From the top: Ole Sandberg
cool under pressure
Norway’s Voss Water has a celebrity following and displays healthy sales growth despite competing in a market awash with fancy H20. As the company makes a play for rapid global expansion, we talk to co-founder Ole Sandberg
words by CA Ferro
Ole Sandberg dived into a risky venture several years ago, but has managed to stay afloat against the odds in a market that’s almost completely saturated with the product he sells. The company 33-year-old Sandberg founded with childhood friend Christopher Harlem would turn Voss Water into the drink of choice for high rollers, celebrities and gourmets willing to pay premium prices for pure water packaged in a classy bottle.
The Oslo native taps into the power of New York City, where his company has strategic headquarters, to recharge his batteries for running a business that taps into an artesian source of Norwegian water.
In 2006 Sandberg expects to have sold $33m worth of bottled water to upscale restaurants, hotels, nightclubs and speciality retailers. He’s satisfied with the figures on the profit/loss sheet – even the red ink further down. “It’s important to expand the top line to get a strong presence in the market,” he says. “If we want to grow at the pace we’ve projected, it costs.”
Business still sparkling
Average annual sales growth has slowed to roughly 80% for the past couple of fiscal periods, following several years of 100% growth after the first case of Voss Water went on sale in 2000. The trademarked Voss line – Glass, Silver and Red – now quenches thirsts in 30 markets. The US, the UK and Dubai are the three places where Voss Water has made the biggest splash. “We’re training more people in the US to send them to Asia, Europe and the Middle East, so better growth is expected from 2007 onwards,” Sandberg notes.
To reach these goals, Sandberg will apply his core principle: “Be persistent and don’t give up.” Landing some of Voss’ best accounts took four years of talking to people who were unreceptive to this upstart trying to peddle water in a market awash with product. Finally the doors swung open, thanks to lessons Sandberg had learned in the past. In 1997 he founded Sophie Trading, a company dealing in women’s fashion. This successful venture taught him a valuable lesson: “I learned not to take no for an answer; there’s always another option.”
Brainstorming occurs naturally for Sandberg, often while he’s on business trips. “Twelve hours on a plane really gets your brain going, and meeting people gives you ideas,” he says. Another tenet Sandberg adheres to is: “Surround yourself with people who are smarter than you.” Throughout the years he has built up a close network of advisors. One name he mentions is company chairman Knut Brundtland, the son of the former Norwegian prime minister Gro Harlem Brundtland. “As a college dropout, you need to learn from others,” Sandberg smiles.
H2Show
Sandberg certainly listened to his friend Christopher Harlem back in 1997 when the idea for Voss Water was spawned. Harlem was attending university in San Francisco, where he noted the other students constantly walking around with bottles of Evian water. When Harlem returned home to Oslo on school breaks, Sandberg would pick his friend up at the airport and the first thing Harlem headed for was a drink of decent Norwegian water. He told Sandberg about how students would fill the Evian bottles with tap water from the lavatories, as if carrying a fancy bottle were a statement in itself. Bingo! “Why not?” they said to each other.
Scratching around to find support soon felt more like banging their heads against a wall. By mid-‘98 they had visited all the major advertising and marketing agencies in New York without receiving any support at all. Then they walked into Frierson, Mee & Kraft, where Neil Kraft was a partner. Kraft, a former creative director at Calvin Klein, was responsible for a number of perfume launches and is reputed to be the man who discovered Kate Moss. “Neil said: ‘Forget about it,’” Sandberg recalls.
But Kraft had second thoughts and called Sandberg and Harlem three weeks later to say he was on his way to Europe and would stop over in Oslo to talk with them. When he left Norway, Kraft was convinced they could create a winner if the packaging was right. Voss of Norway ASA was founded in 1998, and Sandberg and Harlem set up their headquarters in New York City.
In 1999, about a year and 1,000 sketches later, the pair agreed upon a bottle design that was modern but classic. “Packaging is important – striking packaging makes people stop and try something,” Sandberg states. “If you put it on the table, it becomes a conversation piece. And there’s a focus on quality and the idea that the hosts are willing to offer their guests the best.”
Before and during the period of packaging development, Sandberg and Harlem travelled around Norway to find the right water. The artesian water at the Voss source – 400km south of the west Norway town of Voss – proved to have the right purity and flavour, and its low mineral content meant it wouldn’t clash with fine wines.
Listen, learn and be different
One of the first obstacles Voss Water faced was to do with the existing channels of distribution. “It was an old boys’ club and nobody took us seriously,” says Sandberg. To show Voss Water wasn’t just a flash in the pan, the company hired experienced executives. “We were young – 24 or 25 – so we hired top lawyers and marketing people. We also had investors we could turn to,” says Sandberg.
Now the company is wholly owned by the family and friends of its founders, after a US equity investor sold its stake in February 2006. Harlem left management (and New York) in 2001 to resume what Sandberg calls “a normal life” in Norway. Last April Sandberg stepped aside as CEO and he’s now the global head of marketing, branding, new products and US operations. His style of management remains a little unorthodox.
“Try to be different; dare to be different,” he advises. “We want to do things differently.” The flat structure of the organisation and its open-plan offices is rare in New York. “I believe it helps everyone to share ideas and it means everyone feels like a part of what’s going on,” Sandberg explains. “It’s a Norwegian thing. It’s a bit tough to implement in the US, where they’re used to having a hierarchy – we try to be more democratic.”
Sandberg has hired and fired staff (the company has around 100 employees: 30 in the US, 60 in Norway and 10 internationally), but he tries to take a different tack when recruiting. He admits it’s difficult to find good staff, so he tries to talk to prospective employees in a casual setting, not a formal interview situation. “I try to get them to relax so we can get to know each other, get familiar in a non-business way,” he reveals. “I believe it’s important to find people you can spend time with and would want to hang out with in your leisure time.” Clearly the talent Sandberg already employs and the new individuals he hires will be instrumental in helping Voss Water to reach its goals.
Familiar faces
Sales have arguably improved due to celebrity sightings. Scarlett Johansson has been seen drinking Voss Water, and the company’s distinctive bottles can be spotted in The Apprentice, hosted by Donald Trump, and Syriana, starring George Clooney. Placing products in the hands of famous people is not part of the company’s strategy, however, because perceptions change and the ploy could backfire. Sandberg recalls how a rumour circulated that Voss was Madonna’s favourite water, but then she decided to change brands. “We don’t try to link to people, but to places,” explains Sandberg. “We sell to the best restaurants, hotels, nightclubs – that’s where you see the stars, and where the paparazzi take pictures.”
Sandberg is quick to point out that it’s not famous people who will help his company grow, but the people around him – the ones he learns from and the ones he teaches.
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