The Agthia Group, based in the United Arab Emirates, owns a trio of thriving businesses: Grand Mills, a pioneering flour milling and feed industry specialist in the Gulf region; Al Ain vegetables, one of the major players in canned and frozen vegetables; and Al Ain Mineral Water Co, which has cemented its position as one of the leading bottled water companies in the UAE, and a player which now holds the number one spot in the Emirate of Abu Dhabi.
Growth for the packaged water business is forecast to continue in 2009, albeit at a slower pace than last year. In 2008, Agthia’s packaged water business posted a 40% increase in sales and 30% growth in profit.
According to the company, the progress of Al Ain Mineral Water has mainly been driven by:
To what extent has a new brand identity and new-look label strengthened sales?
Fasahat Beg: The new brand identity and new-look label have contributed significantly to the growth of not only Al Ain Mineral Water sales but also to significant growth in overall consumer brand awareness. Our consumers and customers clearly attribute and associate the new identity with the strong tradition, heritage and high quality for which our brand name has been known for nearly 20 years. New consumers who were not previously aware of the brand have now been brought firmly into our franchise.
Have your advertising campaigns for Al Ain Water been successful?
Beg: Our advertising campaigns in 2007 and 2008 were extremely focused, with specific messages on first the quality and heritage of the Al Ain Mineral Water brand in the UAE, and secondly the health and wellness benefits of consuming water, as opposed to other liquid refreshment beverages (LRBs) in what is a very harsh, extreme climate. Given the high temperatures experienced in the UAE, particularly during the summer months, the need to continually rehydrate is of significant importance, with the healthiest beverage option clearly being water. Our key message was, ‘Have you had your eight glasses of water today?’.
Oasis and Zulal are established players in the HOD market. How does your business fare?
Beg: We’ve entered the HOD market, which accounts for approximately 60% of the UAE water market. It’s a growing segment and one in which we feel we can compete effectively given our strong, established brand position in the UAE bottled water segment. Our consumers have historically asked for a five-gallon option. We’re now pleased to offer a new Al Ain HOD format which effectively completes a product portfolio that also includes 10cl and 25cl cups, and 33cl, 50cl, 1.5-litre and 5-litre PET bottles.
In 2009, your company launched a range of flavoured waters. Can you tell us more?
Beg: As a part of our pursuit of constant innovation, we introduced Al Ain Flavored Water in the UAE market, which offers consumers a unique ‘dual flavour’ product with added vitamin C. We’re breaking realms of product innovation in our region and this latest offering is available in three flavours: apple & cherry, lemon & lime, and orange & passion fruit. Flavoured water represents 4% of the total bottled water category in the UAE and has been growing more than 80% over the last two years. Al Ain Flavoured Water provides a unique offering due to the ‘dual flavours’ and is low in calories, with five to seven calories per 50cl. Al Ain Flavoured Water is rich in vitamin C, providing 75% of the recommended dietary allowance (RDA), and offers a healthy lifestyle alternative to plain water.
We’re proud to introduce this product in the UAE and promote it as the region’s first low-calorie alternative. Al Ain Water is the largest selling water brand in Abu Dhabi and Al Ain, with more than 40% value market share, and this position will only get stronger from such a launch.
Is the Aqua Plus segment the next big thing for the region?
Beg: The level of water innovation in the UAE and broader GCC is clearly lagging behind North America and Europe, but consumers are becoming more knowledgeable about health and wellness issues for themselves and their families. New innovation opportunities will present themselves as these segments evolve, and we will look to continue with our delivery of consumer-relevant, water-based, innovative products in the future.
What is the best beverage to combat dehydration?
Beg: Dehydration is a key issue here in the UAE for adults and children. In our opinion, water is the healthiest option among all the available LRBs. As such, we continue to communicate the need to consume sufficient water during the day to combat dehydration.
Al Ain Mineral Water has posted strong revenues when excluding bulk water sales. How do you account for this?
Beg: Al Ain Mineral Water has a proven track record and emerged from a strong heritage. In our pursuit of constant product innovation, we continue to improve our standing in the market. We have been in the business since 1990, and today produce 35,000 PET cups and bottles of water per hour. As one of the leading bottled water manufacturers in the Middle East, our business has won local and international recognition with the award of several quality certificates, such as the HH Sheikh Khalifa Award for Industry and Quality.
We constantly look at innovative ways to keep ahead of consumer needs with world-class proven technologies, effective quality control and specially designed products. Our products have offered Al Ain’s unsurpassed seal of trust and wholesome values, conveniently distributed and accessibly priced.
Trading conditions could get particularly tough given the global economic downturn. How well positioned is Al Ain to stay on track for growth in 2009?
Beg: We continue to monitor the effects of the global economic downturn here in the UAE and GCC. We’re confident that Al Ain Mineral Water is well positioned to deliver against its 2009 growth targets. We have a great brand, an excellent, recognised, high-quality product, a solid business base with growing distribution and coverage in the UAE and the GCC markets, and new, innovative product offerings.
Al Ain has ventured into the production of an enhanced water drink, with added fluoride and calcium for children. What are your ambitions for the product?
Beg: The launch of Water+ is the result of comprehensive research with key nutritionists to bring out a special formulation. Conveniently packed in a 33cl PET bottle, the product is fortified with essential minerals that take into account the nutritional needs of growing children. Calcium is not only important to ensure proper bone growth, development and repair, it’s also a vital part of other processes, including assisting in the absorption of other minerals. Fluoride is especially important to children, along with calcium for strong teeth, proper enamel structure and healthy gums. More importantly, it encourages children to drink water throughout the day as a healthy alternative to other beverages.
Al Ain recently developed a campaign to promote PET recycling, and has sponsored the Al Ain Aerobatic Show. How important is this type of event sponsorship to the company?
Beg: Al Ain Mineral Water Company has been the gold sponsor for the Al Ain Aerobatic Show for two years. This is one of the most awaited shows across the UAE each year, and participation in such events indeed holds great significance for the company, especially when they take place on its home soil.
However, it’s important to note that the involvement wasn’t only limited to sponsorship. The company undertook the initiative of controlling the levels of PET waste emerging out of such large-scale events by installing a bottle-shrinking device at the shows. The Thermal Press device reduces the size of the PET bottle by 80-90%. Under this exciting environmental drive, all spectators were given a complimentary Al Ain water bottle upon entry to the show, which, if taken to the company’s ‘Shrink-a- Bottle’ booth for recycling, was exchanged for another bottle of water. More than 20,000 bottles of 50cl were distributed at the Air Show, of which 40-45% empty bottles were collected and shrunk at the venue.
Al Ain is also the exclusive water supplier to the annual Global Village event in Dubai and has supported events such as the Dubai Marathon, Ras Al Khaimah Half Marathon, Breast Cancer Awareness, Diabetes Awareness and the UAE Special Olympics.
What measures would you like to see to ensure meaningful recycling in the UAE and the region?
Beg: The volume of PET waste collected on an annual basis across the UAE is approximately 6,000-7,000 tonnes, and this eco-friendly approach will bring a significant decrease in the volume of PET waste across the UAE.
We’ve kick-started the ‘Shrink- A-Bottle’ campaign across 10 schools and The Hilton in Al Ain as a pilot test, and are looking towards extending it across the entire UAE by 2010. We would look forward to cooperation from various institutions and retail outlets and shopping malls in order to reduce the volume of PET waste across the UAE. Importantly, the number of drink bottles consumed at these locations adds greatly to the volume of PET waste.
Please tell us about your alliance with Capri-Sun.
Beg: Al Ain Mineral Water has entered into a strategic alliance with Germany-based Wild Group for the manufacture and distribution of its Capri-Sun juice in the UAE, Oman, Qatar, Kuwait and Bahrain. This marks a new journey for the company and we’re proud to be joining beverage giants such as Coca-Cola and Kraft, who have been manufacturing and distributing Capri-Sun in the UK, France and the US.
This marks another milestone for the Agthia Group, and we look forward to making this a successful partnership with the Wild Group. We see this partnership as the accelerator to our journey towards converting our business into a broader based beverage company.
Fashat Beg is general manager of Al Ain Mineral Water. His career spans more than 20 years of commercial experience with Pepsi international, RJ Reynolds Tobacco and Quaker Oats across markets in southeast Asia, the Middle East and eastern Europe.
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