Client Profile: Highland Spring
Sally StanleyThe spacious Highland Spring boardroom overlooks the foot of the Grampian Mountains, the nearby Gleneagles Hotel lies hidden just behind the immediate horizon of lush evergreens – an idyllic setting for a company that plays so heavily on its provenance.
Sally Stanley, Highland Spring’s marketing director, arrives in the room, folders and files tucked under her arm. No doubt not for the first time, she agrees with my observations on the stunning surroundings and offers tea, coffee, or (of course) a mineral water...
The serenity of the scene depicted through the floor-to-ceiling boardroom window is, perhaps, a little misleading. The adjacent bottling plant is flat-out, working to stock up on supplies for the busy summer period approaching, when demand outstrips supply.
Just next-door, behind the faÃ§ade of a huge steel shed, thousands of plastic bottles hurtle past, like crazed kids riding a never-ending roller-coaster. At its peak, the site can produce over 90,000 bottles an hour. Almost a million bottles a day. Over gantries and under heavily laden conveyor belts whiz the bottles in various stages of undress, making their way to the beginning of their journey – the plant’s storage warehouse, where they rest patently, waiting to be distributed around the country and further afield.
However, it’s not just the production line that’s busy. Stanley is in the midst of overseeing the rollout of Highland Spring’s first ever UK-wide TV advertising campaign, which broke last month.
Back in the boardroom, despite the sunny weather, she’s sipping at a cup of tea.
Highland Spring’s stock is rising. It is now the UK’s number one sparkling water brand. “By far,” says Stanley. But, sparkling only accounts for 13 percent of the overall bottled water market. Eighty-seven percent of the market is occupied by still.
“We are a nudge – just 0.1 percent – behind Volvic in the still water market,” says Stanley. “Evian is leading the market with around ten percent of the share, with Volvic on 7.5 and Highland Spring on 7.4 percent. Danone, one of the biggest global food manufacturers, is above us in the UK with Avian and Volvic. Underneath us is Nestle, with Vittel and Buxton. So, Highland Spring – a small Scottish company with meagre resources,” she laughs, “is sandwiched between two massive, global brands. We do about one million bottles a day at the plant. That works out at over a quarter of a billion litres a year.“
Highland Spring’s rise to prominence has been about more than just demand, however, with the relatively recent change in lifestyle trends leading to a new focus on all things convenient and, more importantly, all things healthy. “People’s lifestyle dictate how they feed themselves and rehydrate themselves,” continues Stanley. “As well as consumers being constantly on the move, there is an overwhelming leap towards healthier lifestyles which, in its own right, plays a massive part in the growth of bottled water. However, the availability of bottled water is another aspect that drives sales. There has been a massive expansion in the channels to market. And from Highland Spring’s point of view, we have the most complex channel mix of all our competitors.
“We are the number one supplier of water on the doorstep via dairies in the UK. Although that’s only a tiny, tiny part of our overall business, it’s a channel that most people wouldn’t actually equate with water sales, but it’s indicative of our approach to leveraging as much as we can through different channels.
“We supply the on-trade, schools, the public sector, the leisure sector – every which way you look, we are looking to exploit areas of growth.”
Highland Spring was the first water company to look into the kids market, launching a kids range in 2001, a market that is now worth around 12 million litres a year.
“There are so many factors driving the market,” continues Stanley. “And success begets success. You can actually see people making choices, moving away from carbonates into healthier options. We are in a brilliant position from a brand point of view because we only – and this is a strategy that is intentional – supply pure, natural, unflavoured water. Until there comes a time when we can deliver a Highland Spring flavoured water that had an organic flavoured base, and nothing else added to it, we won’t do that.
“The whole brand strategy behind Highland Spring is about its purity and naturalness.
“From a marketing perspective, in the instance of bottled waters – purity is almost the marketing nirvana. The closer you can get to claiming purity, from a brand point of view, the better. Highland Spring works very hard on that aspect of delivery – making sure that there is nothing in the land, being absolutely focussed on water quality and the fact that the land is organic [certified by the Soil Association in 2001] is a big USP for Highland Spring.”
Highland Spring’s focus on delivering the “purest, most natural” mineral water is helped by its inherent Scottishness.
“We frequently researches what consumers feel about provenance, whether it matters,” says Stanley. “If you look at the water produced in the UK, the majority of it is Scottish – and sold that way. Every time we have researched this, the statistics always come out massively in favour of Scotland being seen as the home to the purest, most natural water. That’s why the marketing strategy for Highland Spring does focus on provenance. Our competitors might not be focussing on provenance as their key platform, from a brand strategy point of view. But we are. That is why Highland Spring is what it is.”
For the first time, Highland Spring has launched a UK-wide TV advertising push, following successful trial campaigns in both Scotland and London. Now, says Stanley, the time is right to expand the push.
“As a region, according to TGI, London has by far the highest proportion of bottled water drinkers in proportion to the population. Surprisingly enough, Scotland is second... Our brand share in Scotland is massive. It’s the number one water brand. And currently, Highland Spring is the number two in London.
“So, the reason for expanding the advertising campaign is, without forgetting our key centres, that we want to take the Highland Spring brand into the other regions as far as we can. We want to increase our brand awareness.
“We have changed our targeting methodology over the years from a media buying point of view and a marketing point of view. This year we are focussing on two audiences. We are looking at Highland Spring loyalists as well as ‘less-often-users’ of Highland Spring as well as ‘less-often-users’ of our main competitor brands, to increase our conversion rates.”
“In the new campaign we have tried to focus more prominently on promoting our organic land credentials, as it’s unique to Highland Spring. There has been a massive move towards eating natural, finding out where your food and drink products derive from, finding out about the company that makes them and what they put in it... The Henley Centre has labelled it ‘authenti-seekers’. People that are after authenticity in their products.
“We have been running an education programme on communicating the benefits of different water types. What matters is who makes it, where it comes from and that it’s as natural as it can be. So, you don’t need to spend a great deal of time and effort beyond that.”
“The main thing for us is that the campaign works. In terms of our marketing expenditure, compared to the competition, we are spending less than our key competitor brands from an overall media point of view. So, we’ve got to make sure that whatever we spend works really, really hard for us.
“We track our advertising and try to understand what’s working and what’s not working. It communicates that Highland Spring is a part of the Scottish landscape – a truism. We have developed the copy a bit to incorporate the ‘Reassuringly Pure’ sign-off, which, again, is what it’s all about.
“From the brand point of view we are concentrating on TV and consumer press, but we also have a number of long-term marketing partnerships – and for us that’s a really important part of our marketing strategy as it gives us more bang for our buck. It allows us to extend our marketing campaign.”
Highland Spring is a long-term supporter of Connoisseur Scotland, which covers Scotland’s top hotels and Breast Cancer Care, through which Stanley completed the New York marathon last year – the team raising well over quarter of a million pounds for the charity.
Elsewhere the water company is heavily involved in sports sponsorship covering rugby – Glasgow, Saracens, Sale and Wasps teams as well as grass roots level in Scotland; snooker; golf; and running events.
“Most sporting events need a water supplier, so we tend to run around the parish and mop up as many of the ‘official natural mineral water supplier’ deals as we can pull together,” adds Stanley. “We spend time with people, working with them. We just aren’t the type of company that writes a cheque and walks away. Relationships are built up over a number of years.”
This year is the fourth year of Highland Spring’s joint campaign on the London Underground with Visitscotland.
“As far as long-term partnerships, I don’t think that we could find a better fit,” says Stanley. “Visitscotland see Highland Spring almost as a view in the landscape – through the looking glass into Scotland. Both parties are looking to achieve different things, but both are achieving them.”
Stanley joined Highland Spring in 2002 – four years this summer. Before that she was at ScottishPower for five years, joining from McCann Erickson where she did a stint as an account director. Prior to that she spent six years at the Scottish Milk Marketing Board and also spent time at STV and the Garden Festival.
“I’ve been really lucky, I’ve managed to develop a career in marketing in Scotland, but always with major companies that gave me a great opportunity from a marketing development point of view.
“Highland Spring is a very different business to many of Scotland’s top companies. We’ve got a very tight team. It’s a bit like the product – what you see’s what you get. It means that we can work quicker than some of our competitors. When opportunities come up, if we have the inclination, then we can take them.”
Highland Spring takes its Scottishness seriously, however that has not been the driving factor in appointing a host of Scottish agencies to its high-profile business, says Stanley.
“We use a lot of different agencies for a lot of different things [including Merle for advertising, 999 for design and Spirit for media]. The agencies we work with are the best, from our point of view. From a Highland Spring point of view, being the best, is about knowing Scotland well. From a creative development position, if you don’t know Scotland, then it wouldn’t work.”
Ã¯ London is the most important region for bottled water as 65% of the population drink bottled water. In London, 20% of the population live there, yet it accounts for nearly 25% of all UK bottled water sales. After London, Scotland has the highest penetration with 54% of consumers drinking bottled water.
Ã¯ Forty two per cent of the bottled water drinkers in Scotland drink Highland Spring, making it the Number 1 brand in Scotland.
Ã¯ The total bottled water market grew by 5.3% in 2005 to 2.17bn litres.
Ã¯ Highland Spring emerged as the fastest growing top-five bottled water brand in the UK, up 12.2% compared with the market growth of 5.3%.
Ã¯ As a result, Highland Spring’s brand share increased from 6.9% in 2004 to 7.4% in 2005, virtually closing the gap on Volvic (7.5% brand share). Evian now sits at 10% brand share, Buxton at 3% and Vittel at 2.8%.
Ã¯ Highland Spring Ltd recorded volume sales of 255 million litres in 2005 (total volume including own label), sustaining its position as the leading UK bottled water producer and increasing company share of water bottled by UK producers to 15.4% in 2005. Total UK production is 1.66 billion litres, 75% of the total market.