How Celtic Pure went from five-litre drums in the back of a van to 70 million bottles

AS JOB TITLES go, ‘door-to-door water salesman’ is probably up there with some of the weirder ones.

A tough job in any part of the world, it was likely an even harder one in Ireland in the late 90s when Padraig McEneaney started what would go on to become the country’s largest independent water-bottling company.

The Celtic Pure boss initially dropped out of school at the tender age of 16 to work on the family farm after completing his Inter Cert.

However he quickly realised the Monaghan property wasn’t big enough for both him and his father and began saving the money he was earning from a job in the local meat-processing plant before striking out on his own.

“I came up with the bottled water business because we had very high-quality natural water on our land,” he tells Fora.

“For the first year we sold door-to-door in large housing estates. If a shopper was buying five-litre drums in the supermarket, it saved people taking them from the market to their house and we could sell it a bit cheaper as we were going directly to the user.”

The now 45-year-old was a one-man band at the time, and the entire operation consisted of him and two local youngsters.

“I would go out in the van myself, there we two young lads as well from the town who would have worked for me for about six to 12 months,” he says.

“I’d drive the van and they would run from house to house so we got the full vanload delivered every night. I probably did that for the first year and a half.”

That we before he decided to build a factory on his farm.

What do you do and how long have you done it for?

Celtic Pure is a bottled water company, selling its spring product to retailers and corporate clients.

After building up a customer base selling door to door, McEneaney and his wife Pauline officially established the business in 2000 with €10,000 of their savings.

They still sold door to door for a while, but this time it was under their own ‘Celtic Pure’ brand. Once word began to spread and demand starting ramping up, McEneaney decided to build a 3,000 sq ft factory on a greenfield site near his family’s farm to help give the company a proper springboard.

“The first stage of the factory unit was built in 2003 and then we started selling to shops in the local area and small wholesalers,” he says. “Then we just kept building up gradually.”

Celtic Pure founder and chief executive Padraig McEneaney

The company continued to slowly build for years with Pauline and the couple’s two, now adult, children Sinead and Cían also pitching in to help keep things ticking over.

“Sinead would have helped Pauline fill some water and help load the van, Pauline would have done the sales invoices on a Sunday morning; they would have helped a lot in the early days,” McEneaney says.

However, the company has begun to expand much more quickly. While in 2013 it had sales of just under €5 million, McEneaney is confident by the end of this year revenue will be more than double that.

Now Celtic Pure employs 50 people and recently revealed that it would spend €5 million expanding its Monaghan bottling facility, announced a sponsorship deal with the Football Association of Ireland and committed to hiring a slew of new workers.

What are your costs and how do you make money?

Celtic Pure’s only revenue stream is, no surprises here, selling water. The company’s sales are split in two. About half is sold to shops under the firm’s own brand, while the rest is sold to corporate clients.

“We do a lot of private labels for companies such as Aldi, Dunnes, Gala, that type of thing,” McEneaney says.

“It’s running at about 50:50 at the moment and I’m happy with that; you wouldn’t like it to go too much one way or the other.”

The biggest expense for Celtic Pure is staff, who cost the company just over €1 million, according to its most recent accounts, for 2014. The accounts also show that the company booked a profit of almost €350,000 during that year compared to about €240,000 in 2013.

Dunnes Stores is one of the retailers stocking Celtic Pure

The factory extension, which will be financed through a mix of debt and the company’s own cash, will be a big cost for the next few years. Distribution is the second-largest expense, while the firm saves some money by manufacturing its own plastic bottles.

“We reduce our costs by manufacturing everything ourselves; when you look at a bottle of water in the shop there is VAT, the shop makes a profit and so does the distributor before it makes its way back to us,” he says.

McEneaney estimates that for a 500ml bottle of Celtic Pure, which typically sells for around €1 on the shelf, between 15 and 16 cent goes back directly to the company. He says that the company’s sales of €8.7 million last year are set to top €12 million by the end of 2016 as the company aims to produce 70 million bottles of water.

What is your market?

The vast majority of Celtic Pure’s sales are in the Republic with McEneaney putting the figure at about 80%. Selling water to the Irish may once have been regarded as a Herculean task, but no longer.

Bottled water now accounts for about one-fifth of the soft drinks market here, compared to just 1% in 1980. It is the fastest-growing category among soft drinks in Ireland, with Euromonitor International valuing the market at just under €170 million last year.

Northern Ireland and the UK account for most of the rest of the company’s sales at about 10% each. The company also flagged its intent to move into the US when it announced its €5 million expansion. The potential in both the UK and US is huge, with both consuming billions of litres of bottled water every year.

“We have one contract secured in the US and we are in talks with two other US companies in terms of distribution,” McEneaney says.

Despite this, he has no intent of neglecting his home turf, adding: “With the growth we have had in the domestic market we have had to concentrate here for the last couple of years, water sales have seen double-digit growth over the past two to three years.”

Perhaps most strangely, you can also pick up a bottle of Celtic Pure if you’re passing through Shanghai. Among a handful of other foreign markets his company has a presence in, McEneaney signed a minor to sell into China at a trade show in the UK and has maintained it for years.

“We have a small contract ongoing there all the time with a group of retailers in Shanghai,” he says. “It’s small volume, but it is with some high-end retailers.”

What is the competition?

If Celtic Pure wants to move into the US, it will have to go up against juggernauts like Nestlé Pure Life and Aquafina, produced by multinational giants PepsiCo and Nestlé. However, that’s some way off and Celtic Pure has plenty of competition closer to home.

In Ireland, Ballygowan, owned by UK listed drinks giant Britvic, Danone Waters, which boasts household brands Volvic and Evian, and Deep RiverRock, owned by Coca-Cola, dominate. Euromonitor International estimates the three brands have nearly a third of the Irish water market to themselves.

Ballygowan's Ryder Cup 2006 glass bottle

McEneaney insists that he is not focused on battling it out with the larger brands; to him, everyone is a potential rival.

“Anyone selling water in Ireland is our main competition, I wouldn’t want to just pick one or two,” he says.

The Monaghan man says that what separates him from his multinational-backed opponents is his independence.

“We are different because we are the largest independently owned water-bottling company; when a customer rings up and wants to talk to Padraig, they can talk to him,” he says.

“The big brands are owned by corporate companies and they don’t have the same interaction with customers that we do in Celtic Pure.

“If a buyer wants a decision this afternoon he can ring me and I can make a decision myself without managers, and most of the time I’ve made the right decisions.”

What is your vision for the company?

McEneaney has no intentions to radically alter his business model but instead plans to make incremental changes and steadily ramp up the company’s offering.

A move into flavoured water is on the cards, which he says he hopes will be a reality by the end of next year, while he also hints at more “high-end, value-added products” without giving an example. That aside McEneaney wants the core business to continue to scale.

“Our target by 2020 is to be turning over €20 million and we are confident that we will reach it,” he says. “Then I will decide what direction we are going in as a company. I would like to continue growing, whether that’s by acquiring different water companies or expanding ourselves.”

The next generation

However McEneaney himself may not be the head honcho much longer if the firm meets its 2020 goals, saying that he sees his son Cían, who is currently working with accountancy firm PwC, taking over the business.

“I’m 46 next month and I would like to be able to take the foot off the pedal a small bit with Cían becoming the CEO over the next three or four years. It would give me a bit of space to look at the company in a broader view as well, instead of being so hands-on every day,” he says.

However, McEneaney has no plans to settle down on a beach somewhere yet. Even if his son takes over, the Celtic Pure founder sees himself as playing a key role in whatever direction the company takes.

“I don’t think I will ever phase myself out, unless the business is sold at some stage, because I’m the driving force behind it,” he says. “I take two weeks’ holidays a year and, bar that, Celtic Pure is my life. I have two hobbies, one is Celtic Pure and the other is gaelic football, it’s what my life is built around.”

And is his son keen to take over?

“He is, when the time is right.”

This article is part of our weekly series examining the nuts and bolts of businesses. If you would like to see your company featured, please email news@fora.ie.