Merchant Innovation

Reynolds CEO: Recreating Grocery’s Home Goods Aisle For The Millennial

Aluminum foil is not a new product by any stretch of the imagination. Its precursor — tin foil — was used for cooking, starting in the early 1800s. In 1910, the world of foil enjoyed its most important historical innovation: The Swiss figured out how to make it out of aluminum instead of tin. However, it wasn’t until the post-WWII era that aluminum foil began to shine. In 1947, Reynolds Group Holdings began mass manufacturing it for home use.

There was a baby boom underway, and Richard S. Reynolds (the founder of Reynolds Group Holdings) believed that aluminum foil for home cooking was on the verge of being a big business.

As it turns out, he was right. So much so that Reynolds quickly grew beyond being an aluminum foil company, expanding into an entire universe of home products: cling wrap, parchment paper, plastic containers, etc. Odds are incredibly good that no matter who one is or where they live, there is at least one Reynolds product in their pantry right now.

How good are those odds? Well, as Reynolds Consumer Products President and CEO Lance Mitchell told Karen Webster in a recent conversation, according to the company’s internal data, about 90 percent of Americans have at least one Reynolds product in their homes, and 75 percent have at least three. It is difficult to ask for market penetration much better than 90 percent.

However, he noted, that doesn’t mean Reynolds can kick back, rest and feel confident that it has gotten this market locked down. That’s because the market is always moving, and the consumer is always changing.

“The reason Reynolds has survived for generations is our formulation, [which] has that strength and malleability that is unique to us,” said Mitchell.“No one has cracked that. We see consumers try our product, and we see repetition back to the brand in the vast majority of cases. But they need to pick up the product to reap back to it, and we think a lot about that first pickup.”

Bracing For The Shift

About five years ago, Reynolds formed a specialty eCommerce group to prepare for the shifting patterns of consumer consumption. Though grocery was a slow category to transition in general (because ordering fresh food sight unseen is something of a non-starter for many consumers), household goods like the type in which Reynolds specializes seemed like a natural target.

Since then, that changeover has been more moderate than initially predicted, and the home goods aisle in grocery stores remains the company’s primary and most robust sales channel. Yet, the growth is undeniably there and happening, as Reynolds has seen the eCommerce figures increase by double digits.

This means that Reynolds has had to think more expansively about how to promote its products — and where. The advertising is much different, and the campaigns are specific to the channel. On Facebook, for example, Reynolds does a weekly campaign to show off unusual and creative uses for its products (did you know Reynolds aluminum foil can be used to clean the grill?). The company also used Instagram to launch the “endless table” campaign, centered around all the foods one can cook with Reynolds wrap.

In the store itself, he noted, it means working side by side with the retail partners to make sure it is always growing spend in terms of total home goods category dollars — the category team is always working to first make sure the retailer has the right mix of products to make that growth happen. It also means making sure the customer knows about it, and is primed to take advantage of the offerings.

Therefore, the company must always be innovating its offerings, despite the fact that Reynolds wrap has been a successful product for 73 years. Webster noted that her personal favorite innovation was the non-curling parchment paper, while Mitchell added that non-stick aluminum and slow cooker liners have been especially popular in recent years.

The driving consideration is convenience (a slow cooker liner means clean-up is an eight-second process instead of 15 minutes), which is particularly important as Reynolds is actively working to court the millennial market.

Moving On Millennials 

All customers want convenience, of course. However, the focus among millennials is particularly strong.

“What we’ve heard from millennials, and what we’ve seen in the data, is we can drive the occasion for use via at-home cooking with ease. The message we get is ‘make it easy, and I’ll do it,’” said Mitchell.

This is why Reynolds has focused so keenly on recipe integration in recent years — among the trends it has seen, millennials are extremely good recipe followers. If the recipe calls for parchment paper or aluminum foil, millennials treat it like an ingredient in the recipe. Make it easy to cook, make it easy to know what to use and make the recipe simple, and it creates the perfect context for purchase.

That is, at base, what Reynolds has always done: provide the purchase that speaks to the consumer’s needs at the right moment of decision. Where that choice happens is changing, he noted, and it’s going to change. How those purchases happen is also evolving. Today, 20 percent of Reynolds consumers are purchasing its products via subscriptions — and that number is ticking up, mostly among millennials looking for means to consolidate their shopping experiences.

While Reynolds wants every customer, the emerging highly digital millennial consumer is its target.

“Families use our products exponentially more than anyone else, and millennials are forming families. So, it is crucial to us that we position them as one of our main target demographics,” Mitchell said.

The world is changing, and even though Reynolds has been around for a long time, the company is committed to changing along with it. No matter how consumers shop over the next 75 years, Mitchell noted confidence that Reynolds will still be needed.

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