Watertown taps well of nostalgia

Like the Olympic hockey team, Watertowne is scooping up some of the best players in its business with the aim of going public.

The Globe and Mail
April 4, 2001

Watertown taps well of nostalgia
Bottled-water delivery water delivery firm uses turn-of-the-century image to capture growing market, Christie McLaren writes
Christie McLaren

CANMORE, ALTA. — Whenever Canada's Olympic hockey players hit the road or the rink in the next couple of years, bottled water will be at their sides, thanks to a deal between the Canadian Hockey Association and a small Prairie company.

Watertowne Bottling Co., of Airdrie, Alta., will supply about 60,000 litres of drinking water to CHA offices, national teams and hockey tournaments annually under a two-year deal.

It's the first time the hockey association has signed such a contract. "With the amount of time that the players spend travelling, we wanted to make sure they are hydrated on their flights," says Dale Ptycia, the CHA's manager of licensing and merchandising.

Like the Olympic hockey team, Watertowne is scooping up some of the best players in its business with the aim of going public.

The company is shooting for a major chunk of Canada's $500-million bottled-water market, which is growing at a rate of more than 10 per cent a year. It anticipates $6.5-million in sales this year, and "within five years we want to have $100-million in sales" as health-conscious baby boomers choose bottled water over tap, says Roy Lewis, the company's president and chief executive officer.

And like any savvy coach, the 33-year-old hopes to score with an old-fashioned work ethic and the latest in high-tech equipment.

Through 16 franchises in British Columbia, Alberta, Saskatchewan and Ontario, Watertowne sells purified water in five-gallon jugs to homes and businesses, and is starting to market half-litre bottles of what it calls "super-oxygenated" water, which advocates say enhances athletic prowress.

The company has targeted 25 more small and medium-sized water delivery companies across Canada for acquisition or conversion into franchises, he says. "If we can take a mom-and-pop operation, we can increase their bottom line and grow their business."

To do that, Watertowne has developed a new business model that aims to address what Mr. Lewis says are the four major weaknesses of small water-delivery franchises: zero marketing presence; franchisees who spend too much time on administration and overhead at the expense of customer service; a lack of capital and a lack of knowledge about the product they are selling.

Mr. Lewis started in the industry as a franchise owner for another company, but quit in 1996 to form The Original Water Club. Last year its name changed to Watertowne and a new marketing strategy was formed.

It plans to use a nostalgic, turn-of-the-century image that encompasses convenient monthly billing, seven-day-a-week customer service, and water deliveries made in person by the franchise owner — dressed in a uniform complete with suspenders and poor-boy cap.

It's aimed at overstressed baby boomers who are interested in fitness and health and want hassle-free service.

To shore up the image, prospective franchise owners undergo a careful screening process in which their commitment to their neighbourhood or community is as important as their financial stability.

A franchisee "must be someone who has lived in the community for at least three years," Mr. Lewis says. Ideally, he or she should be involved in local activities — as a minor-league coach or Cub leader, for instance.

The theory is that a community-oriented franchisee will be able to build the business more rapidly and give customers better service than someone hired for $10 an hour who has little long-term stake in either the business or the town.

For between $50,000 and $200,000, the franchisee gets a territory with a population base of roughly 50,000 to 80,000. Once his or her customer list grows to 600, a subfranchise will be created, Mr. Lewis said.

One Alberta customer who appreciates the personal service is Cathy Snelgrove, a retail worker and mother of two young children in Airdrie who has been buying the company's water for four years.

Every 28 days, Murray MacFarlane, the local Watertowne franchise owner, turns up at the Snelgrove house, dispensing conversational chit-chat as he replaces the family's monthly supply.

She likes Watertowne's payment method (an automatic monthly debit of $33.95 from her account) and its prompt service.

Franchisees have the time to concentrate on service because all ordering, customer billing, banking and accounting are done through Watertowne's centralized administration office in Airdrie. Calls from customers are e-mailed to the franchise owner, who then fulfills the order — in person — as soon as possible. The franchisee's compensation is based on sales volume and number of customers.

Franchisees and customers will be given detailed product information, Mr. Lewis says. Watertowne sells ordinary water — from wells, springs or the tap – that has undergone a six-step purification process.

Ms. Snelgrove, meanwhile, says Watertowne's water cooler has become a necessity in her kitchen, not a luxury. If finances ever forced her to cut back on household items, she adds, "it would be one of the last things I would give up."

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