Three springs in Eastern Carpathians bring 100m euros into Coca-Cola's accounts

In 2002, when it paid Jean Valvis 40m euros for Dorna mineral waters, US giant Coca-Cola made a major step on the only market segment it did not have in its portfolio. Dorna Apemin added the three mineral waters that Coca-Cola still owns, Dorna, Poiana Negri and Izvorul Alb, to the group’s portfolio.

Six years on, Coca-Cola is still the only multinational battling Borsec (Romaqua) and Izvorul Minunilor (European Drinks) domestic brands on a market of above 300m euros and annual consumption of 60 litres per capita.

Coca-Cola does not provide data on the weight of mineral water sales in its domestic business, but production data from the National Mineral Water Company (SNAM) point to turnover of around 100m euros for the company from the three mineral waters.

Thus, during January-April 2009 period, Coca-Cola produced, through Dorna Apemin, 49.3 million litres, down 8% from 2008, according to the SNAM data, and Dorna Apemin last year bottled 141 million litres.

On a market put at one billion litres, the market share of Romaqua, the biggest player, revolves around 33%, meaning that mineral waters bring the company around 100m euros, according to ZF estimates. According to Coca-Cola officials, Dorna Apemin sales are similar with those of Romaqua, meaning that mineral waters bring the only multinational on this market 100m euros.

In 2008, Coca-Cola HBC Romania posted income worth around 66m euros, up 19% year-on-year, while turnover rose to around 552m euros. Given that mineral water sales brought the group around 100m euros in 2008, mineral water operations can be said to account for around 18% in Coca-Cola’s turnover. Keeping the same proportion in the case of profit, mineral waters could be “responsible” for income of around 12m euros per annum, according to ZF estimates.

Coca-Cola officials say they have invested 60m euros in the mineral water business located in the Eastern Carpathians since 2003.