Amcon Distributing Co., which yesterday finalized its $2.87 million acquisition of Hawaiian Natural Water Co., barely took time to quench its thirst before taking the plunge. Water firm’s parent
gives Starr Seigle
$1 million pactBy Dave Segal
dsegal@starbulletin.comThe Omaha, Neb.-based distributor of consumer goods has already awarded Honolulu-based Starr Seigle Communications a $1 million annual contract to spearhead a nationwide advertising campaign for Hawaiian Springs water.
Amcon consultant Archie Thornton, president and chief executive of The Thornton Works Inc. in Carlsbad, Calif., said Amcon is planning a mainland rollout of its wholly owned subsidiary's natural spring water beginning late in the first quarter of 2002. Thornton said the marketing campaign will begin on the West Coast and move east, with the marketing blitz also hitting Guam, Saipan and eventually Japan.
The big advertising push, while benefiting Hawaiian Natural Water, also will give a big boost to the financial coffers of Starr Seigle.
"The importance of this assignment for Starr is that typically the Hawaii market has been stagnant or actually in decline with a lot of national advertisers leaving the market because the budgets become part of a California assignment or something," said Thornton, who lived in Hawaii for nearly 20 years and married a local woman before moving to California.
"In this situation, this is new money coming in to the state to support expansion of a product line produced in Hawaii but rolled out on the mainland and in Asia. So it's incremental money to help support our export industry. It's found money for the advertising industry that has been under siege for the last year. It's a very exciting thing for the local advertising industry because it's new money, not money just being reshuffled in the deck."
Starr Seigle Chairman and CEO Jack Bates, who estimated the agency has 10 to 12 million-dollar accounts, was pleased about landing another lucrative contract. "We have some really, really wonderful (million-dollar) clients -- Hilton Hotels, Hawaiian Airlines, American Savings Bank, Kaiser among many, many others," Bates said. "There aren't many million-dollar accounts out there, especially in these times. It's wonderful. We're thrilled and delighted."
Amcon, which is investing more than $2 million in the construction of a new, high-speed bottling plant on the Big Island to meet increased demand, now will be able to produce 240,000 cases per month from the current output of 40,000 cases monthly. In the past, Hawaiian Natural has had a backlog of orders because of insufficient bottling capacity. With the new plant, Amcon Chairman and Chief Executive Bill Wright said he believes the company can quickly move to profitability.
Thornton said Amcon's mainland media blitz will focus on magazines, billboards and some newspapers. "It's going to be a gradual rollout," Thornton said. "We're going to concentrate on our major source markets for Hawaii first."
David Koch, president of Starr Seigle, said the marketing campaign will stress the difference between the Hawaiian Springs brand and its competitors.
"When you hear they're exclusively bottled at the source, that water comes out and it's naturally pure and ready to go," Koch said. "The competitors' water, although it's Artesian as well, because of impurities needs to go through reverse osmosis which is basically getting all that stuff out through dehydration."
Hawaiian Natural, whose stock ceased trading as a separate company today, had been receiving financial assistance from Amcon over the past year while it waited 13 months for the deal to close. The merger had been hung up by other Amcon transactions.