Nestlé expands HOD business
home and office delivery water segment.
Swiss food company Nestlé continues to expand its home and office delivery (HOD) water business, with the announcement this week that it has acquired the Russian market leader, Clear Water.
Both Nestlé and French rival Danone (which owns the Evian and Volvic bottled water brands) have been rapidly expanding into the HOD market on both sides of the Atlantic. Earlier this month, Nestlé Waters acquired Powwow, the leading HOD operator in western Europe, and in October last year bought France-based Saphir. Danone has been active mainly in North America, but entered the European market with the purchase of Chateaud'Eau, also in October.
Nestlé has been active in the Russian market since July 2002, when it acquired Saint Springs, one of the main local bottled water brands with a growing HOD operation. But in the 10 years since its creation, Clear Water has been the main driver of growth in the HOD market in Russia, and will give Nestlé a very strong position in Europe's most populous country.
The HOD sector is set for a promising future in Russia, according to Nestlé, with predicted growth of 30 per cent a year. Clear Water has been aware of this potential for some time, and opened a new bottling factory and distribution centre close to Moscow in 2001, with the capacity to supply up to 120,000 clients in the greater Moscow area.
Clear Water's sales for 2002 are likely to be around €15 million, thanks to a portfolio including more than 40,000 clients, mostly in the Moscow and Saint Petersburg regions of Russia. With the 20,000 clients already supplied by Saint Springs, Nestlé now has a major base on which to develop its bottled water business in Russia.
Prior to its direct involvement in the Russian market with the Saint Springs purchase, Nestlé Waters' presence there was through a distribution office responsible for sales of its top international brands Perrier, Vittel and San Pellegrino. This distribution business will continue to operate as before, giving Nestlé a strong position in all segments of the growing Russian bottled water market.
Nestlé Waters is the Nestlé Group's bottled water division. With sales over €5 billion in 2001, The division claims to be the world's biggest bottled water business.
