April 15, 2011 — Beverage Business INSIGHTS — Some 15 mos into tenure of new ceo Jack Belsito, high-end import Voss Water is making money for first time and is ready to go back into capital markets for growth capital – sharp turnaround from situation as he came aboard, when co mainly had to go back to existing shareholders for money to scrape by. Net sales closed out 2010 up 30% and co is weeks from unveiling its first concerted effort to connect with consumers, via NY agency Addiction. Tho Jack wouldn’t disclose specific figures, co this year is believed to be within striking distance of pre-recession sales high in $30- 40-mil range, but this time on profitable basis.

During visit to co’s compact new hq offices near NY’s Penn Station – Belsito figures tight quarters reinforce his resolve to do most hiring out in field – ceo said Norwegian co has retained Sawaya Segalas, NY-based firm that’s repped such other cos as Sunny Delight Beverages Co, to help in capital raise. Belsito’s also called in his former Cadbury Schweppes and Dr Pepper Snapple colleague Joe Bayern as consultant on round; Joe’s been aboard nearly full-time since Feb, occasionally offering assist in other specialties such as supply chain issues. Amount to be raised is open-ended, as Norwegian co tests waters.

Belsito, who formerly ran Snapple and had made unsuccessful run at Trade Winds Iced Tea, which ended up with Nestle Waters, had come in as investor/ceo at time that bottled water sector was facing perfect storm of adversity, from green backlash to deep recession, which exacted particular toll on on-premise-oriented brands like Voss. Tho Jack lacked much experience either with hi-end brands or fine-dining world, he came in as seasoned retail hand, area where Voss and its youthful founder Ole Sandberg had stumbled. Co had employed such feeble attempts to avert channel conflicts as adding thin red stripe to off-premise packs. “Never committed to retail,” is all Jack will say about effort, praising now-exited founder for achievement in creating brand that’s held its own vs icons such as Fiji Water through most adverse circumstances.

Tho Snapple was sometimes known to run aggressive promos during his tenure, Belsito said he’s made it clear Voss will be positioned as superpremium product priced consistently above Fiji, Evian and Pellegrino, thereby providing solid margin for DSD partners. Instead of engaging in overcomplicated channel-mgmt strategies, co will lead with glass at retail, just as it does on-premise. To provide greater billboarding effect, it’s created 4-packs of 375-ml glass bottles and 6-packs of 330-ml PET bottles, with white background for core still line and black background for undermarketed sparkling line. Glass 4-packs go out at $7.99, occasionally promoted at $6.99. A 12-pack of 330-ml bottles has proved strong liquor store pack as well as staple at NY online retailer FreshDirect, which sells it for $15.99. Voss has been willing to accommodate prestige account Emirates airline with proprietary 250-ml bottle. Despite packaging additions, by harmonizing on- and off-premise packs Voss has been able to slash sku count by about half, yielding greater efficiency. It’s also focused on blocking and tackling – say by finding more efficient way to stack pallets to reduce shipping burden.

Belsito has retained most staff from earlier regime, using Fla-based Mark Zettle to augment retail presence and Patrick Larkin to work on-premise. He’s beefed up regional staff for both on- and off-premise, and counts former Snapple exec Bob Hoffman as key hire in re-establishing viability of brand with NIDA group of DSD houses in Northeast. He regards NY’s Manhattan Beer as strong partner in key metro, and goes thru such DSD houses in Southern Calif as Lenore, Straub and Energized. He’s sticking to plan of not hiring sr marketing exec: he’ll rely instead on agency Addiction. Under theme “Look deeper,” co will for first time move beyond food/bev “gatekeepers” in trade that it previously targeted, looking to engage consumers directly by extending some of on-premise themes to home-consumption occasion. It also continues to push hard to support African water initiatives undertaken by Voss Foundation run by exec dir Kara Gerson. And it will look to exploit opportunities as they present themselves – as with USA Today story this week that ranked Voss as enjoying greatest consumer loyalty. Former Snapple marketing chief Ken Gilbert, who created ruckus during agency recruitment process by announcing open call that drew 50 agency submissions, has ongoing role as consultant. His day job is focus-group operation, RazorFocus, he launched in Conn a few years ago.