Sigg, the little company with the big brand

CHICAGO (Reuters.com) -- A company doesn't have to be big to go global, but it helps to catch the right wave.

Up until a few years ago, Sigg, a Swiss aluminum water bottle maker, was just a fledgling manufacturer with roughly $1 million in sales and limited distribution in  European markets. It's still a small company with only about 100 full-time employees and a single production plant at its headquarters in Frauenfeld, Switzerland, a town some 30 miles north of Zurich.

Yet today Sigg bottles are cropping up in some 40 countries. In the U.S., they can be found everywhere from major retailers like Whole Foods to local yoga studios.  Fashion designers Donna Karan and Michael Kors have created one-of-a-kind designs and the Sigg bottle has a place of honor in New York's Museum of Modern Art.

With apologies to Malcolm Gladwell, Sigg appears to have reached a tipping point in recent months. The bottles are positioned as environmentally-friendly products over single-serve, throw-away plastics. A recent focus on chemicals leached by some of the plastics used in some competing products may also bolster Sigg's place in the eco spectrum.

These are the market conditions most small companies would kill for.

"It's really a perfect storm," says Steve Wasik, the branding expert installed as Sigg's U.S. president in September of 2005. Wasik, an American whose background includes stints for Naya water, Chanel and Cadbury-Schweppes, became Sigg's global CEO in January.

Fashion accessory

The company's momentum has been driven in part by behind-the-scenes muscle. In December 2003, Riverside Co., a U.S. private equity firm purchased Sigg from Afinum, a German fund manager. The price wasn't disclosed. With about $2 billion under management in industries from recreational boating to hospice care, Riverside bills itself as "the largest private equity firm investing in premier companies at the smaller end of the middle market."

Wasik and his backers knew that Sigg had the potential for growth. But they needed to create broader brand recognition for the product, which had little cache beyond hikers and other outdoor enthusiasts.

"We saw that it could be more than a functional product," Wasik says. "We saw that it could be a fashion accessory."

He began with market research, sending Sigg bottles to a host of test users and asking them to record their experiences in personal logs. Before long, the company was evolving beyond its narrow role of manufacturer and knocking on the doors of specialty retailers, hosting design contests and developing new channels of distribution.

In many ways, Sigg still operates like a small company. Wasik, who won't discuss financial details, says he has not pumped a lot of money into traditional marketing.

Outside of limited print advertising, the company relies primarily on public relations campaigns for product placement and alliances with environmental groups to build consumer awareness.

Production remains under tight control; the single Swiss factory churns out some 100,000 bottles a week. Sigg's pricing is tailored to an upscale image at about $20 for the popular 20-ounce size. Reusable plastic bottles can cost half as much.

Of late, the company has had to turn down calls for new business, Wasik says. Meanwhile, customers like Whole Foods have had to contend with sporadic deliveries, due to tightening supplies of product.

"There have been some instances we have heard of lately where demand has exceeded supply," confirms Ashley Hawkins, a spokeswoman for the Austin, Texas-based organic foods grocer, via email.

On May 1, Wasik made a public appeal to customers, asking them to remain patient, saying "I am sure most of you are aware of the current challenge we face."

Riverside is not complaining. It won't disclose specifics on Sigg's sales but says they are somewhere between $30 million to $100 million and growing at more than a double-digit pace.

"We're not in a hurry to make decisions," says Tony Cabral, managing partner for Riverside Europe, when asked about the firm's exit strategy. "We have absolutely no pressure to sell this."

(Deborah Cohen covers small business for Reuters.com. She can be reached at smallbusinessbigissues@yahoo.com)