy, our process optimization or the demands of our customers. This by no means simply involves the traditional supply of capacity and performance but calls for us to work together beyond the conventional parameters when providing and jointly developing innovations.
How does this work in practice?
For us, what counts most is keeping ahead of the competition. Of course we’re also aware of the fact that our partners want to sell as many machines as possible and we don’t want to stop them from also being available to our competitors. This results in a certain amount of conflict but with KHS and NMP Systems we’ve reached a good compromise with the no-film pack. KHS and NMP Systems have promised us a limited exclusivity on the market – in our view a just reward for the two years we’ve invested in development here.
What expectations do you have regarding service?
As every supplier claims to provide the best technology, you could almost think it makes no big difference who you buy your machinery from. However, as we don’t buy our equipment for just a few months but for 20 or 30 years, relations between the partners are crucial. It’s not enough to only show up when a new investment is on the cards. We expect permanent support in order to constantly optimize the efficiency of our existing plant engineering. This is done by maintaining very close links to all of your contacts, not just at the headquarters but everywhere locally. This has a lot to do with people – and with proximity.
- 1965 bottling plant built
- 100,000 m2 of hall space
- 15 lines, 11 of which are PET lines
- 13 km of their own railroad
- 7,000 pallets per day
- 1.7 billion bottles per year
What expectations do you have of your cooperation with KHS?
Packaging is a composite part of our product and our brand experience. We pool all of our expertise in new developments – from the technical design through market research – and support KHS during the finalization of its developments. This works both ways. It gives us access to innovations and opens the door to further business success for KHS. For instance, parallel to our good cooperation on the no-film pack we’ve strengthened our partnership in relation to classic systems as well and purchased various shrink packers and a canning line from KHS over the last two years.
What perspectives do you see in your partnership with KHS?
I wish that KHS continue to be an innovative company, to whose ideas and the joint implementation of which we will also be very receptive in the future.