Danone enters European cooler market

Yesterday we reported on Danone's acquisition of a Quebec-based supplier of home and office delivery (HOD) water coolers, a move which strengthened the French company's dominance of the Canadian market.

Now the group has announced the acquisition of another HOD company, Chateaud'Eau International, the leading player in the French market with a 28 per cent share. Although Danone's bottled water brands such as Volvic and Evian are ubiquitous in Europe, this acquisition marks the company's entry into the water cooler sector there.

Chateaud'Eau is owned by Ondeo, the water unit of the Suez group, and as well as its dominant position in France, it has significant market shares in Italy (where it is the number two player), Spain (number three) and the UK, giving Danone a significant foothold in the European HOD market right from the outset.

Chateaud'Eau has sales of around €50 million and has around 150,000 coolers in 62,000 companies.

Danone's spectacular entry into the European market is a warning bell for Nestle, the Swiss group which owns the Perrier and Vittel bottled water brands and which is already a major player in the HOD market in Europe. Just last week, Nestle obtained nationwide coverage in France with the acquisition of a third HOD company there, and with significant growth expected in the water cooler market across Europe, there are likely to be more acquisitions by both groups in the future.

Danone said that the European HOD market had grown by 40 per cent a year in volume terms since 1995, and that the number of coolers in offices and homes across the continent - currently around 1 million - was expected to double by 2004 and triple by 2007.

The French group is already the leading global player in the HOD sector, with strong positions in Canada, the US, Mexico, Argentina, Indonesia and China.