Still waters nun rich

Press, 24 February 1988, Page 35

Still waters nun rich

By

NEILL BIRSS

The South Island, with its lakes and vast underground reservoirs of pure water, is seeking to tap the world boom in table waters.

Bottles with at least two Canterbury labels will soon be in California supermarkets competing with such famous French brands as Evian and Perrier. Mr John Macdonald, managing director of Aqua Source Holdings, Kaiapoi, which has taken over Alexander Cordials, already has NZ Natural (pronounced in the American way, EnZee Natural) in a fashionable water bar in Beverley Hills, Los Angeles. He is negotiating for EEC recognition of NZ Natural, and has been developing markets in North America, the Middle East, and Asia. The New Zealand Water Development Corporation is trucking water from near Mount Cook for bottling under contract and hopes to ship a hundred containers a year to North America. What’s all the sudden fuss? Mineral waters have been around since at least Roman times, and our great-grandfathers were bottling it in New Zealand 125 years ago. We all know the French are into it because their water is bad and their livers are shot from too much wine. Only in Asia is demand still driven by hygiene. Elsewhere, the push is the chlorine taste of many city water schemes. It’s also the counter-swing away from booze: here is something you ask for without embarrassment at a party. It’s the alterna-tive-health boom which means some want the waters for their minerals again. It’s the realisation that here’s a product that taste can be developed in — call it sophistication or snobbery, in this way it appeals to connoisseurs and yuppies just as cheeses, pates and wines do. The French now have safe tap water. But they are suspicious of it, and they drink more than 70 litres of table waters a

head each year. Perrier, the largest bottling group, has sales of more than SNZ6OO million a year. Perrier is lightly carbonated, the gas being piped out of the strata that contains the water and put back into the water in the bottle under pressure. But still waters are the larger part of the market. More than 220 rail waggons of bottled still water leave the Evian plant in France each day. As with wines, the water imbiber begins by chugging carbonated waters, then as the taste develops, moves to still waters. This is the theory of many experts, but such rock-solid people as the Germans and Swiss, with a long tradition of drinking table waters, still prefer the gassy to the flat. More than 100 years ago Thomson and Company of Dunedin was exporting Wai-ronga mineral water from North Taeri to Australia. Until a decade or two ago Lemon and Paeroa, a popular soft drink, was made with mineral water from Paeroa. Mr Len Brown, of the Geological Survey in Wellington, says mineral water was bottled by Lion Breweries at Puriri, near Te Aroha, until a few years ago. Water comes out of the ground lightly carbonated (as Perrier does) in a number of places in New Zealand, but especially in Northland, and he says such springs at Kamo would be ideal for bottling for Aucklanders. (Northland once also had medicinal bathing resorts as Rotorua still does.) In Canterbury highquality still waters are the attraction. However, Mr Neil Cameron, of Christchurch, marketing manager of the N.Z. Water Development Corporation, says his firm knows of one carbonated-water source it is keeping quiet about. Mr Macdonald, of

Aqua Source Holdings, plans to put a carbonated spring water on the market soon, the gas being added in the bottle. Because “naturally carbonated” waters overseas nearly always entail the underground gas being forced back into the water in the factory, the distinction seems trivial. And the Americans, who constitute the big market, are less finicky about such fine distinctions in water. Since 1976, the American market for bottled waters has been growing about 14 per cent, compounded, each year. In 1985, Americans used more than 1.2 billion gallons of bottled water. Per capita, they drink a third as much as the French, and the demand varies very much from region to region. The Pacific states are the biggest market, accounting for about 40 per cent of the consumption. This should be an advantage for New Zealand, but the Water Development Corporation says it has to pay SUS2SOO a container for freight to North America, compared with SUSIOOO from Europe to America. The high freight charges and the expensiveness of packaging in New Zealand are the main obstacles for exporters. John Macdonald set up Aqua Source Holdings in June, 1986. Raised in South Canterbury, he graduated from the University of Otago with a B.Com. in international marketing, and became marketing manager of Tullen Industries, the Auckland firm which designed and exported Tullen snips. These became a household name in Canada, South Africa and a number of other countries, he says. A multinational took the company over, and Mr Macdonald sought a new career. “I realised New Zealand had a resource in water that had never been developed and utilised. At the same time I recognised how competitive and difficult the international water market is. There are more than 110 waters from all over the world in the market.” After market research, he decided water could be exported successfully if it could be marketed with a strong New Zealand image indicating purity of the product and of the environment from where it came. Mr Macdonald and a hydrologist, John Fenwick, then researched every source of water they could find in New Zealand. They settled on South

Island water because of its low mineral content. Table waters are classified by their mineral content in parts per million. Medicinal waters overseas can be as heavy as Sicheldorfer, of Austria, which has 5400 parts per million of minerals. The aquifer hundreds of metres below Kaiapoi that is tapped by Aqua Source Holdings has 91 parts per million of minerals. With the water identified, Mr Macdonald went to a venture capitalist, the former Growthlink Holdings, of Auckland, which has become the Met Life Group since it took over Metropolitan Life Insurance. Injecting money, it took a holding of 50.1 per cent in Aqua Source, Mr Macdonald and Mr Fenwick owning the rest. Aqua Source Holdings has injected new life into a dying Kaiapoi industry. When it took over Alexanders Cordials in October, soft drinks were being bottled on only a few days a month.

With marketing plans firming into orders, Mr Macdonald hopes to have the factory running in three shifts this year.

He plans to maintain the present soft-drinks line of Alexanders and its wine shop. He may update some of the old recipes such as sarsaparilla and creaming soda, but believes there is still a good niche market for the firm amid the bigger soft-drink bottlers. Aqua Source also bottles a carbonated water under contract for a Christchurch businessman, and for Auckland interests, which use the label, Waimak Water.

The factory was founded in 1861 by William Alexander, a Royal Navy veteran, according to the “Cyclopedia of New Zealand.” It was a family business until taken over by Aqua Source Holdings.

Mr Cameron, of the Water Development Corporation, also has a marketing degree, but from the University of Canterbury. The Water Corporation grew out of Triune Resources, which originally had American connections, and was more interested in tanker shipments of Fiordland water than in bottled table waters. The principals of the corporation include Mr Jock Lee, managing director of Far Pacific Traders, and other persons with links to Finance and Resources. Their brand, Kiwi Pure, sells on Air New Zealand international flights, in Australia and at some New Zealand outlets. The

company is trying to set up outlets for the water in the United States. “This is a game of volume,” Mr Cameron said. He speaks of pushing exports out at break-even prices, then relying on sales volume to bring down production prices, mainly for packaging, to provide profit. The company has eyes on the huge Japanese market, and has spent $lOOO. on obtaining Japanese approval for entry.

stabilising the water to prevent it going off. They decline to say what process is used, and point out that the European bottlers keep their processes secret. Maureen and Timothy Green, in their book, “The Good Water Guide,” say: “The whole essence of a mineral water is that it is ‘live’; that is to say, it contains bacteria. It’s just like eating yoghurt, which contains benign bacteria, beneficial to your system

Its Kiwi Pure label is being bottled in 275 ml glass bottles and 600 ml and 1.5 litre PET plastic bottles. Both Mr Cameron and Mr Macdonald emphasise that the main problem is

Under the EEC regulations, the bottled waters must not be pasteurised or treated with ultraviolet light to sterilise them. The health aspect of different waters is becom-

ing important in marketing. Citizens of the recently defluoridated Waimairi District may be interested that one wellknown French table water advertises it is good for children’s teeth. It is naturally fluoridated.

Strong measures against driving after drinking have been a force in pushing up sales of sparkling mineral water in West Germany. This might be a good marketing tool in New Zealand. And those who wish to give up driving rather than drinking should be aware that mineral water between drinks will help to prevent headaches and hangovers.