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The premiumisation of cement: David Khanna, BPI Visqueen (UK)

Filmed at Cemtech Europe 2015, 20-23 September, Intercontinental Hotel, Vienna, Austria.

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So, I'm going to talk to you about the premiumisation of cement. I'm sure it's a real thing, and I'm going to tell you all about it. But before I do, I want to take a quick introduction of ourselves. You have picked up that i have a Northern English accent and in contradiction to this, I actually going to introduce you to Scotland. There's a good reason for that. BPI Visqueen, where im commercial director is part of the global BPI group and we're actually based in Scotland. So here's a short film to introduce both. Thank you.

There's a beautiful show of a nice cement factory. As the term suggests, innovation is something we pride ourselves on BPI Visqueen. In recent times, the innovation has involved products specifically designed for the cement industry and that's what I want to share with you today. As you might expect, it's been quite a journey.

If we learnt anything about the cement industry over the last few years is that it's been real tough one and to give you some sort of comfort, the world of packaging is no different. We all have our challenges. So, in launching a product in a cement industry, we knew that there was more important things worth to add value.

For us, was about significantly enhancing the performance of packaging, and so that I bring you onto introduce you to Ventisack. Ventisack simply is a venti polythene sack. It's supplied as FFS tubing and there's a back scene where vented channels are hosted. What's far more interesting are the impressive benefits that it boasts.

The first and most compelling benefit of a Ventisack is that it's waterproof. Meaning the chances of spoilage from water ingress are reduced if not eradicated. The level of protection also extends shelf life. As far as we are concerned, in order to do this without entrapment of air, a polythene sack must be vented. It is also more environment friendly than traditional paper sacks. It takes significantly less energy due to recycled polythene, when compared with paper.

Not only that but also the fact that it reduces poly so significantly be it because of water ingress of ripped bags means environmental cost of waste of cement is also reduced. We estimate, it has a potential to reduce C02 emission footprint by packaged cement up to 30% where transition to vented polythene has been made.

Finally, as Ventisack also provides an enhancement market in vehicle, it just created a new opportunities for differentiation, transform product perception and increase shelf appeal. As you can see, it looks great and is available for four three coats 360 degree spread. And this is what I would focus rest of my time here with you, the premiumisation of cement. But if you keep trends that have been developed over the last decade, the first is the right of the super super markets. Whereas in previous decades the story was very much about the growth of the supermarket as a food retailer, moving towards non-traditional FMCGs.

Today, the giants of this world are expanding way beyond their comfort zone. If there were 360 degree retail before, there must be 720 degree today. What this means is that the goods you would have normally traditionally needed to go to a specialist retailer, so just DIY material can now be picked up in the aisles of Tesco, Carrefour or Walmart.

The second is the mainstreaming of the DIY retail environment. This is particularly evolved due to the new type of consumers embracing DIY, a frequently what was traditional warehouse style environments. These consumers have different expectations when it comes to the retail environment. The more refined expectations if you will, mainstreaming has also been the course of action for the DIY retailer and the bit remain resilient against a lot of the super supermarkets.

Whichever way you look at it, the packaging expectations of retailers for DIY products have transformed. In the super supermarket, packaging is always king. If your packaging doesn't fit, then simply you won't get it on the shelf. For the mainstream DIY store, they're attempting to reinvigorate the offer and naturally packing is part of the proposition.

Naturally, we are interested in understanding more about the consumer's perception in relation to the packaging for cement. Specifically, we want find out whether packaging cement in polythene was more appealing to consumers than traditional paper sack. Sure we already knew that polythene packaged cement commanded a higher retail price but we didn't know how people felt about it.

For example, would cement packaged in polythene attract customers on account of the packaging alone? And if this was true, did we understand the benefits of packaging over one type or another when purchasing products such as cement? Was this because they had previously cement packaged in paper, and therefore experience the shock comes with a paper sack or did they just believe it was better?

Was there something intrinsic about the choice of product packaged one way or another? So we conducted a recent survey to understand more about this. What we found out so far is the significant way to the argument that polythene packaging [xx] cement. So onto a packaging perception survey. We put a survey out to a 1000 respondents so far, primarily in the UK.

We've had between 60 to 40 split between male or female respondence, with an age range between 18 and 60 plus, with 45% of them being aged between 45 and 59. Interestingly 32% have never bought cement. This was good news because there's also interested in those who haven't bought cement yet. Their perception are just as relevant, and that's where we'll start. What did those had never brought cement before know about the packaging options available.

This was important to us because we wanted to know whether the non cement buying consumer would know anything about the availability of polythene packaged cement. As potential cement buyers of the future, what did they know already about could lead them to chose cement packaged in way or the other. When we asked those who have never bought cement whether they knew that they could buy cement packaged in polythene, 65% of those said yes and 35% stated they did not know they could buy cement packaged in polythene.

This was interesting to us. Consumer of all types including those who had never bought cement before knew that was available packaged in polythene. A number of these things could explain this, including not being the purchase and decision maker when the cement was purchased before or having knowledge of someone else buying cement.

Either way, this was positive awareness, was significant. We asked the question for those who'd bought cement before how was it packed. 50% said in paper, 40% said in polythene and 10% said the couldn't recall. Where last cement purchased was packaged in polythene, we wanted to find out what's they chose about the customer we want to know why.

Did the benefits of polythene sacks stand out? Were the benefits what we expected? What inactive choice did they deliberately going to buy this product packed in polythene or was it the only option available in store? And these are the responses that we received. We asked them multiple choice questions and to list the reasons for this purchase. 40% said it was because it was waterproof, 35% easy to handle, 35% also because it was more burst and tear resistant.

30% said it would last longer, 25% said it could be stored outside, 5% for more environmentally friendly and 5% said it was the only option available from the store. We then asked having bought the cement packages in cement how they felt about their next cement purchase. We want you to know if the expense of buying cement packaged in polythene would affect their future in buying behavior.

We also wanted to know if anyone would not buy the products again and lastly we would want the considerations back in the decision. And finally things were interesting, 67% said they would buy this product again which was great and 33% said they would buy this only if the price was reasonable. Which means over two thirds were not overly concerned about the additional cost.

Would they consider all packaging options again? 0% answered that and they never buy again packaging polythene, again 0% answered that. We then wanted to know if the paper would still be an option, with the expense of buying cement packaging polythene put them off by any paper again, and polythene all the options now will prevent them from purchasing again.

So we ask the questions, would you consider buying cement packaging paper? 55% of them said yes. And 45% said no. What we can see is the shifting consumer demand once they have purchased cement in polythene. Continuing with the survey we wanted to know more about those those who have never bought cement have to say.

If there was something intrinsic of the benefit of packaging what was made from polythene compared with paper, then we would see that represented here. This group is highly valuable to cement producers. For many customers, cement is an equal purchase off than the one off. And these consumers could represent the future of market share.

We asked if they bought the cement in future what would you prefer to be this packed in. A massive 88% said polythene, which was amazing and only 6% said paper, but many 6% said other or no preference. This shows the direction of the demands of the consumer on what they are really looking for given the choice. We asked for the reason they would look for cement packaging polythene, we again offered multiple choice questions, and asked them to choose one or more of options from the list.

80% said due to more burst and tear resistant, 5% highly waterproof, 60% said because it was stored outside, 50% since it's clean to handle 40% say will last longer and 5% chose more environmentally options. We asked if they would pay more for it. A resounding 85% said yes and 15% said no. Well you can't please everyone there.

Again, showing the strength of consumer demand of cement packaged in polythene and their willingness want us to pay a premium. So what are the key insights we have learned from our survey? Consumers tend to already know that they can buy cement packaged in polythene. The main benefits people sort out were that it was waterproof. It's easy to handle, it's more burst and tear resistant, can be stored outside and it last longer.

Having bought cement packaged in polythene, consumers would seek out polythene packaged cement for future purchase. A significant number consider buying cement packaged in polythene, packaged in paper. Sorry. For those consumers who have never bought cement before, the majority would choose to buy polythene packaged cement.

And those consumers felt stronger about the benefits they would enjoy. So, to out interim conclusions, are the benefits of polythene packaged for cement above obvious an intrinsic to consumers. Paper packaging is unattractive option. Consumers are willing to pay a premium for it and we are confident that this is leading to the premisation[sp?] of cement. So on our next step to further confirm consumers changing demands.

Expand the survey out to different geographies. We will look to [xx] the largest sample group and could book the most scientific purchase behavioral study and more importantly we're looking for partners just like yourselves. So please do speak to us and let us know your thoughts, your views on these changes in the markets and how innovation could improve your market share.

I'm going to leave you with another short film which shows you Ventisack in action. From cradle to grave before taking any questions. Before I do, I want to briefly talk to you on the commercial success today that we've had with Ventisack. We have supplied over 28 million of them. I would say Ventisack is already well established in the UK and some European markets. We're growing the product fast in some key international markets.

Primarily Australia and New Zealand. Our pipeline is going to be focused at global in the next three years. This is the largest report by volume in early staging inquiries that we've seen come through from the source of our communication activities. In fact, we've got inquiries from every corner of the globe, South America, Russia, Africa and India. All of these are extremely exciting to us and I'm sure you will agree that it is just a tip of the iceberg.

I hope you have enjoyed hearing about Ventisack and I really hope you are very interested in finding out more about it. So come and speak to us at some point throughout the rest of the events. I wont keep you any longer so I will introduce to a final film titled 'The New Norm in cement'. Cement production has almost started this late year and little has changed in the way that it is quarried, transformed into clinker and finally processed to produce cement.

Today cement is typically being supplied to the market in traditional paper sacks but major change is a shift in the way that is now packaged and supplied to the markets at large. Cement is now reaching customers in polythene packaging. Not only does polythene offer enhanced weather resistance to cement so that it can now be stored outside, plus improving shelf life, it also provides an enhanced marketing vehicles which creates new opportunities for the differentiation, transforms product perception and increases shelf appeal.

Using polythene in this application is not without its challenges and that's your side effect of packing cement material into the polythene bag is entrapment of [xx]. [xx] by intentionally a variation of products in the production of value in process in order to create fuel. Ultimately, a policy instruction in this application, needs to be vented.

Achieving this, whilst maintaining the water proof credentials is no easy sheet. A technologically advanced approach to [xx] is essential. An answer to this problem, BPI screen has launched Ventisack. Manufactured to the high standards for a global market. Rigorously tested to ensure performance and protection, Ventisack is an innovation in polythene packaged in for cement.

Ventisack gives the manufactures the ability to distribute their cement to the market which will reach the end user unadulterated. It also gives them the opportunity to promote the benefits of the product like never before. By working major manufacturers, we're further enhancing the performance of policy. As we move towards a 50% split in the production policy in paper banking, Ventisack will literally become the new normal in cement.

Thank you, any questions?.

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