just The Answer - Highland Spring Group CEO Les Montgomery
Highland Spring wrestled top spot in the UK from Evian
Highland Spring Group's namesake brand was confirmed this week as the top-selling bottled water brand in the UK. just-drinks talked to the group's CEO, Les Montgomery, yesterday (9 April) about the brand's long fight to the top and how it is survival of the fittest in the water industry.
just-drink: Highland Spring has overtaken Evian as the UK's most popular bottled water brand. What does that mean to you?
Les Montgomery: We were delighted when the news came through at the end of last week. We knew it would be close.
j-d: Have you been eyeing the top spot for some time?
LM: Yes. I took over in 2008 as chief executive and set some targets. We wanted to become the leading supplier of bottled water and we achieved that in 2010. But it's not just about scale, it's important to build a sustainable and profitable business as well.
j-d: In 2010, sales were up by 26% but net profits were down. Have you had problems turning the high sales and volumes into profits?
LM: The profits have been fairly steady the past few years. The economic climate has been been tough and its been important for us to stay on a growth trajectory without going backwards in terms of profits. It's survival of the fittest at the moment and we're just having to work harder to keep our share.
j-d: How have you managed it?
Highland Park Group CEO Les Montgomery
LM: A lot of hard work. It's taken time - we've been in business for more than 30 years and the market was very small then and covered by the European brands. It's been slow and steady progress over all that time. We're one of the few major brands in still and sparkling, and we cover all channels. So, as well as the retail channel, which is very important to us, we have a strong presence in food service, convenience and cash & carry. We have a finger in all the different channels, and having still and sparkling I think is also very important.
j-d: In December you launched new sizes for restaurants. Is the sector a focus for the group?
LM: The restaurant sector is very diverse. In London you can go into ten different restaurants and you'll see ten different brands. So there's a lot of brands that have focused their attention on that sector. We have a couple of sales people but it's not a major part of the business.
j-d: What does it bring to the brand?
LM: We're a good quality product so if the restaurant wants to stock it that's a good reflection on both us and the restaurant. We wouldn't sell anything that doesn't make financial sense, so it's important to make sure that whatever we're selling we are trading profitably.
j-d: Did a packaging revamp for Highland Spring in February last year make a difference?
LM: That made a big difference. It gave the label a fresh look, a really happy, light looks. We focused on the colour purple, the Highland Spring colour. We brought it to the fore and that's done really well for us.
j-d: Figures this week showed that the bottled water market grew last year by 3.3% Why?
LM: Despite the recession, more consumers are coming into the market. More than 50% of the households in the UK buy bottled water. Consumption has gone up from 33.1 litres a year to 34 litres in 2012. That's still a long way from our European counterparts, however it's going in the right direction.
j-d: Do you have a focus on exports?
LM: Only 2% of our total volume is exported. We've been exporting for 30 years, so I'm not saying it's not important, but we don't see it being the biggest part of our business. We have a reasonable-sized market in the Middle East (Dubai, Bahrain, Kuwait and Saudi Arabia), and contracts with coffee chains there. We also supply some of the Caribbean islands and have worked with a distributor there for about 20 years.
j-d: What do you plan to do next?
LM: We want to maintain our number one position, we don't want to lose that. But it is about slow, steady growth and continued investment.
This month, Ray Rowlands of Drinksinfo Ltd follows up on the reports that PepsiCo is planning to launch a premium brand into the burgeoning US bottled water market next year, in an attempt to accelera...
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