It’s a blustery January in London’s Mayfair district. Eden Springs Europe CEO Raanan Zilberman has just stepped off a plane from Geneva, Switzerland, where Eden’s European headquarters is based, for a few days of business meetings.
Zilberman comes across as a courteous and interesting man, full of stories and anecdotes, and with an undoubted passion for his role, as well as for life itself. He has held the CEO position at Eden Springs Europe for seven years, during which the company has grown its profitability to a record of nearly €50m (of Ebitda) and has made an almost unprecedented 60 acquisitions to position it as the category leader by size, footprint and offering.
Zilberman has personally played a major role in the entire process.
Eden Springs was founded in 1998, launched on the premise that while Europeans were consuming a vast amount of mineral water, the penetration of water coolers in the commercial and residential sectors stood at less than 1%. Compared to other markets such as the US and the Far East, this was very low.
Starting out as a Home and Office Delivery (HOD) bottled water cooler business, the company grew rapidly via a series of greenfield developments and strategic acquisitions. By 2003, Eden Springs Europe was in a position to strike a joint venture deal with Group Danone. This lasted until 2007, at which point Eden Springs bought out the Danone share and brought in a private equity investment instead.
Now operating in 16 countries, with more than 2,000 employees and 600,000 business customers, Eden Springs Europe is a force to be reckoned with in the water cooler industry.
Marketed as a ‘complete workplace hydration solutions provider’, it’s not only big in bottled water coolers but also has a substantial share of the mains-fed water cooler market, as well as a successful small-pack mineral water business. Eden Springs is also taking a keen interest in the coffee market, with recent acquisitions in the UK, Netherlands, Spain and the Nordics … but more about coffee later.
I’m keen to know how Zilberman coordinates and manages the differences between companies across different countries.
“Managing an international company is fascinating in many ways,” he says. “Let’s start with the notion that it’s hard to manage different cultures within the same business. I have managed five different multinational companies over four continents, and I’m not sure if I agree with that. I think people from all over the world are the same. When they meet, they talk about family life, pastimes and experiences. People will always appreciate when you listen to them, offer support and encouragement, and recognise when they’re doing well. You just have to treat people right and they’ll be happy to work together.
“The challenge lies in taking a group that comprises greenfield sites and several acquired companies with different brands, management styles and ways of doing business and you want them all to pull together to reach the same target – the agreed ‘pole star’.
“One example of sharing best practice inside Eden is our unique platform for acquisition that we’ve named ’90:90′. In 90 days, we normally bring 90% of the marginal contribution we have planned for the new target. Together, after years of practice and endless workshops, we’ve learned to respect the advanced detailed planning together with the precise implementation, and above all we believe that the key success factor is the ‘speed of execution’.”
There does appear to be a good balance between work and play among the top management who meet around four times a year for both. From skiing trips and night sledging to mock ‘Eurovision song contests’, this is a company that not only knows how to enjoy itself but is adept at helping its team bond and work better together.
“We believe that we need to come to work as we come to play: with a lot of energy and a big smile,” says Zilberman. “These meetings are vital to share external and internal know-how and best practice. After a few days, we reach consensus about projects and challenges such as customer retention, operational excellence, new product lines and strategies.”
So, are there any particular countries within Eden Springs showing good growth?
“It comes in cycles,” says Zilberman. “One of the things you learn in business is that forecast is always difficult, especially for the future. Even the most robust businesses can collapse like a house of cards. Just look at the solid banks and legendary industries that were knocked down over the last few years in Europe and the US. I’ve seen this in business life in many different industries. Leading a company is like piloting a fighter jet: extreme weather conditions or taking your eyes off the target can lead to vertigo. Or worse, a crash!
“I would say our business is in great shape in Eastern Europe, France, Switzerland and the Baltics, while the markets in Spain and the UK are proving more challenging.”
He believes France is weathering the storm mainly because the need for water services in the business sector is bolstered by strong regulation from the unions. Spain’s economy, however, is very weak, with high unemployment, while the UK is suffering the double effect of a shrinking economy and public sector cuts.
There’s also a good deal of saturation and development of the mains-fed water cooler market.
“But the UK and Spain were once very strong markets and I am convinced that this is a cycle that will change over time,” he says. “People will always need to drink water at work and we will always be there to provide it.
There is no doubt that Eden’s acquisition trail in water coolers will continue, but lately the company has taken a new direction, hoping to make a go of it in the multi-billion-dollar coffee market.
The last two acquisitions that Eden has made have been in coffee (Shakespeare in the UK and Kaffen en Klar in the Netherlands). There are obvious synergies between coffee and office water systems.
“If we talk about strategy and the way to add value, our industry is in a growth mode,” says Zilberman. “We’ve already made the move to offering total water solutions, but it looks like it may not be enough. With our strong competencies in customer service and handling major accounts, we see coffee as the next key area to move into.”
Eden Springs is a major partner of well-known coffee brand Lavazza, and is one of its biggest distributors. In Luxembourg and Switzerland, it has also just launched its own coffee brand, ‘Edenissimo’, which will be rolled out into more markets in early 2012.
A rebranding process now sees the company labelled as ‘Eden – The Water and Coffee Company’, proof that this is a serious target and a clear message.
“People will always drink water and coffee, so we need to make sure we’re there to provide it,” he says. “The industry will continue to evolve. While the HOD market in the countries in which we operate is worth around €600m, the coffee industry is at least five times bigger. This is the good news. The bad news is that it’s a much more complicated business that requires know-how and capital to cope with the entrance barriers of the different coffee types and tastes consumed in different countries, as well as the challenges of service and logistics.
“Our coffee activity is already exceeding 10% of our turnover and my vision is that, in a few years’ time, it will become bigger than our water activity. We certainly would like to be the biggest drinking solution provider to European offices.”
Almost all countries in the group have now begun activity around coffee, but there are further acquisitions under way in the Nordics, France and the Baltics, as well as major activity in Israel.
Zilberman believes future growth lies in a three-pronged approach. Firstly, the company will concentrate on growing its existing 600,000 commercial/offices customer base. It will also look at bringing new services to its customers, with coffee perhaps not the last new area to target. Finally, Eden will continue to “search for the key to unlock the door of the residential sector”.
“We’re trying to do all three, from region to region,” says Zilberman. “If there’s more potential in one particular country to penetrate the home market, we’ll go for it. The home market is really the holy grail of the water cooler industry; the $1bn question that we will keep on exploring.
“For the home market, we need a very competitive, cost-effective service with compact and attractive designs. It will most likely be highly multi-functional. It requires a huge marketing push and massive multimedia campaigns to reach the consumer market.”
While the bulk of Eden Springs Europe’s business still lies in bottled water cooler delivery, they’re now able to offer a full mains-fed range to customers who require it. Yet, Zilberman concedes there’s a problem with generating decent revenue in the mains-fed market.
“Although this sector is growing, it’s not generating the same value as the HOD business has in the past,” he says. “We will continue to grow both and I hope at a certain point rationalisation will show up and some of the competition that’s driving prices down will slow and we will see better service and margins.”
Zilberman is evidently still enjoying his role at Eden Springs Europe a great deal: “I enjoy every single moment,” he smiles. “I work with an amazing group of managers. I love them all. I would characterise Eden as highly entrepreneurial: we know how to start from zero and we know how to consolidate markets. I can’t think of many companies that combine a start-up spirit with the skills of an acquisition machine.
“We’re now at the forefront of strategic development. We’ve shown this with our coffee development and we have a few other things in the pipeline within office services.”
Eden is also currently investing millions of euros in its very own research & development resources, with a multifunctional product in the pipeline, probably due for release in 2012.
“The industry now needs new products, new services and new functionality,” he adds.
Zilberman’s dream is to take Eden Springs Europe to the next level and identify and implement the next new business units into the company. He hints that there would also be new countries joining the company.
“Over the last few years, we’ve built a tremendous service platform with presence in many European offices. Our service DNA, the sales channels we’ve developed, our operational excellence as well as our ability to consolidate fragmented markets, can be leveraged into new areas.”
Whatever his vision for the company, I leave our meeting in no doubt that he will achieve it.
Hannah is editor of Cooler Innovation magazine
© FoodBev Media Ltd 2019
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