Private Equity Funds | The Future of the Water Cooler Industry

The world of water coolers has changed again and the sale in recent months of the two largest water cooler companies to private equity funds marks a new direction for the European & American water cooler leaders. Where will the future of water cooler industry lead us?

the future of water coolersFirst on the 17th June was the news that Eden Springs had been sold to Rhône Capital for a remarkably small sum of 240m Euros. Then just over a month later came the news that Crestview was to acquire DS Waters – the largest water cooler company in the USA for around $4bn. Not enormous investments for funds of this size but certainly investments that mark a change in ownership for the market leaders in two continents.

So the question for the smaller players in the markets is will these new owners – Rhône & Crestview – bring renewed enthusiasm and investment to an industry that has historically been led by chaotic & under-investing market leaders.

Our hopes many years ago were that early investors in the European water cooler industry like Danone & Nestle would bring large marketing budgets and provide momentum for the industry in general. These hopes were not realised and both companies simply served to bring bad service levels & lackadaisical strategy to lots of water cooler customers.

From 2003 through to 2008 (and arguably until more recently) the largest water cooler companies have harmed the long term reputation of the water cooler industry.

However all was not lost, and it was the small & medium sized operators that have rebuilt the positive reputation of the water cooler industry over the last five years. Imaginative, customer-service driven water cooler operators have done more to restore a positive reputation than any of the big players. We regard our own brands like The Water Delivery Company & The Water Cooler Company as being a positive part of this rebuilding process.

Fundamentally PE/VC are not long term players in any industry and they are looking for returns in the short/medium term through a sale. If they can have the vision and foresight to increase the value of their asset by focusing on marketing, PR, customer service & product innovation then this will benefit the entire industry. If they play an active role in the industry though bodies like the BWCA and the EDWCA then all the better.

Opinions on the future of water cooler industry are welcomed from all – Drinking Waters will be playing a positive role.

 

Rob Laughton

Rob Laughton

Rob Laughton is an established part of the UK water industry and has business interests in drinking water products.

He is actively involved in the self-regulatory associations which work to keep strict standards within the UK hydration industry.
 

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