In June, Cooler Plus reported that Cott Corporation had acquired European water cooler business and coffee company, Eden Springs for €470 million, from investment funds affiliated with Rhône Capital. The purchase price is around seven times Eden Springs’ adjusted pre-tax earnings – over €60 million for 2015.
Based in Canada and the US, Cott is the world’s largest private label drinks maker, but significantly also majors in water coolers, since its acquisition of leading US water cooler distributor DS Services of America Inc at the end of 2014.
We spoke to Eden Springs CEO Raanan Zilberman (PICTURE) to discover if we might see major changes in Eden’s activities in Europe in the future.
Raanan, you’ve been CEO of Eden Springs since 2005 and have led the company through much growth and changes. Could you tell us a bit about where Eden is today?
Following our acquisition of Nestlé Waters Direct in 2014, Eden operates today in 18 different countries. According to Zenith’s latest report, we are number 1 or 2 in nearly all these markets and the leading HOD company in Europe. We utilise 27 different water sources across the continent, and distribute more than 730 million litres a year. That volume puts Eden as the fifth largest multinational still water brand in Europe, after brands like BonAqua, Evian and Volvic. Eden has an installed base of approximately one million water and coffee machines that are serviced by more than 3200 employees and 1200 service vehicles each day.
What has been the company’s focus since the change of management 2013 to Rhône Capital?
We had a very good partnership with Rhône, who supported us in several areas over the last three years including:
• organic growth, via investment in sales excellence initiatives
• operational excellence
• enhancing and developing the coffee offering
• expanding through acquisitions
• creating a set of strategic alliances with adjacent businesses and leading brands in our industry
In retrospect, I believe we’ve succeeded in all efforts, which have contributed to our success and kept the momentum of our value creation.
What contribution do you believe the Eden brand brings to the table?
Eden has leveraged to its best capacity, the concept of ‘multi-source, one brand’ in the European HOD market. In many of our markets, we have direct B2C activity through the home channel, and in that domain the brand, with its high quality local spring water, is a key factor in consumer decision-making.
In the business-to-business segment, Eden has positioned itself as a leading multinational service provider, where the brand is positioned and perceived as a top quality product coupled with world class service.
In our coffee activity, we operate with our own brand, Edenissimo, as well as a selection of key premium national and regional brands like Lavazza, Robert Paulig, Dowe Egberts and others, to meet the needs of local tastes.
Talking of coffee, Eden was among the first HOD companies to introduce office coffee services (OCS) into the business strategy. What benefits can you see today from that move?
Indeed, just a few years ago, we set a goal to become a one-stop shop for both water and coffee solutions in the workplace. Interestingly enough, we decided to change the company name from Eden, to Eden – The Water & Coffee Company, before we even started to sell coffee.
The first challenge we faced was internally, to convince the employees and management
that the strategy could fly and add value.
A second challenge was providing the right coffee offering, in terms of brands and equipment, to meet the local coffee habits in the different markets.
Ultimately though, offering the two product lines increased our ability to better serve our customer’s needs, increase cross selling and upselling, and enhancing the customer relationship and loyalty with Eden.
Just over a year ago, you accomplished a multi-country acquisition of your main competitor, Nestlé Waters Direct. Can you tell us about how this major acquisition has gone?
From the outset, we found a great team of employees and managers within the NWD organisation, who have been instrumental in a successful integration.
The company had been well-managed, and we were fortunate enough to adapt many good ideas and practices coming from NWD. The integration went quickly, leveraging activities in operation, unifying the brands and consolidating the way we do business. We introduced our commercial offers, in particular the coffee services and POUs, in all the new markets. In less than a year, we can say that the entire activity has been integrated and is already adding value to all stakeholders.
Eden is well-known for its competency in acquisitions. What can you share today with us on this topic?
Indeed, we have conducted over 80 acquisitions in the last 15 years. To be successful in making acquisitions you need
a. The resources to make it happen
b. The know-how to make it work well
Eden’s strong operational performance provided the needed cash flow to make it happen. Our experience and understanding in M&A has allowed us to identify the opportunities, strike good deals and most importantly, successfully integrate the acquired companies into the Eden platform.
What do you expect from the new Cott / DS Services / Eden Springs partnership?
I am very excited about this new opportunity and next stage for Eden Springs. We will operate inside a multi-continent, multi-billion dollar organisation that is steering itself to be a world leader in the beverages service sector.
I can see only opportunities, including the ability to leverage existing and future product and services for the benefit of our customers on both sides of the ocean. We will be able as well to share best practices and improve operational excellence and service skills.
Last but not least, the ability to utilise additional resources for both arms of expansion, organically and via acquisition.
What are your thoughts about the concept of a multi-beverage machine offering?
I am a strong believer in the concept for both home and workplace.
The breakthrough can take place only once reliable and affordable equipment and brands will be introduced. To be a success, this may need more support in above-the-line marketing and advertising, an area in which our industry needs to continue and develop.
What do you envision for the future of our industry in the coming years?
I can certainly see growing demands for good water and coffee services in workplaces and homes. I see several strong phenomena that support the future growth of our industry.
First, mineral water and healthy hydration is growing at the expense of sugary drinks.
Second, coffee premiumisation is expanding, with consumers demanding more specialised drinks like espresso and milk-based beverages, which require specific machines, consumables and services.
Third, companies are recognising more and more that one of the best investments for a productive and motivating working place environment is the offer of high quality products and services of water and coffee drinks.
Last but not least, I believe that technology in general, and the ‘internet of things’ can bring changes and opportunities to our industry. At Eden we are currently taking steps to participate in this change, to ultimately improve the customer experience.
Lastly, as the CEO of the leading HOD Company in Europe, could you please share with us your vision for Eden Springs?
I believe that every office in the world needs a water and coffee solution, and that will never change.
Employees will never bring their water or coffee from home.
For both water and coffee services we have the:
• Same customer base
• Same decision maker
• Same business model
• Same fragmented industry
Eden should continue to be the first choice service provider for any office across Europe.