Cristilia Premium Water

Source: Food and Drink Digital

Date :02/07/2007 10:55:24

Hurricanes and overseas supply chains are just a couple of the issues that Puerto Rico-based Cristilia Premium Water must routinely conquer

Written and produced by James Buchanan & Michael Magno

It may be a lovely spot in the Caribbean, but operating a bottled water company on the island of Puerto Rico comes with more than a few unique challenges — not the least of which are hurricanes.

According to David Virginia, CEO of Cristalia Premium Water, when large storms are descending upon the island the company has to do its best to button down its production facility located near the city of Ponce.

“We also will send our folks home before a storm so they can take care of their families,” he says. “We shut down during the storm, and then about 12 hours later — on average —after it passes, we are back up and running, depending on how big the storm was, and how long it takes to restore power, and so on.”

Beyond the risks posed by hurricanes, Virginia says his company must always take into account that its supply chain is international in scope as a consequence of its island location.

“We have to be concerned with ocean freight for a number of the supplies we rely on, which means that since we use a just-in-time inventory system, we really have to pay attention to how we bring these things in,” he says. “You need to be sure you have enough quantity to meet your need because it takes a certain amount of time to get it.

“Also, to deal with these issues effectively means you have to develop a certain amount of expertise - because you often have to deal with them yourself. I don’t know if it makes you any better or worse, but you have to be fairly self-reliant and develop a wide array of expertise.”

By way of example, bottles come in from Florida and the Dominican Republic (their gallon size bottles are made in Puerto Rico), labels come from the U.S. mainland, and caps are sourced from as far away as China and Bolivia.

He goes on to add, “These are things that bottlers in the states don’t even have to consider. We take it for granted that storms will come through, and we prepare for that.”

Virginia describes Cristalia as a Puerto Rican brand of premium bottled water that has been through a couple of changes since its earliest days. In 1986, the company was founded by Salvador “The late Chiri” Vassallo. who then sold the company three years later to the Pepsi Cola Puerto Rico Bottling Company.

During the time the company was owned by Pepsi some improvements to the production process and quality control were introduced. Then, in 1998, Cristalia was sold to Virginia and a group of investors.

Since then, Virginia has managed to grow the company to where it has attained most favored vendor status for many of its clients.

“We command one-half of the shelf space in the retail outlets in Puerto Rico,” he says.

“We have a full range of products such as a one gallon size, 1.5 liter PET bottle, half liter PET bottle — so you can see our package mix spread across those shelves. We are also in the private label business for a number of schools, hospitals, banks, hotels, just a plethora of private labels, which is fairly unique for this business.”

The bulk of the company’s distribution is in Puerto Rico, says Virginia, but the company also manages some sales in the Virgin Islands and Tortola. The company also does the private label bottling for Gerber baby water, which is exported off the island.

According to Virginia, the water is pulled from four wells and one lake, which are all located near the company’s plant. Water from the lake is chlorinated at the source, and then de-chlorinated at the plant, where all of the water is run through the company’s unique filtration system.

The first step is referred to as multimedia filtration. This is where the water is passed through a number of multimedia filters consisting of silica, sand, and activated will carbon. These first stage filtering materials catch and filter out large particles of organic and inorganic materials.

Step two consists of coconut and activated carbon filtration. This filter, says the company’s website, removes any residual chlorine and many small particles of sediment. It also helps remove any odor and improve taste.

Step three is the five and 10 micron filtration system. This filter removes particles as small as 5 millionths of an inch.

Step four is the water softener system. These units remove calcium and magnesium, which are associated with hardness in water.

Step five is ultra violet light and ten micron filtration systems. The UV light system removes bacteria while the 10 micron system removes any remaining particles from the water softening process.

Step six is a reverse osmosis system, where the water is pushed through under pressure to remove any remaining organic materials such as viruses and bacteria. Nothing larger than a few angstroms in diameter is able to pass through.

Step seven is ozonization. Ozone is an oxidizing gas that kills any organic material and has the benefit of breaking down quickly to add additional oxygen to the water.

With all of this focus on the purity of the water, Cristalia is also inspected and certified by the Puerto Rico Health Department, the FDA, the US Army and a number of other agencies. Its products are also certified Kosher.

Self - reliance is also an attribute the company must practice with its labeling. Virginia says the company develops its own artwork and has its own graphic artist.

“It is also important for that person to have the experience and talent to focus the designs for a bottle label,” he says. “To do a private label for a 16 oz. bottle means you have to have an artist who can conceive of a design that works in that format, and then take the graphic and put it into a printable medium.”

“We also do the color separations so, when the designs are sent to the printer, the printer is ready to go and produce the finished product quickly,” he adds.

When looking at all that Cristalia has to do in relation to its private label work, meet its supply chain needs, and be ready for the eventuality of major storms, the company must remain very flexible and fast on its feet.

Virginia began his career working for bottlers such as Pepsi and Coca Cola, where he says that due to their size, those companies don’t have the ability to zig and zag as Cristalia can.

“They are also unable to do the small custom jobs that we do,” he says. “The line is too large and runs too fast. We can do an order for as few as 20 cases, which would cause an executive at Coke or Pepsi to choke over.”

During the company’s tenure under Pepsi there were a number of improvements made. However, after his leveraged buyout in 1999, Virginia says the equipment was not quite what he wanted it to be and many of the production processes were done manually.

“There was much older equipment that had to be replaced and the facility was aged as well,” he says. “Our goal is to move into a new facility in the next 12 to 18 months and add more automation to the line.”

Already he has installed a palletizer by F&K Logistics and altered much of the production line.

“We have gone from a manual to a highly automated process, which has helped us reduce our headcount by about 50,” says Virginia. “At the end of the day this helps drive the labor cost out of the equation and we have a more technology - oriented workforce to drive the line. I see the whole industry going that way. Fewer and fewer people will be in contact with the product.”

Sales have grown nearly four times since 1999, and Cristalia is now the leading local bottled water company in the Caribbean on a dollar sales basis.

But growth is still in the air.

First among Virginia’s growth plans for the company is building and moving into a new production facility that he says will increase the company’s production capacity by three to four fold.

He also wants to begin exporting to the U.S. through large retailers and says he has had discussions with Wal-Mart. Virginia also sees great potential in the Orlando, Fla., area where there is a large Puerto Rican population.

Expanding the product offering is also in the works, as he is looking at adding flavored waters to the mix.

“This is something you see quite a bit of in the states, but the Puerto Rican market tends to lag behind the U.S. a bit,” he says. “Flavored waters are in a beginning phase here.”