Innovative brand extensions

There are loads of textbook examples describing successful brand extensions. I would say that the Virgin enterprises of today will serve as a good example of a successful branching out from the original Virgin branded vinyl recordings. Coca-Cola famously extended the brand to include also Diet Coke in 1982 and IKEA is also the number one Swedish exporter of food products.Peddy2

Artist and designer Peddy Mergui takes the concept of brand extension further than this and to a new level. In an amazing, challenging and also made up series of cleverly designed packaging solutions for famous brands. Famous brands that today are active far away from the here suggested categories.Peddy1

In a design museum in San Francisco the entire line of exciting and thought provoking packaging was displayed. Peddy gives us his view of what milk from Apple would look like, or a salami from Louis Vuitton and how yogurt from Tiffany could be packed. If you ever wondered what pickles by Gucci would look like, go to the exhibition web site.

A brand is expressed through its packaging and this artist will support us thinking out of the box and straight into the container.

The bigger the better…?

We are getting bigger, no doubt. This obesity pandemic is putting pressure on health care systems throughout the world. There is obviously a cost related to this, both an individual personal one and an actual monetary.

The medical costs are easier to distinguish and calculate. According to McKinsey the United Kingdom spent more than £4 billion on obesity-related medical costs in 2007. The United States currently spends about $160 billion which is twice what it did a decade ago.

Now these numbers only represent a fraction of the pandemic’s total economic burden on societies. The graph below specifies the different actual costs to society and the individual and shows the final cost which is a stunning $450 billion annually in the US.

Packaging can support diets simply by sizing up portions of adequate size. It can of course also carry messages to encourage the person who needs a push to limit intake and get away from some weight.

Then I see the new cup size to be launched by Starbucks. This can’t be meant to support a healthy diet. Even if you fill it with something as neutral as tap water it is simply too much for the human to stomach.

I assume it’s meant for sharing…


O-I keeps expanding

Glass might not be the most thrilling packaging material for everyone but it has been around for many thousand years. And will probably be around for yet another while as it does hold some indisputable qualities. It is inert and airproof from a functional point of view. The marketing side will find creative use for its ability to convey quality and tradition.

Owens Illinois reportedly acquired the Brazilian glassmaker Companhia Industrial de Vidros (CIV). The move strengthens their position in South America significantly. CIV is located in the fast growing north east of Brazil. The country as such is seeing growth of most consumables among them beer and CSD. The dominating package type is still refillable glass bottles.

O-I is in an expanding phase with recent M&A activity in Argentina and Peru. The focus still seems to be on Asia with acquisitions in China both this and last year and also in Malaysia and Vietnam and New Zealand.  A few plant closures in the more mature markets in Europe doesn’t bring down the impression of an expanding O-I.


Graham Packaging is to acquire Liquid Packaging. Seems to be a great fit and a bolt on for Graham. Liquid Container operates 14 blow-molded plastic container plants in the US, serving food and household product categories. In the same area Graham Packaging runs 56 plants. LC will bring in some technology know-how and some new customers, all good.

Consumer packaging is still a highly fragmented industry where the 10 largest producers only represent less than 15% of the market. This is in the process of change.

Can now do digital printing

Ball Packaging is now offering digital printing on beverage cans.

This means higher quality printing with more details but perhaps the main benefit is the improved speed from idea to a printed can. An image can go straight from a computer to the production line without making up a printing plate.

Another benefit is that this technology opens up for shorter runs. You don’t really have to order a billion cans as a minimum.

On the Ball

Ball Packaging has acquired Neuman Aluminum, a producer of aluminium slugs used to make extruded aerosol cans, beverage bottles, tubes etc. This is a strategic move to get access to critical technology. In the existing beverage can oligopoly it is crucial to get a technological advantage. This is another well placed step on that route for the Ball Corporation.

Rexam did what it had to do

Yesterday Rexam announced that sales the first 6 months this year has been up 2% and that operating profit is up by 25%, all organic and compared to the same period last year. With a new CEO you have to show the share holders, and any other bystanders, that the shift by the helm worked very well indeed.

And it did, cash is flowing and the so important segment beverage cans are also growing by 2%. Beverage cans are the backbone of Rexam with some 2/3 of the business. Speciality cans are said to be one of the drivers of the 2% recording. Generally cans are a growing packaging segment, growing in South America and East Europe, stable in North America and West Europe and a very uncertain matter in Russia. This is obviously a concern when you are leading the market in that particular place.

Nevertheless, speciality cans are back which is a good sign as such. It indicates that confidence in the market among customers is back to a degree.

A few plants have been sold and a few people have been made redundant and now Rexam is floating. The share price is still remarkably low but time will tell what is right there.

On the plastic side closures, in particular beverage closures, are dragging while personal care packaging is up.

So far so good for Rexam this year.