Bottled water company AQUA was founded in 1973 by the late Tirto Utomo. When Utomo passed away unexpectedly in 1993, his family was faced with a difficult decision regarding the business. They approached the multinational company Danone, who shared the sa
Danone AQUA: Committed to Healthy Hydration
You’ve been with Danone for many years, from Sales Director in the Netherlands to President Director in Indonesia. Tell us what your role at AQUA Danone entails today.
My role in AQUA is to work with my team on the long-term sustainability and short-term ambitions of the company. We set out a vision for this company and work consistently with all people here to deliver that vision. I see it as my job to create conditions for our employees to thrive in AQUA and develop themselves professionally. There is not a single day that is the same.
Has your experience as a Lieutenant in the Royal Dutch Navy in 1990 had any impact on the way that you conduct business today?
After graduating from University I was an Economics teacher at the Royal Dutch Naval College. In those days in the Netherlands it was compulsory to serve your country. I learned values like discipline, respect and not giving up when you want to achieve something; values I consider relevant for successful leadership.
Your water comes from 13 springs and 18 factories in Indonesia. What makes your water healthy? How is it processed?
We are very picky about the selection of our springs and follow a strict criteria regarding selection. We carry out scientific research looking at mineral content and other compositions that tell us if it meets the AQUA taste profile, which is influenced by the minerals. We look at the amount of water the natural area has without upsetting the water balance. Then we drill and see if we can find the water, and we check to see how much we can take. If the composition is not good, we stop.
We make sure our water is fresh, tasting good, and meeting health standards. We filter it, of course, with a complex filter system, and then apply Ultra Violet light which kills micro bacteria. You cannot drink the water when it's on the line, but after a few hours it's ready. The whole process is natural.
We will be opening factory number 19 in April in South Sumatra.
Danone AQUA is a publically-listed company. What are the projections for 2016?
We are the biggest water brand in terms of volume in the world; about ten times the size of Evian. The growth of our business comes mainly from two factors: growth of the population (1.5 percent per annum) and growth of the middle class. Households will switch from boiling water to safer, packaged water. Moreover, modern trade grew rapidly, particularly in mini-markets which have helped us grow exponentially. Consequently, projected growth in the bottled water industry in Indonesia is around 10-12 percent per annum.
You have approximately 2 million sales points across Indonesia. How is distribution managed?
I think indeed this is one of our key strengths. We use 75 family- owned distributors who have been part of the business since the beginning. We have 220 depots that distribute into wholesalers that then go to the warung and the toko. 85 percent goes through this system, and the rest goes through mini-marts and supermarkets, done through our own distribution centres, of which we have 14 all over Indonesia. How the product flows is an incredible spider web.
We also have a unique distribution method called AQUA Home Service, or ‘AQUA Ladies', where we currently empower over 7,000 women in Indonesia to sell AQUA from their homes. We select opinion-leaders and help them build a business selling drinking water, mainly by the gallon using delivery boys on motorbikes.
We have an ambition that everywhere in Indonesia you must be able to find AQUA.
Danone AQUA has 12,500 employees in Indonesia. How does your company ensure personal and professional development?
I don't know where to start! We have very extensive training programmes for all levels, from operators to executives, leadership trainings and very specific functional, technical programmes. We ensure development of our people via four principles: 60 percent is on-the-job training, 10 percent classroom training, 10 percent online/digital training, and 20 percent through networking. As a result, many of our people are typically long-term employees for whom working at AQUA is a career instead of a job.
How do you help those who do not have access or means of accessing clean drinking water?
AQUA is committed to proactively contribute in this field through an ambitious WASH (Water Access Sanitation and Hygiene) programme aiming to improve the health of thousands of families around Indonesia. Water committees are formed and trained to design the facilities, monitor the works, and ensure proper management long-term. Three types of community groups are targeted: villages surrounding AQUA factories, and remote villages in NTT and NTB through our ‘ 1L for 10L' initiative. Currently, the WASH programme has provided benefits to more
I come from a country where I can drink water from the tap; it's a human right. We hope that Indonesians one day will also have that choice.
than 130,000 people in 18 districts, and will continue to grow.
What is Danone AQUA doing to reduce its impact on the environment, namely plastic waste, through your CSR project AQUA Lestari? Are there plans to go largescale in these endeavours?
Our business model involves plastic, whether we like it or not. There are a lot of things we can do and have been doing. I made sure we stopped the plastic wrapper on the lid and now our bottles are 100 percent recyclable. I see huge opportunities for us to go further. The technology is there.
AQUA developed AQUA PEDULI (Plastics Waste Recycling Programme) in 1993 as a form of social responsibility to manage plastic waste. Since 2010, 600 scavengers from three cities – South Tangerang, Bandung, Denpasar – involved in our Scavengers Empowerment Programme (PEP) have been empowered to improve their quality of life through access to healthcare and increased recycling expertise.
In Tangerang, we collect 80–90 tonnes of plastic per month, which is crushed in machines and mainly exported to China for recycling. Every month this unit makes enough profit to pay the pemulung, cover costs, and make profits. This project is scalable and I'd like to see this replicated in other cities.
The World Health Organization (WHO) does not consider bottled water an improved or sustainable solution to water access in Indonesia, and other similar countries. What would you say to this?
As the pioneer of Indonesia's bottled drinking water industry, AQUA continually sets the benchmark for the application of innovative technologies geared towards improving the production process and products. Packaging remains a challenge for the bottled water business, but somehow the impact on the environment is limited by high recycling rates.
We have four pillars in the AQUA Lestari programme: Environment and Water Protection, Green Company, Product Distribution and Community Involvement and Development. These pillars are realized by implementing various social and environmental programmes ranging from upstream (catchment area), middle (AQUA water source area) to downstream.
Do you think there will be a day when Indonesians will have access to clean and free drinking water? And if so, what will this mean for your industry?
Yes, of course. I come from a country where I can drink water from the tap; it's a human right. We hope that Indonesians one day will also have that choice. Until then, we consider it our duty to make AQUA available as much as possible to provide as many Indonesians with a healthy hydration option.
What are the principles that Danone AQUA holds dearest to its heart?
At the heart of AQUA's reason for being is a very simple goal: to make available – to as many people as possible – healthy, clean, and pure drinking water that is full of the natural goodness essential to long-term health. We want to do it in the most sustainable way; making sure that everybody in our ecosystem can benefit from AQUA. We make sure whatever we do, we make others part of our story.