WBD strengthens its water business
purchase of Essentuki, one of the country's best known brands.
Wimm-Bill-Dann,the Russian company which has built a strong position through strategic acquisitions in the dairy and fruit juice sectors, is set to do likewise in the mineral water market.
After just six months of doing business in the bottled water market with the launch of the Sanctuary Valdai brand in February, WBD has today announced the acquisition of a second bottled water company, Healing Spring, as well as its Essentuki brand and Geyser, the company which owns the natural wells from which the water is drawn, for $4.1 million (€3.7m).
Famous in Soviet times, Essentuki is still one of Russia's best-known mineral water brands, and it will give WBD a major foothold in the potentially huge Russian bottled water sector.
Healing Spring (Essentuki) produces the Essentuki No.4, Essentuki No.17 and Essentuki No.20 brands, and has a production capacity of around 6,000 units per hour, WBD said.
Essentuki mineral water is bottled in the classic 0.5-litre screw-cap bottles long associated with the brand. Under Russian quality standards, only the original dark-green bottles are used in the filling process, ensuring the high quality of the final product, WBD added.
Michael Kondyrev, head of Wimm-Bill-Dann's mineral water division, said that the acquisition not only gave WBD access to a high quality water and production facilities it also gave it a hugely popular brand name on which to build its bottled water business - something which has already been the key to the company's success in the dairy and fruit juice sectors.
Sergey Pavlov, marketing director of the mineral water unit, said that the company did not plan to make any major changes. "We will stay true to the Essentuki brand and preserve all the healing qualities of this famous water. Essentuki is the only mineral water on the Russian market, which meets the strict requirements for quality standards. We will also keep the original dark-green bottles."
The move into the bottled water market will only increase speculation about a possible takeover of WBD by France's Danone, especially as Danone is active in both the dairy and mineral water markets. In fact, water is becoming increasingly important for Danone, with a number of high profile acquisitions in the home and office delivery (HOD) sector.
Although Danone has repeatedly denied its interest in WBD, the latter's continued expansion into bottled water could prove a decisive factor, especially as Danone's arch rival Nestlé has expanded its Russian bottled water operations with the recent prchase of HOD market leader Clear Water.
