With bottled water sales in decline, that could be a challenge. And when the plant does sell, don’t to expect to find Anniston-made bottles of water in the cooler at your local store -- at least not immediately.
“I think a new owner would probably take the business back to its core product,” said Fred Cross, a partner in the Maryland-based Equity Partners, which is marketing the property to prospective buyers. “The niche for this busi-nesss is the five-gallon container, sold in supermarkets. From there, they’d probably grow slowly to other products.”
Coldwater Springs, formerly known as Southern Bottled Water Inc., announced Tuesday that it was seeking a buyer for its bottling plant on West 15th Street, which was closed in February after the company’s growing product line fell victim to a shrinking economy. At its peak in 2005, Southern Bottled Water did $7 million in annual business and employed more than 50 people.
“The industry just changed so quickly,” said Sherri Sumners, president of the Calhoun County Chamber of Commerce. “Public tastes are fickle. Bottled water was very, very hot for some time, and then suddenly, opinions changed.”
Changing tastes were a problem, and changing flavors were too. Cross said the company jumped wholeheartedly into the recent trend toward offering “blended water” products that come in a variety of flavors. The company grew too far, too fast, he said.
The Anniston plant is still a great find, Cross said, for a company looking to start with the industry’s basic product – the five-gallon container – and expand carefully.
“In the area within 100 miles of Anniston, there’s a market there that isn’t being served,” he said. “It’s a good opportunity.”
But the company has not set an asking price, preferring to take offers and see what the market will bear.
Bottled water sales dropped 2.5 percent in 2009, according to the International Bottled Water Association, the industry’s trade association.
“The economy has adversely impacted a lot of bottled water producers,” said Tom Lauria, vice president of communications for the group.
Lauria tries to keep it upbeat, noting that bottled water has hung on to its market share. In other words, when people buy bottled drinks, they still choose bottled water about 29 percent of the time. They just aren’t buying any sort of bottled drink as often as they did a year or two ago.
Lauria says that in spite of the decline in sales, it’s not necessarily a bad time to sell a bottled water plant.
“There’s been a slow but steady industry consolidation,” he said. “Larger companies are buying smaller sources.”
What makes a bottled water plant attractive to a buyer? If you can manufacture your own plastic bottles and have quick access to a freshwater spring, Lauria said, your plant is a good prospect. It doesn’t hurt, Lauria said, to have a respected brand name that the new owner can use.
Based on that analysis, Coldwater Springs may be in a good position. The company “blew” its own bottles at the 15th Street plant, and according to Cross, the water is indeed spring water.
Even though the plant bought its water from the Anniston Water Works and Sewer Board, Cross said, it drew that water directly from Coldwater Spring – the same spring that is the source of Anniston tap water. Cross said the company did its own water purification at the 15th Street site.
Because the plant shut down in February, the company lacks one important thing: a set of distribution agreements with retailers. So you can expect larger companies, with their own distribution networks, to show an interest in the plant, Cross said.
Cross claims that with the right leadership, the plant could be back up to its past $7 million, 50-plus-employee level of operation within a year.
But that’s not a promise. Just a promising possibility.
“You need to take baby steps before you take big steps,” Cross said.
Contact Assistant Metro Editor Tim Lockette at 256-235-3560.