Raging Water

After more than a decade, double-digit growth continues to fuel Crystal Mountain Natural Spring Water.

By William Atkinson

In 1996 Terry Robert and his wife founded The Roberts Group, dba Crystal Mountain Natural Spring Water, in a makeshift home office in Huntsville, AL, USA.  Focusing on sales of five-gallon jugs of natural spring water, the pair had one van and no customers.  A humble beginning to be sure, but one with a lot of promise.  With more than 20 years experience working for Miller Brewing Company, Roberts, president and CEO of the new venture, was confident that his beverage industry acumen would serve him well.  Sure enough, the business flourished; in a year’s time 12 employees and 3,000 customers were added to the mix.

In addition to Roberts’ industry experience, Crystal Mountain had a local water supply, a natural spring located just 55 miles from its bottling plant.  “As our customer base expanded, the spring could no longer support the amount of water we needed,” Roberts explains.  It was a good problem to have.  By 2001, the company had 31 employees and 8,500 customers, so Roberts built a 21,000-square-foot bottling plant, distribution and warehouse facility, and began to tanker in the water from a number of natural springs throughout the Tennessee Valley.  To ensure product consistency and integrity, incoming water was micron-filtered through a series of six filters, the first five of which are 0.5 microns.  The sixth is 0.1 microns.  The water is then ozonated and treated with UV light to act as disinfectants.  Bottles are also sanitized with ozone, heat and high-pressure water.

The company currently has about 40 employees in its three facilities, which are in Huntsville, Knoxville and Birmingham.  “We have been experiencing double-digit growth since business started, and in 2004, we acquired the right to Mountain Valley Water for Huntsville and the north Alabama area,” Roberts says, explaining the company’s growth trajectory.

The company has become an established player in the booming bottled water market, belonging to both the International Bottled Water Association (IBWA) and the Southeastern Bottled Water Association (SEBWA).  Roberts was president of the latter from 2003-2005.

Being located in Huntsville has been a mixed blessing for the company, according to Roberts, who describes the city as the “Silicon Valley of the South,” home to NASA, government defense contractors and other technology companies.  “As a result, the market is very highly educated and high-income,” he notes.  In fact, he reports, in the Southeast, Huntsville has the highest disposable income of any city, with Atlanta coming in second.  This is excellent for business.

However, with unemployment being about 3 percent, it can also present a challenge.  “We need to provide a great product and excellent service,” explains Roberts.  “Customers want a clean-cut person in a nice uniform who shows up on time.”  With unemployment being so low, it is not always easy to get the best employees.  The company’s strategy is to continue to interview until it finds candidates who are a good match, and then keep them around with excellent training and a competitive pay and benefits package.

Employees also find the company’s incentive programs to be good reasons to stay.  One is a Pay for Performance incentive program.  Each employee has a base salary, plus monthly goals.  If they hit those goals, they earn a financial incentive.  The company also has annual volume and dollar goals.  “If we hit these, everyone gets additional incentive money at the end of the year,” reports Roberts.  To make the initiatives motivating, management makes sure that the goals are attainable.

Crystal Mountain also does semi-annual performance reviews with employees, where managers grade their employees and employees grade themselves.  Rankings are from 1 (worst) to 5 (best).  If there are discrepancies between the manager score and the employee self-evaluation, they are addressed and resolved.  If and employee ends up with a 3 or above, he or she receives incentive money for the six-month period.  There is even an incentive for employees who fall short.  “If they can get their rank up to a 3 or better by the next performance review, they receive money for that six-month period plus the previous six-month period,” Roberts explains.

Home and office delivery of five-gallon jugs and the accompanying cooler program are still the biggest part of Crystal Mountain’s business.  But the company has expanded its offerings.  For customers who out-grow the cooler program, Crystal Mountain offers and Advanced Drinking Water System as an alternative.  This involves hooking up food-grade water lines to regular water lines.  Tap water then tuns through a three-stage point-of-use filtration system that removes particles, lead, chlorine and other chemicals and particles.  The water then is held in a chiller.  “Some of our customers who find they’re ordering more and more five-gallon bottles often decide to make the switch to this system,” explains Roberts.

In addition to bottled water, the company also offers coffee service, including commercial coffee makers, supplies and coffee, including Starbucks and its own premium Crystal Mountain coffee, which it purchases from Empire Coffee in New York.

Cases of single-serve bottles are also an option, and not only for HOD customers.  Currently, the company offers 16.9-ounce bottles with flat caps or sport caps, as well as 20-ounce bottles, both of which are available in cases of 24.  It also offers 1-liter bottles with flat caps or sport caps, which are available in 12-packs.  Last year the company sold more than 100,000 cases of single-serve water.  Much of that volume was private label, but the company also has made in-road into the DSD system, signing on wholesalers for the Crystal Mountain brand.  It’s an area that Roberts has identified as a growth opportunity and hopes to expand.

The company’s private label business, meanwhile, has helped to maximize production efficiencies and also provided Crystal Mountain with a competitive point of difference.  “Dasani and Aquafina have the shelf space in the grocery stores, and we don’t try to compete with them,”  explains Brett Smith, director of sales and marketing.  “However, we can compete in the private label area, because Dasani and Aquafina are too big to do small quantities of private labels.”

Small runs are not an issue for Crystal Mountain.  The company has done private label programs for politicians who are running for office and using them as giveaways, as well a for restaurants, sports teams and school fundraisers.  One particularly significant program involves the University of Alabama and Auburn University.  “There is a tremendous football rivalry between these two schools,” explains Smith, and Crystal Mountain has created  private label waters for fans of both schools.  The university-branded waters have been so well-received that, in a move rarely seen in the world of private label, Crystal Mountain has created a television spot promoting the waters and identifying Crystal Mountain as the source.  The ad, which shows rival fans seated next to each other at a game, ends with the fans toasting with the waters as the voiceover intones: “Tide and True or Orange and Blue, Crystal Mountain is the refreshing taste everyone agrees on.”

The future?  Maintaining the company’s history of double-digit growth rates.  “We are planning to open up two more locations,” replies Roberts.  “The next one will allow us to go into the Nashville market.”

University-Branded Waters for rival Alabama schools have been big sellers for Crystal Mountain Natural Spring Water.