Reynolds Consumer Products Stock

Reynolds Consumer Products Inc. operates as a market-leading consumer products company with a presence in 95% of households across the United States.

The company produces and sells products across three broad categories: cooking products, waste and storage products and tableware. The company sells its products under iconic brands, such as Reynolds and Hefty; and also under store brands that are strategically important to the company’s retail partners.

The company has developed its market-leading position by investing in its product categories, championing the categories in partnership with the company’s retail partners and consistently developing innovative products to meet the evolving needs and preferences of the modern consumer.

The company’s products are typically used in the homes of consumers of all demographics on a frequent basis and meet the convenience-oriented preferences of consumers across a broad range of household activities. The company’s products help simplify daily life by assisting with cooking, serving, clean-up and storage through a range of product offerings. The company’s diverse portfolio includes a wide range of products, including aluminum foil, parchment paper, disposable bakeware, trash bags, food storage bags and disposable tableware. The company’s Reynolds and Hefty brands have preeminent positions in their categories and carry strong brand recognition in household aisles.

The company has strong relationships with a diverse set of retail partners, including leading grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers. The company’s portfolio of branded and store brand products allows its retail partners to manage multiple household aisles with a single vendor.

Segments

The company manages its operations in four reportable segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products.

Reynolds Cooking & Baking

Through the company’s Reynolds Cooking & Baking segment, the company sells both branded and store brand aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags and slow cooker liners. The company’s branded products are sold under the Reynolds Wrap, Reynolds KITCHENS and EZ Foil brands in the United States and selected international markets, under the ALCAN brand in Canada and under the Diamond brand outside of North America. With the company’s flagship Reynolds Wrap products, the company holds the #1 market position in the U.S. consumer foil market measured by retail sales and volume. The company also holds the #1 market position in the Canadian branded foil market under the ALCAN brand.

Hefty Waste & Storage

Through the company’s Hefty Waste & Storage segment, the company produces both branded and store brand trash and food storage bags. Hefty is a well-recognized leader in the trash bag and food storage bag categories and the company’s private label products offer value to the company’s retail partners. The company’s branded products are sold under the Hefty Ultra Strong and Hefty Strong brands for trash bags, and as the Hefty and Baggies brands for the company’s food storage bags. The company has the #1 branded market share in the U.S. large black trash bag and slider bag segments, and the #2 branded market share in the tall kitchen trash bag segment. The company’s robust product portfolio in this segment includes a full suite of products, including sustainable solutions, such as compostable bags, bags made from recycled materials and orange bags through the Hefty ReNew Program.

Hefty Tableware

Through the company’s Hefty Tableware segment, the company sells both branded and store brand disposable and compostable plates, bowls, platters, cups and cutlery. The company’s Hefty branded products include dishes and party cups. Hefty branded party cups are the #1 party cup in America measured by market share. The company’s branded products use its Hefty brand. The company sells across a broad range of materials and price points in all retail channels, allowing the company’s consumers to select the product that best suits their price, function and aesthetic needs. These materials include sustainable solutions, such as Hefty ECOSAVE and Hefty Compostable Printed Paper Plates. In 2023, the company also tapped into the nostalgia trend and brought back Zoo Pals plates, garnering 3.7 billion media impressions.

Presto Products

Through the company’s Presto Products segment, the company primarily sells store brand products in four main categories: food storage bags, trash bags, reusable storage containers and plastic wrap. Presto Products is a market leader in food storage bags and differentiates itself by providing access to category management, consumer insights, marketing, merchandising and research and development (‘R&D’) resources. Presto Products was the first in the U.S. market to offer a store branded sandwich bag made with an approximately 20% proprietary blend of plant and ocean, renewable materials. The company’s Presto Products segment also includes the company’s specialty business, which serves other consumer products companies by providing Fresh-Lock and Slide-Rite resealable closure systems.

Products

The company’s portfolio consists of three main product groups: waste and storage products, cooking products and tableware.

Customers

The company’s customer base includes leading grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets and eCommerce retailers. The company sells both branded and store brand products across the company’s customer base. The company generally sells its branded products pursuant to informal trading policies and the company’s store brand products under one year or multi-year agreements. Walmart accounted for 30% and Sam’s Club accounted for 18% of the company’s total net revenue in the year ended December 31, 2023 (fiscal year 2023). Walmart and Sam’s Club are affiliated entities. Sales to Walmart are concentrated more heavily in the company’s Hefty Waste & Storage segment, and sales to Sam’s Club are concentrated more heavily in the company’s Hefty Tableware segment.

During fiscal year 2023, sales in North America and the United States represented 99% and 97% of the company’s total sales, respectively.

Sales and Distribution

Through the company’s sales and marketing organization, the company is able to manage its relationships with customers at the national, regional and local levels, depending on their needs.

The company has a direct sales force organized by customer type, including national accounts, regional accounts, and eCommerce. The company’s sales force is responsible for sales across each of the company’s segments and its portfolio of branded and store brand products. The company complements its internal sales platform by selectively utilizing third-party brokers for certain products and customers. In addition to sales professionals, each of the company’s top 20 customers has a dedicated customer support team, including category management, production planning and transportation teams, as well as customer service representatives.

The company utilizes two routes of distribution to deliver its products to the company’s customers. In many cases, the company ships directly from its warehouses to the customer's distribution center.

Competition

The company’s competitive set consists of consumer products companies, including large and well-established multinational companies as well as smaller regional and local companies. These competitors include The Clorox Company, S.C. Johnson & Son, Inc., Poly-America, Handi-Foil Corporation, Republic Plastics, Ltd., Trinidad Benham Corporation and Inteplast Group, Ltd.

Seasonality

Portions of the company’s business have historically been moderately seasonal. Overall, the company’s strongest sales are in its fourth quarter (year ended December 2023) and the company’s weakest sales are in its first quarter. This is driven by higher levels of sales of cooking products around major U.S. holidays in the company’s fourth quarter, primarily due to the holiday use of Reynolds Wrap, Reynolds Oven Bags, Reynolds Parchment Paper and disposable aluminum pans. The company’s tableware products generally have higher sales in the second quarter of the year, primarily due to outdoor summertime use of disposable plates, cups and bowls.

Intellectual Property

The company has a significant number of registered patents and registered trademarks, including Reynolds and Hefty.

Research and Development

The company’s research and development expenses were $44 million in the year ended December 31, 2023.

Regulatory

The company is subject to various laws and regulations related to data privacy and protection, including the California Privacy Act of 2018 (‘CCPA’) and the European Union’s General Data Protection Regulation (‘GDPR’).

History

Reynolds Consumer Products Inc. was founded in 1947. The company was incorporated in the state of Delaware in 2011.