Elodie Fleury's late grandfather used to rave about the sap water on his annual trips to Quebec from France.
Not the sap itself, or the syrup, but the water byproduct at her father's backwoods sugar-shack operation southeast of Montreal. He loved drinking it so much, Ms. Fleury says, that when she and her brother Mathieu were flying back from their grandfather's funeral three years ago, they decided to make a business of his peculiar preference. "We came back thinking about him and his taste for the water and said, 'Let's try to do something with it.'"
The idea has led the siblings, who are both in their late 30s, into a most unlikely venture. Backed by local investors and lenders – including provincial government agency Investissement Quebec – they launched Maison Eau Matelo, a fledgling Montreal-based beverage company that makes De L'Aubier, a high-end bottled water derived entirely from maple tree sap. The siblings have placed their product in dozens of upscale hotels, restaurants and high-end food stores throughout Quebec, and they won a prize for best water at the Global Bottled Water Congress Water Innovation Awards in Barcelona in October. They have had expressions of interest from as far away as Britain and Dubai.
Is this the making of a hot new made-in-Canada product? Not just yet. There are countless examples of startups in the food and beverage business that have prospered and gone global, but many others that haven't. The Fleurys are still early in the game – they bottled 5,000 in a test run last year, giving much of it away, and this first 'official' year they produced 25,000 – and as they have already discovered, building demand can be a Catch-22.
Distributors have been reluctant to take the product national or international until the company shows it's a hot seller. But becoming a hot seller is harder when you don't have distribution.
"Let's just say we knocked on a few doors but so far the larger ones have turned us down on the basis our water was too 'specialty' and not famous enough yet," says Ms. Fleury, who by day works as a derivatives lawyer in Montreal. "The reality with distributors seems to be that they don't want to have to sell your product, they want it if it sells by itself to handle only the distribution from a 'logistic' standpoint. But it is just a matter of time before we find the right one."
As it turns out, sourcing and making the product is the easy part, thanks to Mathieu Fleury's experience as a beverage industry process engineer (he also works as a consultant). There's certainly an abundance of raw materials: a typical maple-syrup operation typically filters out and discards about 85 per cent of sap water (the byproduct, which is little more than pure water with low mineral content) before boiling down the concentrate to make syrup. Maison Eau Matelo pays 10 cents to 25 cents a litre to buy that wastewater , then it employs a third-party contract bottling supplier, which drives a tractor trailer up to syrup farms and runs a mobile purifying and bottling line in the back of the vehicle just metres away from the shack.
The total cost to the company is $1 to $2 a bottle. "We're trying not to say 'waste' because it's not sexy – especially when you're selling it for $5 a bottle," Mr. Fleury says. The operation has the capacity to produce 15,000 to 20,000 bottles a day, and he sees no trouble meeting the goal of producing 250,000 bottles in the 2013-2014 season, with sales managers in the United States and the Middle East expected to come on board.
Despite its source, the product is neither sweet nor does it have the slightest taste of maple. The pair market the fact that the product, unlike any other commercially available water, is derived from plants, and given its low mineral count, it has a "velvety" feel on the palette. "It's very soft, very silky, full-bodied, very heavy in the mouth," Ms. Fleury says. It also comes in a slick-looking bottle.
And that's the key challenge for Maison Eau Matelo: it's peddling water, a product that doesn't have the same connoisseur base of wines and spirits, with health benefits aren't much different from other bottled waters, some of which cost a lot less and have far more clout in terms of distribution and shelf space. But Aparna Labroo, a marketing professor with the University of Toronto's Rotman School of Management, says the Fleurys have one big advantage: the novelty factor. "Catching attention is a good thing," Ms. Labroo says.
Their product has an interesting and (outside Quebec) exotic story to tell – as well as a unique production process, which the Fleurys are attempting to patent – and some compelling attributes. It is not sucked out of the ground by a machine but by a living organism, it isn't chemically purified and it comes from a renewable source, giving it an aura of "novelty, nobility and renewability," as the company's outside brand strategist Marie Noel-de-Tilly puts it.
It can be sold as a seasonal product, a bit like Beaujolais wine, and it's marketed as the bounty from the year's harvest with a tag line "the new water has arrived" and packaged in a branded wooden box. The plan, says Ms. Fleury, is to target customers between the ages of 30 and 60, with incomes above $50,000 who are "fine-dining customers, aficionados of natural foods and wines" who will purchase the water for fine dining experiences and special occasions.
While Ms. Labroo says many customers are likely willing to give the product a try, she adds: "Novelty on its own won't be enough. Making them curious enough to want to buy is a good thing. But the product has to speak for itself and they should want to come back again and again."
Mr. Fleury is certain the product will do well. Given his experience in the beverage industry, including working with water sellers such as Nestle and Pepsi, "I see the value in their eyes of a good water source. We're trying to show the world there's a different product, a different water."
An earlier version incorrectly stated expected production for 2013-2014. This online version has been corrected.