Much more than water
When Vítor Hugo Gonçalves arrived at Água de Monchique as CEO in 2015, the objective was “very simple”: to turn a company with enormous potential, but highly unprofitable, into a profitable enterprise.
The company’s strategy was limited to being complementary to other water factories owned by WaterBunkers SGPS Group. In 2009, the decision to invest in Água de Monchique had been purely operational, since the cost of transporting the water unit represented approximately 17% for the WaterBunkers Group. The company produced white-label brands for various distributors, and its objective with this acquisition was simply to supply the southern region of Portugal.
At that time, for the company and the market, “water was water“! Vítor Hugo wanted to reverse this situation and initiated a strategy to differentiate his product. The water had a curious characteristic: it was probably the most alkaline water in the world. Could this characteristic be sufficient to differentiate it in the market and make it the consumers’ preferred choice?
“The rebranding process based on this difference effectively arose from the need we felt to bring the brand closer to the consumer and establish a more emotional connection with them. We wanted to revitalize the brand, highlighting its distinctive characteristics. It is not about drinking water, but rather about drinking Monchique.” – states Vítor Hugo.
Everything seemed to be going well, but in a meeting with a major distributor, the CEO was confronted with an unexpected proposal: “I do not want to buy at that price because your product does not move, it does not interest us. I will only buy if the price is 20% lower.“
How should he respond? Yield to the demand or simply refuse the proposal?
