Each European generates about 190 kg of packaging materials per year, which will increase to 260 kg by 2030, half of which is plastic. The European Union is actively working on its circular economy solutions, based on the secondary use of materials. A number of Bulgarian manufacturers are yet to face the challenges of recycling. But there are also those who are prepared for them 6 years before the official introduction of the European requirements.
“Baldaran Spring” is a good example of a business model that has already implemented European requirements before the deadline. Thanks to its partnership with Lidl Bulgaria, the company was able to reach top positions in water supply in the country. In parallel, Devin’s spring, table and sparkling spring water bottling plant now boasts the production of bottled water in bottles that contain 30% recycled material. In addition to caring for nature, this also shows a vision for the future development of the business.
How is this achieved and what is the balance sheet of four years of cooperation with Lidl Bulgaria, which began at a challenging time for the Bulgarian company? We talk about the topic with Valcho Rusev from the “Stock Supply” department in Lidl Bulgaria and the executive director of “Baldaran Spring” AD Tanya Stoimenova.
Mrs. Stoimenova, how does a family company manage to achieve top results in terms of volume sales in such a competitive business as that of bottled water in our country?
“Baldaran Spring” is a 100% Bulgarian company, and we just recently turned 10 years old. Our plant is located in the city of Devin, and according to the latest data, we are in third place in terms of realized volumes of bottled water in the country – in 2023 alone, we shipped over 85 million liters of bottled water. It requires a lot of work and dedication, a lot of investment and constant improvement in what we do. The challenges are many, and the competition is great, mainly from multinational companies. When we started in 2014 we had two production lines for bottling spring and sparkling water in sizes from 0.33l to 19l, and at the very beginning I still remember how our production colleagues would manually stack the stacks and tubes on pallets at the end of the lines. For the first year, we realized sales of 7.6 million liters. With a lot of drive and persistence, we managed to expand production, invested in a palletizer for our small cut line, and in 2018 we launched our premium series “Diamond Line”, which is aimed at the HoReCa segment and has achieved exceptional sales success to this day. Thus, in 2019, the efforts and tireless work of all colleagues brought the company to the 4th place in sales with over 30 million liters of sales for the year.
Source: Lidl
The CEO of Lidl Bulgaria, Milena Dragiiska (right), got acquainted live with the investments made in the “Baldaran Spring” plant after the start of the partnership with the retail chain
But then the covid pandemic happened to all of us. In just one month – in April 2020, we were in a starting position as sales – close to those of the first months of our activity
Then, in the spring of 2020, I will never forget the call from Mr. Valcho Rusev from Lidl. For me personally, and I believe for our entire team, this was a turning point in our history. His call was prompted by the idea of partnering to produce spring and sparkling spring water under Lidl’s own brand – Saguaro. So, in just four years of working together, we were able to significantly surpass our 2019 volume achievements and reach that 85 million liters per year that we marked in 2023.
Mr. Rusev, what impressed you with this Bulgarian manufacturer, to whom you entrusted an extremely responsible task – the production of your own brand of water?
“Baldaran Spring” is a relatively new partner of ours, with whom we began to work for the supply of spring water under our own brand of Saguaro waters. Saguaro spring water was the first such own brand that Lidl Bulgaria put on sale. It was a great success for us. The professional attitude, foresight and dedication to the work of our partners was decisive for our choice. We have jointly developed new products and expanded the range, currently supplying Lidl own brands spring and table water 0.5l, 1.5l, 11l, the sport bottle spring water 0.75l, sparkling spring water 0.5l and 1.5l as well as many other promotional items. There were challenges along the way that we dealt with, but it was then that we saw the quick and appropriate reaction of our colleagues, who proved that we were right to trust each other. For example, in the first summer of our cooperation, it turned out that the demand for water in our stores was greater than the predicted growth for the summer season. This logically led to the need to expand production facilities. In the second summer, the new assembly line was running at full speed, but the trucks started to fall short, and the road to Devin has its quirks, as you know. “Baldaran” again took a far-sighted approach and promptly prepared for the summer of 2023 by renting a warehouse near the city of Plovdiv, which they presciently filled with water. Thus, to this day, they avoid any logistical problems and manage to meet the needs of our already 127 stores in the country.
Source: Lidl
Valcho Rusev and Tanya Stoimenova talk about their joint work.
What are the results of Baldaran Spring’s partnership with Lidl?
Tanya Stoimenova, “Baldaran Spring”: The effect for us can be measured in all aspects of the company’s development – as a producer, taxpayer and employer. Thanks to Lidl, we have grown to a size that we had planned for well ahead of time, we have purchased the most modern machinery and equipment from leading European companies. We have expanded our production and capacity significantly. We have a growth of over 80% per year in sales to Lidl Bulgaria for the last three years. We allowed ourselves to invest over BGN 15 million in equipment and infrastructure, we increased the production capacity of the company almost threefold. More recently, new machines for the production of large cuts have arrived at the plant – the 6l and 11l cans, which will increase their bottling capacity two and a half times. Another important investment of ours is the solar park, which has been producing energy since last year. It has a capacity of 2.2 MW and is the largest in Bulgaria among bottled water producers.
We expanded our warehouse base in Devin with a smart warehouse that can store up to 3000 pallets, we also rent a buffer warehouse in the Plovdiv area to facilitate logistics to Lidl.
In other words – we are acting boldly and with scale in our development. The partnership gives us the certainty that we are creating a sustainable business in a region like the Smolyan region, known for high unemployment and depopulation. We have provided more jobs in our production base and in our logistics, but above all – we provide security and predictability for our business and people. I can summarize that this is the Lidl effect for Bulgarian producers.
Valcho Rusev, Lidl: From our side, this partnership is also highly appreciated. Together, we manage to provide the necessary quantities of water for customers in our stores, guarantee high quality at an affordable price and make these supplies secure and predictable. Here is the place to note that Lidl’s requirements for companies that produce the chain’s own brands are extremely strict, higher than those for manufacturers of branded assortment. This makes sense as we stand behind these products with our name. Our first requirement for “Baldaran Spring” was that they receive the international IFS Food certificate, which is a guarantee for the safety, quality and origin of the product at all levels – from production to the final stage of consumption. This required investment and reorganization on their part, but it showed the responsible attitude towards us as a partner and towards the user as an end customer. These are important points that prevailed in our selection as a strategic partner and in our latest project with the use of recycled plastic in the packaging of bottled water. “Baldaran Spring” is the company that Lidl Bulgaria trusts for the production of the first products under its own Saguaro brand, the bottles of which contain 30% recycled material. The embedded recyclate is produced from the plastic bottles collected within the pilot project of the packaging return chain. We currently put 30% rPet into the Saguaro 0.5l and 1.5l sparkling and spring water preforms, the Saguaro spring water sports bottle 0.75l, as well as Lidl’s 0.5l, 1.5l and 11l table waters, too produced by Baldaran. We believe this is the right way and we are working in this direction for our other own brand products as well. By putting bottles with recycled material back into the bottling industry in Bulgaria, we put the bottle-to-bottle model into practice.
Source: Lidl
Your cooperation was designated as a pilot model of the deposit system in Bulgaria. These are the words of Anna Larson, Director of Circular Economy at the European platform Reloop Europe, who visited the Baldaran Spring plant at the end of March. Why is recycling an important topic for society and companies?
Tanya Stoimenova, Baldaran Spring: This is a clear example of a working circular model, where repeated use of the same material leads to resource savings and lower carbon emissions. The bottle-in-bottle model is already happening and we are delighted that our partnership shows what the future will look like in terms of corporate and retail commitment to recycling. This was also noted by Anna Larsson, who congratulated us for already working in this way six years before the EU regulations in this direction came into force. We believe that we need to be prepared for the future much earlier and that the right way to produce is sustainable, which also includes responsible behavior with regard to resources.
Valcho Rusev, Lidl: The subject of recycling and sustainability is definitely a focus for Lidl. Our pilot project for placing machines for the return of plastic bottles and cans started in March 2023. Currently, such machines are in 20 stores of the chain in 14 cities in the country. A year after the launch, we report that the collected packages exceed 18.2 million. These are over 350 tons of PET bottles and over 75 tons of aluminum cans. If we look at the Lidl Bulgaria project, we will see the picture of the country dealing with the challenges of recycling. People are interested and definitely showing a responsible attitude on the subject of recycling. By partnering with a Bulgarian manufacturer like “Baldaran Spring”, we show in practice that the European regulations here can act effectively and years earlier. This also makes us optimistic about the future deposit system when it is introduced and when all drinks in plastic bottles are recycled and reused, put into new packaging. It is the responsibility of business and society to get there together.
