Radenska Adriatic is a mineral water and beverage production company. It has operations in Slovenia and in Croatia and exports products to several other countries. Since 2015, Radenska is part of the Kofola Group from the Czech Republic. Marián Šefčovič started his career at Kofola in 1999. He was a member of the negotiating team for the acquisition of Radenska and after its takeover he was appointed General Manager of Radenska. Today he is also a President of the Beverage Industry Association in Slovenia.
Why is sustainability important for Radenska and what are your most important sustainability focus areas?
Sustainability is very important to us and has become a strategic topic in the last two years. This does not mean that we were not thinking about it before but there is a big change in how we see it.
Now it is not so much a question of profitability but something we have to do. If not, we will not survive as a company within 10-15 years.
When we prepared our strategy, we divided sustainability into three main parts: environment, products and people. Whenever we do something in the business, we have to think about in which category it fits.
What are your main challenges and goals in these areas?
Regarding environment, the first priority is the protection of water resources. Selling mineral water is 60-70% of our business. One area of focus is our reduction of technological water use where we made 10% saving last year. Another action is the zero waste office project that we started two years ago when we decreased communal waste by 13 tons in one year. We also started to use green electricity for our plants. The price is slightly higher but we accepted it.
With products, we focus on decreasing the volume of the materials we use. I always say that PET as a material is good but we still have to decrease the volume we use. So we are trying to make everything more lightweight, the bottle, the neck and the foils. Together with making packaging lightweight, gradually we are also starting to use recycled PET (rPET). Last year we brought to the market the 0.5 liter bottle made of 100% rPET.
At the same time we have a big focus on returnable glass bottle packaging.
It is already a big part of our portfolio in the HORECA sector (hotel, restaurant, catering), but during the COVID-19 pandemic, we also made a significant projects into promoting purchase of our products in 1l returnable glass bottles. Today 95% of all glass bottles are returnable. The remaining 5% is what goes to export.
We are not selling packaging though, but high quality products and to make our products more healthy we are reducing the sugar content. This is tricky because consumers always say they do not want products with sugar but then they do not like the alternatives. I think sugar issue is very similar to PET issue. It is not necessarily bad, the question is the amount. We also have products like ORA or Pepsi without sugar, but the sale of those are not that high. Products with less sugar have better results on the market than the ones without sugar.
Finally, for us people mean most importantly employees and customers but also the families of our employees. One special initiative related to this is also connected to our logo, which contains three hearts. Everybody in Croatia and Slovenia knows the company as the water with three hearts on it. Two years ago, we decided to give trolleys to all triplets born in Croatia and Slovenia. In the last two years already 24 trolleys were given to newborn triplets. But going back to operations during the COVID-19 pandemic, we had a large focus on supporting the employees. Not only because it was very hard for everybody, but also because everybody dealt with the situation in a different way.
You mentioned the recycled PET. Is it easy to purchase this type of material?
We are able to purchase the material but the challenge is that the material is now very expensive. Compared to virgin raw material, the price difference is 20-30%. This is also why we are trying to create more lightweight products to compensate for the price. rPET also behaves differently in production, therefore some adaptations are necessary and that also takes time. However, it is getting harder to find this material because all producers are starting with it.
In your work as a CEO, what do you personally do to make the company more sustainable?
My first role in sustainability is to try to follow the group strategy because the main direction has to come from the top of the company.
The other responsibility is with the team. On one hand, we always have to keep this topic alive, and bring it up during discussions and meetings. On the other hand,
it is very important to talk to employees about why we are doing this.
For them, sometimes it is just complication in their work. They have to understand that this is something we are doing for the future of the company.
My goal is – and I think we are very close to this – for people in key positions to have this be a normal part of their thinking. We cannot forget about sustainability, it has to be included in everything we do and we have to be one step ahead of the market.
Whom is it harder to convince about sustainability, the employees or the owners of the company?
Employees are more difficult to convince in our case. The reason for this is that our owner, Jannis Samaras (majority owner of Kofola Group), is very environmentally-oriented and is pushing this strategy because of his personal commitment.
As you have just mentioned Radenska is part of the Kofola Group. How do you coordinate with them with sustainability initiatives in practice?
With sustainability strategy, cooperation is very easy. We receive strategic objectives from the Kofola Group and the only thing we need to do is to find the right way of implementing it in Radenska. After all, you cannot do all the things in the same way everywhere.
Do you think cooperation is easier when you have an owner from the same CEE region, namely from the Czech Republic, than if you had one from Western Europe?
I would not say cooperation is different because the parent company is Czech, German or Dutch.
What makes a difference is if you communicate with the owner directly or with managers.
When my boss is the owner it is much easier to do many things. We can do things faster because I can call my boss and get a green light immediately. If you have to get approval from a global company it can take six months. For example, we are now working on a community project which also supports sustainability. If it makes sense, we will be able to get the go-ahead and the budget easily.
We already spoke about employees and the owners but what about business partners like customers or suppliers? Do they wish for Radenska to do more in sustainability?
Of course we see also their strong focus on sustainability. They are asking us about what we are doing, but my feeling is that even if now it is more about asking questions, in two to three years it will become a normal part of our cooperation.
On the other hand, when we develop a more sustainable product, business partners usually like it and it is much easier to sell them. They challenge us, but at the same time they support these initiatives.
Of course we try to motivate our suppliers as well. Energy is a good example. As mentioned, we use green energy now. In Kofola we have a transport Company who switched to using CNG trucks to reduce the carbon footprint by 25%. And with the rPET suppliers we are in continuous discussion to have enough capacity in the future on their side.
Do you cooperate in sustainability with the big retail chains as well?
What we do with retailers now is the use of more returnable glass bottles. Based on the feedback, the retail chains like this initiative and at the same time, the customers also accept it and like it, even though it is not easy for them because they have to bring back the bottles.
One of the biggest challenges is that customers like sustainability but they do not always accept price increases because in the end, this is about business. With the Radenska Natural rPET bottle, we were able to compensate the 20-30% higher price of rPET by reducing the weight of the packaging, but we will not be able to do this with all the products. In the end it will decrease our margin and we will have to find ways how to cover this cost or products will have to be slightly more expensive.
Sustainability has a cost. Everybody knows it is not free of charge. But they also know that we have to do it.
Will consumers buy more products if you are more sustainable?
Consumers accept sustainability and like it. It is not about if they will buy more.
Our feeling is that if we are sustainable they will buy, and if we are not sustainable, they will not buy from us in the future.
It is all about the awareness and we want to help raise it..
Beverages and bottled water are very much in focus because of packaging waste. How do you see the future?
Across the world, PET is viewed as a big problem. I always say that PET as packaging material is very good and I do not see a better alternative. But we have to think about it as a reusable material and not as something to waste. The recycling of packaging is the most important issue for the entire beverages business. We need to push the focus towards recycling. Additionally, you have to focus on the balance: balancing between different customer needs and balancing between different packaging types.
All of us are responsible for recycling as consumers and ultimately the state has to make the regulations.
But the business sector has to support consumers and communicate. One way of this support is also positive motivation.
Radenska had a nice marketing campaign last year which is a good example. With every 1 liter glass bottle sold, we reserved a small amount and with the proceeds planted 10 thousand trees in both Slovenia and Croatia.
