Jon Olafsson: He's 'a street boy, a maverick'. And his bottled Icelandic water 'really tastes wet'

Tessa Thorniley meets the media entrepreneur who couldn't stand the political heat but found a niche in the glacial spa
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The Independent Online

If you're going to get the cold shoulder, then Iceland is probably the best place it could happen. As head of his own broadcasting business, Jon Olafsson had fallen foul of the political elite and found himself marginalised in his own country. So he sold out, making millions of krona in the process, and disappeared from the scene.

But then he seized into what he saw was a niche in the upmarket sector of branded water. "It's the only water that really tastes wet," he says of Icelandic Glacial (IG), the brand he created with his son, Kristjan.

Although the brand is relatively unknown in Britain, a major distribution deal being signed this week will take it out of select upmarket outlets, such as Whole Foods and Fresh & Wild, and into the mainstream.

But bottling the ubiquitous resource and piling it on to shelves is not without its pitfalls, as Coca-Cola will testify. It had to withdraw its Dasani bottled water brand from the UK after a series of failures.

Fortunately for Olafsson, Iceland's glacial springs are considered more palatable than water from the Thames.

But surely IG is just about branding, and water is just water. So can Olafsson really taste the difference?

He says he can: "It is crispy and fresh with no after-taste."

At 53 he has the trim, fresh-faced, Scandinavian demeanour of a man significantly younger.

In his native country, Olafsson is a controversial figure .He sold his media empire, Northern Lights Communications, and moved to the UK in 2003 after, as he puts it, "a vendetta" waged against him by key figures in the upper echelons of Icelandic society, including the prime minister.

Today, he is back in the country with Icelandic Water Holdings (IWH), which produces IG, but he keeps firmly out of the public arena. His major focus is the US, which accounts for between 80 and 90 per cent of IG's annual sales.

Six months ago, the father- and-son team struck a big distribution agreement with Anheuser-Busch, the largest brewer in America and not known for cutting deals with fledgling foreign firms.

A research drive by an external consultant had revealed that the US drinks giant featured no bottled water brands in its vast portfolio. "We were very lucky," Olafsson explains. "Timing was everything. Six months earlier, they wouldn't have been ready. Six months later, they would have gone with someone else. They were already in talks with two other water companies."

As a result, IG's distinctive glacier-topped bottles of "super-premium" water are being sold through 200 of Anheuser-Busch's 730 distributors across the US.

That figure is set to rise significantly when the first stage of a new Icelandic factory, with the capacity to churn out 200 million litres of water a year (against the 20 million litres of existing capacity), comes online next year. Anheuser-Busch has taken a 20 per cent stake in IG, which helped to finance the forthcoming expansion.

Olafsson admits that breaking into the American market and the logistics of doing business there were harder than he anticipated. "Water has the highest barriers in the food industry. We had to be monitored for two years by the NSF [the public health and safety organisation] and need to have a licence in every state to sell our water.

"We won contracts at the start but had a major problem when we discovered that the international barcode system one that we were using on our bottles covering US and Europe had not yet been implemented everywhere. As a result, we lost millions and a major account a big setback, but so far the only one."

Olafsson is used to surviving setbacks. After all, Northern Lights Communications was a business he had built from scratch.

A true entrepreneur, he star-ted at the age of 14, organising a gig on a naval base outside the Icelandic capital.

He went on to launch the first commercial TV channel in the country, but the growing influence of his expanding empire made him enemies in high places.

When NLC was sold, it consisted of 15 TV channels, 12 radio stations, a record company and retailer (SkiFan), and two recording studios, as well as holding key film-distribution rights.

"It was an umbrella company that wouldn't exist today because of the competition rules. I built the business before the rules came in," he says.

Settling back into a sofa at the private members' club Home House, just around the corner from his London home and where Olafsson likes to conduct all his meetings, he adds: "I was a self-made man in Iceland with media interests and, with that, comes power. I refused to use my media as a power base, but they saw me like that and they didn't like it. I'm a street boy. I'm a maverick. I have been competing all my life with the big boys the government. In 2003, I decided I didn't need it any more and sold out."

Hence the move into the wet stuff and distribution deals now covering Canada, Mexico, the Netherlands and soon the UK.

Next February, Olafsson is flying to Japan to sign his first distribution deal in the Far-East.

The company prides itself on its environmentally right-on marketing. But how does it square shipping a non-local product halfway around the world? "The carbon footprint that we generate... is offset each year by contributions to environmental projects, thus far in Germany and Turkey," he says. A similar drive at rival Fiji Water, artesian water from the Pacific island, went further with a pledge to make its water "carbon negative" through energy-reducing projects and carbon credits.

As for the future, Olafsson, is thinking big. "Water is the most expensive liquid in the world at 69p for half a litre, more than petrol. I have been told that drinking-water supplies in the Middle East will be exhausted in 13 years.

"I see a time when we are sending container ships full of Icelandic water around the world, perhaps allowing our customers to bottle it and brand it under their own brands."

For now, though, his focus is on making a splash in the UK and Japan.