Bottled water coolers have suffered from a downturn in demand in recent times. Leading manufacturers talk to Medina Bailey of Water Innovation and Cooler Innovation about their strategies for tackling the credit crunch, the key features of their latest offerings and the business advice they would be lost without.
- Hunt J Lee, Clover
- Federica Diotallevi, Cosmetal
- Thomas Liccioni, Mistral Constructeur
- Pete Benua and Florent Perrin, Oasis
- Jason Kim, Ovio Corporation
- Antonio Zerilli, Zerica.
How is the bottled cooler market currently faring?
Hunt J Lee: Firstly, the economic downturn has reduced the lower segments of the market, while competition is becoming tougher. As a result, we’ve experienced the bad times as much as other players, but there's light at the end of the tunnel and our orders are picking up. A noticeable trend that we're seeing is the market is transferring from bottled coolers to mains-fed coolers, which are becoming more prevalent worldwide. We're also seeing an increase in the demands on new bottled coolers in terms of energy efficiency, hygiene, decorative design and functions.
Federica Diotallevi: The bottled cooler market is currently facing tough competition, with the main threat being the mains-fed industry. However, in certain areas such as eastern Europe, traditional bottled coolers are still popular.
Thomas Liccioni: Mistral is manufacturing bottled water coolers of a high quality, with a high level of customisation. Therefore, even if the volumes are not as large as they used to be, we're glad to be continuing to offer this unique product as we have been doing for so long. In 2010, our FBF bottled water cooler will celebrate its 15th birthday.
Pete Benua/Florent Perrin: The bottled cooler market has slowed down over the last 15 months as a result of the international financial crisis and also the campaigns against bottled water and their impact on the environment. There have been a lot of small, positive signs over the last two months that the worst is behind us and that the market is recovering. Nevertheless, the growth of mains-fed coolers is higher than bottled coolers.
Jason Kim: People are increasingly concerned about the water they drink. The demand for clean and fresh water is rising year by year and therefore the market for bottled and mains-fed coolers is also increasing. The downfall of the economy has definitely affected almost every market, and the bottled cooler market is no exception. However, we’re hoping that the economy will improve and we're heavily focusing on our new products, which will be launched in 2010.
Antonio Zerilli: The continuing demand for eco-friendly products is slowing this market down. The use of plastic bottles and all of the operations that are involved in this kind of system are far removed from ecology.
How are you making the most of your opportunities?
Lee: Quite simply, we bring about opportunities through face to face meetings at exhibitions and trade shows. In fact, that’s where we meet most of our major customers. They're not only the most important part of our daily business, they also provide the most opportunities for meeting partners.
Luckily, Clover has a number of clients who remain extremely loyal to our coolers due to our reliability and quality when it comes to our service and our products. They always come and say to us, ‘Why don’t you have this on your coolers?’, and it never fails in giving us the chance to hit the market with something new and successful. Our loyal partners definitely provide us with new and creative opportunities.
Benua/Perrin: As a manufacturer, Oasis has an excellent reputation in the marketplace and has been offering coolers that are reliable, easy to maintain ?and long-lasting for years.
Diotallevi: By listening to customers’ needs and monitoring market trends to manufacture reliable, technologically advanced and innovative products.
Liccioni: Our coolers have a strong reputation and solid customer base which help to boost sales. We're always on the lookout for new trade by targeting prospective customers across Europe.
Kim: We always ensure that we're actively involved with all of the events held by organisations, such as EBWA and IBWA. We attended their conventions last year and took part in this year’s EBWA trade show and convention in Barcelona. We try to meet with potential buyers and hope that by meeting up in person we can become new business partners. We give and take to ensure that both parties can achieve a win-win situation.
Zerilli: Zerica still produces large numbers of bottled systems for customers who do not have a mains water connection. When possible, they ask for glass bottles that can be refilled with pure water.
Which is your best selling bottled cooler, and why do you think it's so popular?
Lee: Definitely the B14A. Hundreds of thousands of them have been distributed worldwide since 2006. The success of this cooler has been partly due to its reliability and unique user friendly design, but thanks should also go to our professional sales persons and customers who have contributed to expanding our market.
Diotallevi: The Avant because it is avant-garde in terms of hygiene, ergonomics, performance and design. That’s also the origin of its name.
Liccioni: We offer one unique model – the FBF – which is popular due to its efficiency, simplicity, quality and design.
Benua/Perrin: The removable reservoir (RR) range – B1RR, B1NR, B1TR, Rfx. It's a successful bottle cooler line as it offers a great design, longevity and ease of use. Its features include: removable water contact parts, inside out chilling for energy efficiency, a two-piece hot tank and high-quality cabinets. The RR range offers up to 20 different designs and colours, which all share the same spare parts.
Kim: Our bestselling bottled cooler is the FHC-6000 series because of its unique, simple design. This series also includes mains-fed coolers, and they're as popular as the bottled options. Customers tend to prefer this range due to the design of the coolers and the convenience that they provide when it comes to adjusting the temperature to the users’ desired level. The hot water power can also be turned off, providing a cook and cold cooler.
Zerilli: The Refresh B and Refresh Baby units both sell very well. We put their popularity down to the fact that they have been made by Zerica and therefore offer reliability, power and a secure warranty.
Do you think more innovation is needed in bottle design to keep up with the changing designs of the actual cooler?
Lee: Yes, we think more innovative bottle designs should be introduced in the near future. Current five-gallon PC bottles are notorious for placing physical demands on the end user. The new bottle designs should meet the high environmental standards for endocrine disruptors, as well as the governmental hygiene regulations issued by each country. They should also address storage and transportation costs and recycling issues.
Diotallevi: I think bottles should be functional and hygienic, rather than stylish.
Liccioni: We're convinced that in the more mature markets, there's room for new bottle designs and standards.
Benua/Perrin: No, not really.
Kim: There have been various designs and creations in bottle production, so I’m sure even more stylish and unique bottles will be introduced in the future. People are always on the lookout for new bottles to match their coolers. I just hope that the original bottles will still be around to match our FHC-6000 models!
Zerilli: Yes, particularly if they're constructed from plastic.
What does the future hold for bottled cooler manufacturing?
Lee: Unfortunately the market is driven by stiff price competition from a number of players from developing countries. To stay afloat, manufacturers need to keep listening to their customers, taking note of what they want and need. We believe that those who consistently listen to the market will stay alive in this game, while others will lose their way. Lastly, the purity and cleanliness of the water should be primary considerations when it comes to developing bottled coolers.
Clover is currently converting its corporate identity from ‘bottled water cooler maker’ to ‘total water cooler solution provider’ by launching Aquverse, a brand new mains-fed cooler with an innovative core system, which we introduced at the EBWA show. Through this machine, we strongly believe that we will become the leading company of the next generation mains-fed system coolers.
Diotallevi: The future holds lots of challenging opportunities. Perseverance, innovation and reliability will be key factors to success.
Liccioni: Competition is very tough on the entry level range with low margins for manufacturers and low service for the operators. Mistral’s position will continue to be to keep producing quality water coolers and after sales service. Design and technology are the only way to make a difference when it comes to the products.
Benua/Perrin: Probably a more competitive market with a very large emphasis placed on design, energy efficiency and reliability.
Kim: We're planning to expand our markets by the end of the year. We're currently investing in a manufacturing plant in Croatia. This should enable us to gain access to the European markets and introduce our products at a lower rate, rather than exporting them from Korea. This new project will triple our production rates and we are hoping to enter Europe with our high-quality range.
Zerilli: People are becoming increasingly more interested in environmentally friendly products, so this market is likely to shrink in the not so distant future.
What’s the best business advice you’ve ever been given?
Lee: Over the last 22 years that we've been in this business, there have been a number of players who have come and gone out of business. From our perspective, those who focused on narrow-sighted profit and failed to maintain high-quality service have disappeared. If you want to succeed in the water business, you must keep quality at the base of your business model and that’s how you’ll gain a good reputation with a view to the long-term in this water business, which is still growing.
Diotallevi: To learn from customers and understand their minds, their hearts and their lives, in order to make their lives easier and happier.
Liccioni: There's nothing more important than the customer.
Benua/Perrin: Always listen to your customers and keep your product as simple as possible.
Kim: That quality comes before the price. This is totally true and hopefully, from the buyer’s point of view, people will start to realise what this means sooner rather than later.
Zerilli: The other day I was reminded of why we're in this business when I received a call from a new customer saying that the units they’d received from us looked really good and had really strong features. He said: ‘It’s a Zerica!’ People who deal with us will understand what I mean – our best reward for being in this business is seeing our customers smile. You should never forget that.
Medina Bailey is deputy editor of Cooler Innovation magazine and editor of Water Innovation magazine.
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This article was first published
in Cooler Innovation.