Harrogate Spring Water - multi-national takeover is 'good for town'

Interview: The news that one of Harrogate’s leading independent brands was being taken over by an international food and drink giant may have come as a shock to the town.

Monday, 9th March 2020, 3:20 pm
Managing director of Harrogate Spring Water: James Cain: Naturally-sourced water is subject hugely to regulation. We are all about Harrogate water which can only come from here. Its the reason we are located at Harlow Hill.

But, as the Harrogate Advertiser learned when it talked to the boss of Harrogate Spring Water, it was a surprise to staff, too.

However, what might have seemed like a bolt-out-of-the-blue was, in fact, the result of delicate talks which had been on-going for two years with multinational corporation Danone.

James Cain OBE, managing director of the rapidly-expanding family firm which has become a famous global brand after years of rising turnover and growing success, said: “We had been approached with offers in the past but none of them had been quite right.

“For 20 years, our commitment and investment in this company has been unwavering. But, in the circumstances facing us now, we realised as a family that we had taken the brand, the team and the business as far as possible.”

Talking to Mr Cain, marketing manager Nicky Cain and five members of staff inside the boardroom of its bottling plant which lies on top of two bore holes on Harlow Moor Road, it’s clear keeping what was to come in last Wednesday’s announcement confidential had been far from straightforward for Harrogate Spring Water, a firm with an open and friendly culture.

As a worldwide food-products corporation listed on the Paris Stock Exchange, Danone needed to time the news of its acquisition of a majority stake in Harrogate Spring Water with the release of its end of year results at 8am Paris-time.

At least one senior member of Harrogate Spring Water’s 100-strong staff learned of the take-over on the radio that morning.

Trust in the decision on the shopfloor at the plant is based not only on faith in the open management style established firstly, by Tony Cain when he launched Harrogate Spring Water on a boggy field in 2000, and carried on by his son James since then, but on the track record of Danone.

James Cain said: “We are a proud and passionate business with a proud and passionate staff. This deal is the most responsible thing we could do.

“Danone is the perfect fit for us. Danone and Harrogate Water have a shared ethos and approach to community and sustainability.

“It’s an investment opportunity to build on what we have achieved and grow new jobs. The benefits of bringing a global player like Danone to Harrogate should not be under-estimated.”

Once the deal kicks in, the Cain family will remain as minority shareholders and continue to contribute to the growth of the company.

Nicky Cain said: “The company will continue to be run like a family business. But the deal means we now have the benefit of having access to the resources of a global company.”

Mr Cain will join the management team of Danone Waters UK, a company he says is a perfect fit for the water brand’s efforts to create a fully sustainable business practice, including 100 per cent recyclable packaging, and bottles made from majority recycled content.

Even so, plans to expand its Harlow Moor Road bottling plant have been met with objections from Pinewoods Conservation Group and Harrogate and District Green Party - even though the company has pledged to replace any trees removed.

But the idea that being owned by a multi-national - whose portfolio includes Volvic and Evian - makes Harrogate Spring Water less “Harrogate” or undermines its green credentials gets short shrift.

James Cain said: “Naturally-sourced water is subject hugely to regulation. We are all about Harrogate water which can only come from here. It’s the reason we are located at Harlow Hill.”

Nicky Cain said becoming part of a corporation did not mean sacrificing the unique nature of Harrogate Spring Water, a company which reported a turnover of £21.6m for the year ending March 2019 and a pre-tax profit of £1.2m.

Last year saw it build on its position as the UK’s number one out-of-home bottled water brand after another year of major growth.

The brand has become increasingly recognisable round the world over the last ten years, being stocked by everyone from service stations and major shop chains to Royal Ascot and leading international airlines.

For what began as small family firm, and still is in a lot of ways, Harrogate Spring Water has come a long, long way.

Nicky Cain said: “In terms of Harrogate Spring Water being proudly Harrogate and British, nothing will change.

“We are not only allowed to continue in that way, Danone will insist we remain that way.

“Danone own regional brands in other places in the rest of the world which are very much allowed to enjoy their own identity.”

With the firm’s plans for expansion set to be decided by planners at Harrogate Borough Council on March 31, the timing of the deal is sure to stoke concern in some quarters.

Management at Harrogate Spring Water admit, should the plans get the go-ahead, it will involve more coming and going by lorries at the plant.

But it points to a history of mitigating against disruption and noise on Harrogate roads.

James Cain said: “Our record is good. We self-impose speed restrictions and hours of operating and have our 200,000 sqft warehouse in Leeds rather than in Harrogate.

"We are also very excited at the prospect of the new Tesla all-electric, battery-powered, light commercial vehicles.”

The Harrogate Spring Water is delighted that Danone is fully committed to gaining B Corporation certification for businesses that meet the highest standards of verified social and environmental performance and public transparency.

James Cain’s tenure at the company will be ensured for a few years by the usual ‘golden handcuffs’ associated with many such business deals.

Mr Cain's final word in front of staff is simple: “I’m not going anywhere.”