Nestlé swallows Powwow water

Nestlé paid a hefty €560 million for Powwow Keystone Archive

Nestlé has expanded its bottled-water empire by taking over the Powwow group, which provides water for home and office coolers.

The deal seals the Swiss company’s position as a leader in the bottled-water market.

Powwow, which is primarily active in Europe, was the water business of Hong-Kong based conglomerate, Hutchison Whampoa.

Nestlé’s bottled-water division, Nestlé Waters, said that the acquisition was in line with the company’s strategy to expand in Europe within the home and office delivery (HOD) segment.

Nestlé Waters’ CEO, Frits van Dijk, said: “The addition of the Powwow network to our existing operations in Europe is a key element to forming a truly pan-European presence in HOD.”

The division is already successful within this segment in North America and the new brand will increase Nestlé’s penetration of the European market.

High price?

But increasing Nestlé’s domination in bottled waters comes with a large price-tag: it paid approximately €560 million (SFr754 million) for Powwow.

Some might argue that paying four times the value of Powwow’s previous year’s turnover was an expensive move.

But the business of delivering water to homes and offices is a fast-growing one and Nestlé predicts that the sector will grow by 15 to 20 per cent this year alone and will double in size in five years’ time.

Meteoric rise

From starting its HOD business in Europe in 1998, Powwow has grown into a multimillion-euro business in just over four years.

With activities spread across France, Germany, the Netherlands, the United Kingdom, Denmark, Italy and Portugal, Powwow’s turnover last year was nearly €120 million.

Big fish

Nestlé is already one of four companies that are said to control 30 per cent of the global bottled water market, alongside Danone, Coca-Cola Co and PepsiCo.

The Vevey-based giant made over €5 billion from its bottled-water activities in 2001.

The Powwow brand joins an aqueous portfolio that includes household names such as Perrier, S. Pellegrino and Vittel.

Given the size of the Powwow acquisition, the deal is expected to attract the attention of the regulatory authorities.

swissinfo, Faryal Mirza