29.09.06
Spring to success – the growth of bottled spring water production in Devon and Cornwall

One small, but fast growing, industry in the region has benefited from the growth of consumer's looking to buy local natural products and purchasing bottled water on the go.

Leading regional bottled water suppliers Just Water, Cornish Natural Spring Water and Devon Hills Spring Water have all experienced rapid growth over the last five years and are reporting up to 30% increase in sales on the same period last year, thanks to the hot summer.

Spring water production was initially seen as a diversification to their respective farm businesses for Cornish farming families the Dyers, at Trekillick Farm near Bodmin and the Hams, at Treboy Farm, St Clether. With specialist information and support from Business Link and Cornwall Taste of the West, assisted by Objective One investment, both families have turned water production into successful, fast growing and stand alone businesses.

Gary Ensor, agricultural contract manager at Business Link commented, "These are excellent examples of farm diversification projects that with the right package of help and support, have exploited a real market opportunity and moved on to become established as successful, growing businesses. Business Link is continually looking to identify growing market sectors and then support emerging businesses with advice, information and identify supporting finance where appropriate."

Bottled water is the fastest-growing sector of the soft drinks market, research specialists Mintel report. It's been driven by UK consumer's pursuit for a healthier lifestyle, convenience and the increasing demand among a growing minority for re-hydration throughout the day. Bottled water was the greatest contributor to growth in sales of soft drinks between 2001 and 2005 and it's a trend that the region's water producers would testify to.

Colin Dyer, director of Just Water explains, "When we started in 2002 it was just a side line – we were driven initially to open up the spring to water our dairy cow herd. Cows can drink up to 20 gallons of water a day each and our water costs were going through the roof. It was the test results on the water and its purity rating that got us thinking about bottling and selling it to supplement our farm income."

Colin and his wife Pauline subsequently sold their milking herd in 2004 to enable them to devote more of their limitless energy to water production and distribution with the help of four full-time and two part-time employees.

Says Colin, "It is a simple case of economics: the water is worth more than milk and it's more sought after. In terms of market growth we timed it just right," he added chuckling, "but milk is better on your cornflakes in the morning."

Just Water now supply nationwide including prestigious stores such as Harrods and to tourism businesses, independent shops, restaurants and cafes across Cornwall and Devon. A new 4,400 sq ft purpose built warehouse completed earlier this year - supported by a 35 per cent investmetn from Objective One proved to be critical during the heatwave of June and July.

Pauline explains, "We can now store up to 100,000 bottles. We had been concentrating on building up stocks for the summer but we did not expect demand in July alone to be up 25 per cent on last year. The new store meant we were able to deliver to our customers quickly."

"The support and ongoing mentoring from Business Link has been fantastic, this has been a serious learning curve for us," adds Colin. "We had support and assistance from The Cornwall Food and Drink Partnership Scheme which enabled us to invest in new bottling machinery that has more than doubled our production capabilities. That, together with the fresh marketing ideas and industry information we get from Cornwall Taste of the West has made our progress much easier."

The purity and health giving properties of Cornish water have also proved to be ingredients of success for Lawson, Janet and Martyn Ham. Treboy Farm nestles on the periphery of Bodmin Moor at St Clether, the Hams acquired an adjacent spring in 2000 to run as a diversification farming business. They have since given up farming and their son Martyn now runs the business, Cornish Natural Spring Water, with co-director Adam Boundy and five employees.

Filtered through granite and with a high iron content it has become the water of choice in intensive care and oncology wards within Royal Cornwall Hospitals NHS Trust for those convalescing.

The Hams have focused on setting up a sophisticated distribution network and marketing to the pub and restaurant trade with the water stocked by St Austell Brewery and key regional and national wholesalers.

Co-director Adam commented, "Our aim is to expand the business and we are being supported by organisations such as Cornwall Taste of the West and Business Link to do this. The key issues are it's a heavy, low value product to distribute and we are facing increasing haulage costs. Without neglecting our smaller customers we have to concentrate on selling in bulk which makes distribution more economical."

They too are just in the throes of completing a new warehouse and were able to utlise it for their preparations for the summer. Janet Ham explained, "We were concentrating on building up stocks, but the demand never abated - in June alone we were up 30 per cent up on last year."

Adam and Martyn are very focused on moving the business forward. Adam commented, "Demand in the South West will always be led by the weather and the tourism industry. We need to investigate export markets to try and offset the peaks and troughs of demand." He explained, "Business Link have put us in touch with UK Trade & Investment, an organisation which helps businesses located in the UK grow internationally."

Across the border, Devon Hills Spring Water has experienced similar successful growth. Since its re-launch in 2002 it has grown by over 260 per cent to an estimated turnover of £1.2 million for 2006. It has achieved this by building a large consumer base within the South West but also nationally - supplying to wholesalers, cash & carry's and the independent sector.

Richard Clark sales and marketing manager explains, "The three months from June to August account for nearly half of the annual sales - this is as much to do with the weather as well as more people taking holidays within the UK. But a key factor for growth is more consumers are getting behind bottled water for quenching thirst and helping to achieve a balanced diet."

Gary Ensor commented, "This is one growth industry that is clearly benefiting rural businesses and communities across Devon and Cornwall. The strength of these businesses is that they've recognised that demand is already over supplied in Devon and Cornwall and have secured high value sales from markets outside the two counties. Business Link is determined to do all it can to support these emerging fast growth businesses."

For further information please contact Carolyn Daw on 01566 771863 or email cdaw@marketing-pr.co.uk.

The Objective One Programme for Cornwall and the Isles of Scilly has invested in Business Link through the European Regional Development Fund (ERDF) and the European Agricultural Guidance and Guarantee Fund (EAGGF). The Objective One Programme has also invested in Cornwall Taste of the West Food and Drink Marketing Programme through the European Agricultural Guidance and Guarantee Fund (EAGGF).

Editor's notes:

Business Link provides a free information and enquiry service via an information gateway on the web www.bldc.co.uk and via the telephone on 0845 600 9966 to all businesses and those considering starting a business. Additionally, it provides impartial business advice and support through a network of partner organisations, which it co-ordinates, and a register of independent business practitioners.

Business Link for Devon and Cornwall delivers the national Business Link service to the region under contract from the South West of England Regional Development Agency, which was established by government in 1999 to promote the long-term economic success of the region. It does this by working with others to give people the skills they need, encourage enterprise, improve infrastructure, help communities with regeneration and promote the strengths of the region. Business Link has received Objective One investment (European Regional Development Fund and EAGGF) to help companies improve performance and grow.

Clare Morgan
Media Relations Manager
Objective One Partnership Office
Castle House
Pydar Street
Truro TR1 2UD
Mobile: 07973 813647
Telephone: 01872 223439

cmorgan@cornwall.gov.uk

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