Bottled water supplier Highland Spring Group (HSG) has signed up Lucozade Ribena Suntory (LRS) to distribute its products in the impulse and out of home channels.
Under the deal, LRS will take over distribution of the Highland Spring, Hydr8 and Speyside Glenlivet brands within wholesale, high street, foodservice and on-trade from 30 November. HSG will continue to sell them directly in the grocery channel, and will continue to handle its own-label business in-house.
HSG recently announced a £20m investment in its Perthshire manufacturing site, increasing bottling capacity by 50% over the next year. Chief executive Les Montgomery said the investment, together with the arrangement with LRS, would allow the business to grow its brands to a position where they could “lead the field” in the UK.
“The impulse and out of home channels are an essential part of our future strategy, and we have been considering several options to support our growth ambitions in these areas,” said Montgomery. “LRS has an extensive distribution network and field resource. Partnering with them enables us to provide increased and focused support to our trade customers and to jointly develop plans that drive bottled water category sales.
“Our investment strategy means we will have the capacity to support our business plan to elevate the HSG brands to lead the field in the UK. Outsourcing our impulse and out-of-home sales operation puts us in a prime position to achieve our targets.”
LRS chief operating officer Peter Harding said the deal helped establish his company as a “significant player” in the booming bottled water market. Category sales across still, sparkling and flavoured waters grew 12.2% last year, to £871.8m [IRI 52 w/e 3 January 2015]. Highland Spring is the number three brand in still and number two in sparkling, with total sales up 5.7% to £88.7m.
“We are always looking for innovative ways to build on our strong sales capability to drive a wider portfolio and also expand our existing customer relationships,” said Harding. “This distribution partnership is an example of that, helping to broaden our portfolio in an area of strength - the impulse and out of home categories.”