At the time I was a stockbroker and my parents were running a restaurant that after a few good years wasn't doing so well. My father was supplementing his income as a salesman for a domestic water-filter company. Being in the restaurant trade, he spotted a gap in the market and we developed the first table water bottling system which served still and sparkling water to a small Indian restaurant in Wembley. My father ran the sales, I ran the operations and my mother ran the accounts department.
What do your machines actually do to the tap water?
Mains water is high quality but it can sometimes have a taste and odour of chlorine. Our systems use a 0.2 micron carbon membrane filter to remove impurities from water, including 99.9% of all known water-borne pathogenic bacteria, without reducing its natural mineral content. We then chill and carbonate the water and provide our clients with reusable glass bottles which they fill and clean in-house.
You initially had to overcome a lot of scepticism. How confident were you that it would eventually be a success?
I never predicted the scepticism we received at the start, which was not helped by the Peckham Spring scene in Only Fools and Horses. Some sectors of the media accused us of being eco-conmen but we were confident that it would one day be a success, although it did take nearly 10 years to make a real impact.
How has the company evolved from those early days?
At the start, we primarily supplied the restaurant and hospitality sector. Business growth was steady but slow. Within a few years we'd already spawned a number of competitors who undercut us on price but provided a shoddy service.
The big break came in 1995 when Vivreau made its first major corporate sale. It was a sale that nearly cost us the business. We had sold £25,000 worth of equipment to Barings Brothers and thankfully received payment just before they went bust. It would have been the end of Vivreau if we'd not been paid then. Now we offer a much wider range of products and employ over 40 staff.
The Vivreau Bottler wins us the most business. Having said that, we often get enquiries about the Bottler and end up selling the customer a whole range of water systems. There are so many different combinations and we also create bespoke machines for many customers.
You work with an impressive list of FTSE 100 companies. How did you come to target large organisations?
Our primary focus in the 1990s was the catering and hospitality trade. However, our cheaper rivals were targeting this lucrative sector but were offering a poor quality system with a shoddy service. We made a decision to distance ourselves from our competitors and took the opportunity to target the major corporates. Nowadays our business is split between corporate and hospitality.
How much has the environmental angle contributed to your success and to what extent did the BBC Panorama programme in 2008 help with that?
The Panorama programme, along with projects such as the Evening Standard's "water on tap" campaign and pronouncements from government ministers about bottled water, created a broader consumer awareness of the environmental impact of water. Whereas previously we might be approached by facilities managers, nowadays an enquiry is as likely to be generated by a company director keen to improve the firm's green credentials.
This year we launched the Vivreau Bottler Mark 3 which has a 15% increase in chilled water throughput at the same time as using 25% less power compared to the previous model. Our latest machine uses half the amount of energy when operating at full power compared to our leading competitors.
How important has the cost angle become over the past year?
In the current economic climate, customers are increasingly motivated by the economic benefits of ditching mineral water. A few years ago big companies were more motivated by reducing their carbon footprint than the cost savings. However, in a climate of recession, a typical saving of £25,000 on mineral water can mean making one less redundancy.
What did the business turn over last year, and what do you hope to achieve this year?
Last year Vivreau turned over £4m. This year I expect to see an increase of 20% as we've developed new routes to market and several new products. We're soon to launch b.blu which will revolutionise the way people drink on the move. It's a new type of vending machine which fills plastic pouches with chilled Vivreau water on demand and offers a pouch-recycling facility alongside.
You've also just expanded into the US. Why that market in particular and what are your aims over there?
Early last year, over a two-month period, I had several unrelated enquiries from top Fortune 500 companies in the US asking us to supply them. So I jumped on a plane to New York and on every street I saw many of my UK clients but instead of 10-storey buildings they were occupying 40.
It's like a return to 1989 for me. I'm selling a new concept to US businesses during a period of recession, not dissimilar to the late 1980s. My strategy is to start out by focusing on the Bottler so we establish a brand and reputation for that product.
‘The big break came in 1995 when Vivreau made its first major corporate sale. It was a sale that nearly cost us the business. We had sold £25,000 worth of equipment to Barings Brothers and thankfully received payment just before they went bust'
How much of a challenge has expanding overseas been for you?
The main challenge is covering the vast geography of the US. Vivreau already has customers in New York State, Connecticut, Washington and Texas and it's essential we provide a network of engineers for installation and service. One of our earliest clients introduced me to a great engineering company that has a network in most states, which has made our expansion plans a lot less stressful. Another huge challenge is converting US businesses away from mineral water. Fortunately the cost-savings are convincing them just as much as the green benefits at the moment.
What are your plans for the future of the business? Where would you like it to be in, say, five years' time?
I want to continue growing the business steadily and expand into new territories. I am under no pressure from others to go for broke, having no investors or shareholders. We are exploring a number of very exciting opportunities for our planned expansion in Europe and the Middle East and hope to make some announcements shortly. I hope that in five years' time you'll be able to see a b.blu water machine in public places in every major city in the UK.
Did you always think you would run your own business?
Not really. I left school at 16 and worked in the City. I realised that you could either settle into a nine-to-five job or have no work-life balance and there were few options in between. It's when I started working with my father that I realised I couldn't work for anyone else. Vivreau has always thrived on being a family business. My mum is still the finance director. Sadly my father passed away in 1999 but his memory still lives on, not just on a personal level but very much in the business. He was a true entrepreneur, always coming up with ideas, and would be immensely proud of where Vivreau is today.
What have you found the hardest aspect of running your own company?
I find it hard to switch off from my business. My family is the most important thing to me but the business also demands a lot of my attention. Luckily I have a fantastic management team so I can go away for a few weeks and entrust the company to them, although I still haven't worked out how to switch off my BlackBerry!
What advice would you have for other entrepreneurs in the current climate?
Look for something that the multiples are not doing as there's always room for an independent company selling a niche product with good service. If you have an idea that you believe in then try it. It will be harder to raise capital in the current market but we managed to build up Vivreau from manufacturing one machine and selling it to raise enough money to make the next one. It may not be the quickest way to grow but it can make for longevity.
Are there any more ventures on the way?
The major new venture is the b.blu machine. While we're keen for consumers to reduce the packaging waste generated by water consumption, it's not always possible to refill an old bottle when you are out and about. The beauty of the b.blu pouches is that they are lightweight and recyclable. We'll be providing b.green recycling machines which will take back used pouches and provide a credit towards the next purchase of b.blu water. We will also be launching the b.liv range of healthy flavoured drinks.
Extract from full interview conducted by Nick Martindale for New Business magazine
