Breck Speed remembers a door getting closed in his face early in his career as a bottled-water executive.
The Little Rock businessman was interested in buying a small Mountain Valley Water distributor that was for sale.
“I was told I would never, ever be able to buy a Mountain Valley distributorship,” he said.
That door-rattling slam was a decade ago. Speed, now chief executive officer of Clear Mountain Water, has since acquired several of the company’s regional distributorships.
And on April 23, Clear Mountain bought the venerable Hot Springs firm itself and will adopt the Mountain Valley Spring Co. name. Production of the famed green Mountain Valley bottles will be consolidated into Clear Mountain’s Veriplas Containers Inc. in Little Rock.
Terms of the deal weren’t announced. Industry sources estimate the transaction at $18 million.
At the time of the transaction, Clear Mountain’s distribution network accounted for the largest block of Mountain Valley sales, about 10 percent.
The Mountain Valley purchase includes another Hot Springs concern, Diamond Water Co. The combined annual revenue of Clear Mountain, Diamond and Mountain Valley is $55 million.
Speed’s big plans for the venture?
“My idea, short term, is to make a lot of money to pay my bank and investors,” he said with a laugh. “We think there is tremendous opportunity to triple and even quadruple the size of the company we have.”
Clear Mountain acquired Mountain Valley from Sammons Enterprises Inc. of Dallas. Sammons was founded in 1962 by the late Charles Sammons, an orphan who became a billionaire philanthropist.
His namesake company has owned a variety of business interests including Midland National Life Insurance, North American Company for Life and Health Insurance and The Grove Park Inn Resort in Asheville, N.C.
Sammons bought Mountain Valley in 1987 as the bottled-water boom was beginning to explode. Total U.S. bottled-water sales were $1.5 billion back then. Today, the figure is $8.3 billion.
Nationally, bottled water is recognized as surpassing beer and milk to become the second-largest selling beverage behind sodas. However, Moun-tain Valley failed to grow with the ever-expanding market.
“Mountain Valley is the same size in sales that they were in 1988,” Speed said. “That’s a sin.”
‘Shellacked’
From his perspective, Mountain Valley should’ve focused on growing its niche sales as the premier bottled water in the nation.
The list of company clientele remains impressive: The White House, Air Force One, the U.S. Senate, numerous movie stars, entertainers, sports figures, leading restaurants, hotels and many famed Las Vegas casinos.
Famous thoroughbreds, including Secretariat, have trained with Moun-tain Valley as their drinking water. Mountain Valley is the official water of the Kansas City Chiefs.
Sammons tried to make inroads in the price-sensitive case sales market, which put them in competition with corporate giants such as Nestlé, Pepsico and Coca-Cola.
Switzerland-based Nestlé S.A. owns the nation’s largest bottled spring water brand, Poland Spring.
The venture is part of Nestlé Waters North America (once known as Perrier Group of America), which owns 13 other brands of U.S. bottled water. The list includes Aberfoyle, Arrowhead, Deer Park, Ice Mountain, Ozarka and Zephyrhills.
Aquafina, the No. 1 bottled water label in the nation, numbers among Pepsico’s holdings. No. 2 Dasani is part of the Coca-Cola menu of soft drinks.
Sammons Enter-prises generated revenue of $1.9 billion with its diverse holdings.
But that is dwarfed by Nestlé, the largest food company on the planet and multi-billion dollar rivals Pepsico and Coca-Cola.
“They got shellacked,” Speed said of Sammons’ effort to compete with the big boys. “They chose to go a different way. They decided to go in and mix it up on the low end.”
Speed is on a mission to add new luster to the Mountain Valley name, with improved sales.
“You must have the discipline to maintain a defensible niche,” he said. “With Clear Moun-tain, home and office delivery has been our niche.”
History
Mountain Valley Spring Water holds a special place in the history of American bottled water. It is known as the first domestically produced bottled water from a single source distributed nationally under one label.
The venture was launched in 1871 by pharmacist Peter Greene, who acquired what was originally known as Lockett’s Spring. Renamed Mountain Valley, the spring is 10 miles north of Hot Springs on a 600-acre spread in the Ouachita Mountains.
In 1987, Speed was working at the Mitchell Williams Selig Gates & Woodyard law firm in Little Rock on a career track toward partnership. But he wanted a change of pace and decided to tap into the then-trendy business of selling bottled water.
Speed admits his family thought he was crazy to make such a radical career decision.
“I was 29 at the time, with a small child and my wife was pregnant,” he said. “It made perfect sense to me at the time. Dad really didn’t speak to me for several weeks.”
Speed began as a central Arkansas distributor for Tawanee Water Co. in Gravette (Benton County). He and his only employee took turns driving a delivery truck and selling the spring water in a 60-mile radius around Little Rock.
1988 revenue: $98,000.
Speed said it didn’t take long to realize he needed to be in the bottling business as well as distribution, which eventually grew into Veriplas Containers.
During the past seven years, Speed has directed 18 transactions that has taken the company to Kansas City, Charleston, S.C., and markets in between. The company now employs 115.
“We have a lot of good people now,” he said. “And it’s incumbent on me to get the hell out of the way.”
Clear Mountain Transactions
1995: Sterling Springs Water Co. in Kansas City, Mo.
1997: The Waterman and Magnolia PureWater Inc., Greenville, Miss.
1999: Clear Mountain Water, distributor in Memphis
2000: Mountain Valley Water distributorship in Nashville, Tenn.
2001: Mountain Valley Water of Little Rock, distributor
2002: Alpine Spring Water Co. of Charleston, S.C.; Pure Water in Memphis and two distributorships, Mountain Valley Water of Pine Bluff and Mountain Valley Water of Kansas City
2003: Fresh Squeezed Water of Kansas City, Mo., Dean’s Coffee in Little Rock and Mountain Valley Water distributorship in Charleston, S.C.
2004: Mountain Valley Spring Co. in Hot Springs, which includes another Garland County spring operation: Diamond Water Co.