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IDS

In 2003 Salford recognised the Ukraine as a high growth market, particularly in the consumer goods sector where several segments had very low penetration rates. In line with its strategy of acquiring market leaders Salford acquired the number one Ukrainian mineral water producer IDS in 2003. At the time of acquisition, mineral water consumption was only 19 litres per capita versus an EU average of 95 litres per capita. Since then it mineral water consumption in Ukraine has steadily grown.

Although at the time of the acquisition IDS was the market leader it was starting to lose market share in its core sparkling brands, was weaker in the still water segment and profit margins were declining due to inefficient product portfolio and cost management.

In 2004 Salford initiated a “house of brands” mineral water strategy (in conjunction with an in depth strategic review completed by McKinsey). Under this strategy Salford identified growth opportunities in the still segment and the premium segment in Ukraine and measures to increase market share in the slower growth sparkling segment. To capture the opportunity in the still segment Salford acquired the number one still brand in the Ukraine, Morshinska, and fully integrated it into IDS. In order to capture the premium segment, Salford initiated a re-launch of Borjomi in the Ukraine with great success. With respect to the sparkling segment, brand re-launches and positioning were undertaken. Most recently, Salford has acquired 64% of the production in the Truskavets (one of the top three “origins of denomination” in the former Soviet Union) region of Ukraine and is actively distributing Truskavets through its Ukrainian and Russian distribution networks.

In addition to achieving top line revenue and market share growth over the past 3 years, Salford has also significantly improved the operations of IDS through measures that include aggressive cost cutting, streamlining distribution through a mix of direct and indirect distribution, discontinue non core products (beer and soft drinks) and improved production and capacity

Today the IDS Group is the undisputed leader in the Ukraine with a market share the surpasses the top three producers (including Coke and Pepsi combined)