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Published 26 July 2012 05:03, Updated 18 October 2012 00:50
Drink up: Dan Flynn is driven by a desire to end injustice Rob Carew
Four years ago, Daniel Flynn had an idea. Appalled to read that 900 million people had no access to safe water and equally angered by the idiocy of bottled water in a country where the tap is safe to drink from, the 19-year-old student wanted to do something.
He decided to start his own bottled water company that would channel all its surplus into funding water projects rather than making a profit.
“The simple idea was, ‘Let’s combine these two extremes and find some way to make this industry bring water to people who need it,” Flynn says.
By October this year and after lots of trial, error, generosity and learning “the reality of business” – as Flynn puts it – his brand Thankyou Water will have replaced 7-Eleven’s own label water in 600 convenience stores nationwide. The profit from anticipated annual sales of 2.5 million bottles at 7-Eleven alone, plus sales at 1000 Australia Post outlets and about 300 Provendor vending machines will give Thankyou Water at least $500,000 to spend on water projects.
Melbourne-based Thankyou Water is a charitable organisation that competes at the low end of the mainstream bottled water market. Its product sells for $2.30 for a 600 millilitre bottle. This form of business – a social enterprise – appeals to the army of Gen Y consumers who will spend money but are concerned about where profits go, Flynn says.
“Consumers are starting to get a little bit smarter,” the 23-year old says. “We’re going to take on the giants, take on the Mount Franklins of the world.”
After deciding he wanted to do something to about the water injustice he’d become aware of, Flynn, a construction project management student at RMIT University, had to research how a company started from scratch. He contacted a bottled water company and got a sympathetic hearing.
Flynn came away with a basic list of what he would need to start a bottled water venture, which included $100,000 to invest in a bottling run and upwards of $150,000 to invest in bottle design.
As he sits in a cafe near his office, Flynn can’t help peeking at the brand of water it stocks. He does that a lot, he laughs. “It’s quite hard to switch off.”
The next step was speaking to bottlers to find out about costs. In August 2008, wearing borrowed suits, Flynn and friends Jarryd Burns and Morgan Ranieri went to meet bottlers. They said they were about to launch a “huge” brand of water that they could not name. By the time they met their fifth bottler, they dropped the mask of confidentiality and explained what they were planning.
“I’ve been in this industry for 15 years,” the managing director said. “This is awesome!”
He undertook to cover the first run of production. Offering open-ended credit to the venture was the first piece in the puzzle. The second came the next month, after securing a meeting with the then chief executive John Murphy of the packaging company Visy.
“It was supposed to be a 15-minute meeting. It went for five,” Flynn recalls. “He came straight to the point. He asked us one question, ‘What do you want from me?’” Flynn said the first thing that came into his head: “We want 10 million bottles a year for free.”
His colleagues were appalled. They hadn’t discussed any such thing. The meeting then ended. Murphy, Flynn says, smiled and said, “We’ll get back to you.”
Surprisingly, he did. Three weeks later, Visy offered the students an unused bottle they had designed and a once-off donation of 30,000 bottles.
It was also a business opportunity for Visy. Thankyou Water could only buy the bottle from that company and they continued to do so for a year and a half, when they switched suppliers.
The next major part of the chain was to get a distributor. Metro Beverage is the largest independent distributor in Victoria, South Australia and Western Australia, with products such as Lipton Iced Tea and Evian spring water in its catalogue. A scheduled 10 minute meeting turned into an hour and a half.
“All I remember is a lot of excitement, waving our hands about and talking about changing the world,” Flynn laughs. They came out from the meeting with the director with a commitment by MBC to take 50,000 units – in effect, guaranteeing the company that had not yet started business its first sales.
Thankyou Water could now start producing, it was only just the beginning. The first product run had to be recalled as the labels were scrunched and unreadable. Product recalls can destroy established brands. For a new one, it would have been instant disqualification from the game had the distributor not given them a second chance.
A year on, in mid-2009, Thankyou Water ran into trouble again with the bottler. Despite promises of stock “in the next few days”, they waited five weeks. Thankyou Water was dumped by 300 of the 350 cafes and restaurants that stocked it.
Thankyou Water changed bottlers, losing about $20,000 in stock in the process. A couple of months later that bottler went bankrupt, costing them $10,000. The failures hurt. They could have been disastrous. Again, their first distributor, MBC, stuck with them.
The brand had also just started in Queensland with a new distributor, who was placing the product at 80 new outlets. The new distributor dropped them.
Over the next couple of years Thankyou Water tried to get a supply contract that would give them critical mass. Long talks and an initial promise of a contract with one of the big two supermarket chains – Flynn will not say which one – led to nothing after the buyer changed.
They scored some wins. Australia Post took Thankyou Water on as its first consumable item – along with Wrigley chewing gum.
Vending machine Provendor got on board, too.
But there were disappointments. A fast-food chain that had been interested changed its mind. Ditto with an airline.
One channel was a success, however. In June 2011, before a planned meeting with 7-Eleven, the company started a social media campaign, encouraging fans to lobby 7-Eleven via its Facebook site, to stock Thankyou Water. The campaign was a strong influence, as chief executive Warren Wilmot concedes.
“The Thankyou Water team harnessed the power of Facebook to get thousands of people to show their support,” Wilmot says. “We were overwhelmed. In addition to the thousands of posts of support we had videos, songs and extensive media coverage, which made us even more certain that the product would be a hit in our stores and would give us the chance to help create positive change in the world,” he says.
The chain started stocking Thankyou Water in August last year – just over a month after the first meeting with the bottled water entrepreneurs.
The company that started as a 19-year-old’s idea is now has two full-time employees, three part-time staff and 25 volunteers. This year for the first time, Flynn is being paid a salary – $46,000 – for his role of managing director.
Having put his RMIT University course on hold in the third year, Flynn says he’s unlikely to resume.
“It has been dropped indefinitely. We’ve got our business and a job in construction is just not where I’m headed,” he says.