Romaqua Group SA, the bottler of the Borsec mineral waters, will enter the carbonated soft drinks and packed coffee market as of this month. Its brands on the two markets will be Giusto and Metropolitan respectively.
Romaqua will therefore become a new player on two heavily disputed markets. The soft drinks market is worth about 500 million euros a year and is dominated by three major players: Coca-Cola, Pepsi (through Quadrant Amroq Beverages) and European Drinks.
The coffee market is estimated to more than 100 million euros a year and is divided among Elite, which accounts for about half of it due to its Elita brand and Kraft Foods, which sells Jacobs and Tchibo.
Romaqua representatives say they rely on the quality of the technology installed at the facilities they own and on a good distribution to provide their competitive edge on the two markets.
"We rely on a better price/quality ratio than our competitors. The equipment we have at our bottling factory in Busteni was purchased from German Sig Company and is among the most modern at the moment," says Octavian Cretu, Romaqua Group chairman.
Romaqua is currently working with 100 distribution companies that cover the entire country
"The main reasons why we decided to enter these markets are that we already have a national distribution network in place and can use our mineral water bottling expertise. We wanted to be already well positioned on these markets by the time Romania joins the EU in 2007. Had we waited any longer, it would have been harder to tap into them. We are also considering other segments of the foodstuffs market," Cretu added.
The company will enter the carbonated soft drinks segment only at first, selling 11 kinds of soft drinks, four of which will be Cola-type products.
The Giusto drinks are more expensive than the European Drinks products, but less expensive than those made by Coca-Cola and QAB (PepsiCo) bottlers, according to Romaqua officials.
The company will invest in promoting its drinks by TV advertising inclusive, with the clip scheduled to run on various TV stations as of today.
"We built a natural juice factory in Busteni, which is already operational. We bought some warehouses from a former state-run company, Cerbu Sinaia, which we remodelled inside and had the production lines installed," Cretu says. Romaqua's investments in the in the two facilities amount to $15 million, covered by the company's own resources and by loans from BCR.
Cretu did not reveal the market share the company wanted to attain by the end of 2004.
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