The managing director of Highland Spring said a £10 million investment into its Perthshire operations will unlock its next phase of growth.
The company employs 350 staff at Blackford, where all Highland Spring branded products are produced.
Staffing numbers are increasing each year as UK consumers’ thirst for bottled water continues to grow, even when shoppers cut back on other grocery items in the cost-of-living crisis.
Simon Oldham, who became sole managing director of Highland Spring last summer, has outlined plans to double the size of the company in an exclusive interview with The Courier.
He said: “It wasn’t that long ago we were looking upwards and saying we want to be a 500 million litre and £100 million turnover business.
“We’ve now exceeded that. We’re rapidly chasing down £150m as our next threshold.
“The plan is to get to £200m no later than 2030. That’s achievable and I think we can get there sooner.
“In doing so, we want to have that number one brand in water volumes and sales.”
As he competes against brands owned by global multinationals like Coke and Nestle, Mr Oldham said one of the keys to becoming a bigger business was not to act like one.
“That will show us down,” he said. “Agility and speed and reactivity is an edge for us that we need to make sure that we continue to leverage.”
Investments in capacity
A new £10m investment into the Blackford site will increase capacity by 25%.
But crucially it will also allow the company to go into the flavoured water market. Earlier this year it launched three types of flavoured water in Tesco stores.
Mr Oldham said around 15% of water sales are flavoured water, but Highland Spring has never competed in this market before. The opportunity for growth is obvious, but it has required a significant up-front investment, he adds.
“It’s a big space for us to step into and we’re really excited by it,” he said.
“It’s an obvious next step in terms of where’s our growth and where’s our innovation come from.
“The £10m investment not only gives us the ability to produce flavoured water, but it also increases our overall capacity by about 25%.
“We’ve spent something in the region of £60m in the last eight years at this site. The intentions that we have as a management team is to continue to be a high growth business and you need to be investing up front.”
Natural product
“Bottled water” is not a term used within the corridors of Highland Spring. Internally it is referred to as “natural source water”.
The MD said comparing Highland Spring to tap water was like comparing instant coffee to one made to a barista.
Highland Spring’s water is extracted from the Ochil Hills through a series of boreholes which can be up to 150 metres deep.
This is the end of a process lasting an average of 15 years where rainwater seeps through layers sandstone and basalt rock, a natural filtration process.
Mr Oldham said: “We’ve got a team that ensures nothing goes on that land, no farming, no pesticides, keeping it as nature intended.
“We’re very mindful that we need to be guardians of the source and the water as well. We only extract around 3% of the rainfall.
“We see our product as something completely different from tap water.
“People trust our water and prefer the taste of it. If you go into a petrol station, it’s the healthiest drink you can buy and it has the lowest carbon footprint.
“It ticks every box – health, sustainability, convenience – and that’s why Highland Spring and the water category of drinks continues to prosper.”
Sustainability mission
Mr Oldham said the company has been one of the leaders in the marketplace for sustainability, announcing in 2018 that it was the first to use a bottle completely from recycled materials.
Two years ago it launched a rail freight facility at Blackford, at a cost of around £20m, which has taken around 8,000 heavy goods vehicle journeys off the roads. Around 500,000 litres leaves the Blackford site by rail six days a week.
“We’ve announced that we will be net zero by 2040, but the near-term target is to halve our emissions by 2030,” the managing director said.
“Another of our projects is a solar farm, which will be just on the other side of the A9. It’s a seven megawatt solar farm that will give us about 25% of our annual energy requirements.
“We are going to provide a charge hub for electric cars and provide free power to the primary school in Blackford. We would expect it to be up and running next year.
“And we’ve always been in favour of a well run and cost efficient deposit return scheme.
“The key for me is that there needs to be one system that goes around the UK. We have one supply chain, our retailers are across the UK. You can’t have different models in different parts of the country.
“At the minute, the outlier is Wales who still have a strong preference to include glass. That will cause huge cost complexity and will cause friction on what we want to become a frictionless plan.”
Highland Spring jobs
As well as the company’s growth ambitions and sustainability projects, Mr Oldham said another priority has been its people.
He said that growth of the sales of the business will inevitably lead to more workers being required.
“Will we need more staff? Almost certainly. We will continue to invest in this site and there is space for more development.
“We are continuing to grow and building market share in a category that shows no signs of stopping.
“Our provenance and our story about our catchment area and the fact we keep the land pure, that resonates with customers.
“And so as long as you are true to yourself and we’ve got a quality product, then people will continue to buy you.”
Highland Spring is owned by Mahdi Al-Tajir, one of the wealthiest people in Scotland.
The company started in 1979, with the first bottle produced in 1980.
The business owns another site in Lennoxtown as the result of an acquisition in 2010. There around 70 staff create supermarket own brand products.
A third site, in Wales, which produced flavoured water for supermarkets, was sold last year.
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