Silver Springs Bottled Water Company Sold
Silver Springs Water Co. of San Diego has been purchased by Hinckley & Schmitt, the nation’s third-largest bottled water company, for an undisclosed price--a move that allows Hinckley to tap deeper into the lucrative Southern California market.
Silver Springs will be merged with Deep Rock Water Co., the small Los Angeles-based firm that Hinckley bought last year, said George J. Schmitt, chief executive of Hinckley & Schmitt and grandson of one of the Chicago company’s founders.
The merger “significantly” increases Hinckley’s Southern California market share to about 17%, in third place behind Sparkletts Drinking Water and Arrowhead Drinking Water, which together control between 50% and 60% of the market, Schmitt said. Chicago-based Beatrice Cos., through Arrowhead and other units, is the nation’s largest bottled water firm. San Francisco-based McKesson Corp., owner of Sparkletts and other brands, is second.
“This gives us the basis for expansion,” Schmitt said. “We hope to be good competitors with the two larger companies out there.”
The merged firms will be called Silver Springs, and the subsidiary’s products will be marketed under the Silver Springs label in Los Angeles, Orange, Riverside, San Bernardino and San Diego counties. The bottled water is delivered to homes and offices and is sold in grocery, drug and health food stores.
Schmitt estimated that Silver Springs does about $20 million in sales a year, compared to $3 million for Deep Rock.
Hinckley & Schmitt plans to merge the Silver Springs work force of 70 with the 40 on Deep Rock’s payroll. Silver Springs President Chandler B. Beach will be president of the merged firms.
The purchase of the 55-year-old Silver Springs from All American Bottling Corp. of Coral Gables, Fla., was completed last Friday.
Southern California is the largest bottled water market in the United States, said William Deal, executive vice president of the International Bottled Water Assn. in Alexandria, Va. One out of three Southern California households uses bottled water, compared to one in six in the state as a whole and one in 17 households nationwide, he said.
Bottled water sells best in the Southland because “you have more population, you have a dry, arid climate . . . and you’ve had a number of water problems over the years,” Schmitt said. “The health-oriented, natural food sort of thing is sweeping the country. But they say everything starts in California.”
Bottled water is the fastest-growing segment in the beverage industry, Deal said. Sales this year will exceed $1 billion, of which $900 million will be bottled water and $100 million will be carbonated water, he said.
