A Survey of The high

A Survey of The high

-
-
end bottled
end bottled
water industry
water industry
Presented by:
Jennifer Page
Jeff Morgan
Monica Cullen
Marketing 535 final project.
Summer 2005
History of the Industry
History of the Industry
1
7
6
0
1
8
4
5
1
8
5
5
1
8
6
3
1
9
7
6
1
9
8
0
1
9
9
9
1
9
9
7
1
9
6
3
France
USA
Historical Growth
Historical Growth
Estimated Wholesale Dollars of the US Bottled Water Industry
$0.00
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
YEAR
D
o
l
l
a
r

A
m
o
u
n
t
s
Non-sparkling
Domestic Sparkling
Imports
Total
Source: International Bottled Water Association
Current Perspective
Current Perspective

Bottled water is a highly competitive $9.8

Bottled water is a highly competitive $9.8
billion industry
billion industry

Has become a battle of the giants

Has become a battle of the giants

Coke, Pepsi and Nestle control 50% of the

Coke, Pepsi and Nestle control 50% of the
market
market

Only high end for differentiation with a

Only high end for differentiation with a
majority of the market driven to the low
majority of the market driven to the low
-
-
end
end
Differentiators
Differentiators
5 basic types of water
5 basic types of water
1.
1.
Artesian
Artesian

well water
well water
tapped into aquifer
tapped into aquifer
2.
2.
Mineral
Mineral

contains natural
contains natural
minerals
minerals
3.
3.
Purified
Purified

processed,
processed,
treated, filtered municipal
treated, filtered municipal
water
water
4.
4.
Spring
Spring

from
from
underground spring
underground spring
5.
5.
Sparkling
Sparkling

Contains
Contains
carbon dioxide naturally or
carbon dioxide naturally or
added
added
Non
Non
-
-
Confidential Sources
Confidential Sources

Due to the
Due to the
many
many
differences
differences
companies
companies
use name
use name
or label to
or label to
showcase the
showcase the
source
source
Marketing Water Content
Marketing Water Content

Brands use mineral

Brands use mineral
content to
content to
differentiate their
differentiate their
product.
product.

Included in the label
Included in the label
TDS (total dissolved TDS (total dissolved
solids) solids)
pH (Percent pH (Percent
Hydrogen) Hydrogen)
Penta Water boasts that
its the worlds cleanest
water with no mineral
content.
Packaging
Packaging

Packaging is important for high

Packaging is important for high
-
-
end bottled
end bottled
water brands as differentiators
water brands as differentiators

Keys: allure of packaging and functionality
Keys: allure of packaging and functionality

Trying to build an image

Trying to build an image

a reason for
a reason for
consumers to spend a little more on water.
consumers to spend a little more on water.

Shape, size, color, type of cap, label and
Shape, size, color, type of cap, label and
materials are all used to differentiate.
materials are all used to differentiate.
Product Placement
Product Placement

Traditional advertising is
Traditional advertising is
often ineffective
often ineffective

High
High
-
-
end Bottled water
end Bottled water
rely on
rely on

creative
creative
marketing
marketing

Product Placements
Product Placements
in movies,
in movies,
television shows
television shows

Celebrity
Celebrity
endorsements
endorsements

Bottled water has been
Bottled water has been
used in gift baskets to
used in gift baskets to
celebrities at the Oscars
celebrities at the Oscars
Fiji
w
ater
on the
set of
Friends
Swimmer
Amanda
Beard with
Penta water
Co
Co
-
-
Branding
Branding

Cause Marketing
Cause Marketing

Another creative draw

Another creative draw
is to use the bottled
is to use the bottled
water for a cause.
water for a cause.

Ethos (recently
Ethos (recently
acquired by Starbucks)
acquired by Starbucks)

is committed to
is committed to
brining clean water
brining clean water
around the world
around the world

Athena
Athena

gives 100% of
gives 100% of
net profits to breast
net profits to breast
cancer research
cancer research
Water Couture
Water Couture

Much of the upper

Much of the upper
-
-
end water market is
end water market is
being decided in trendy bars and fine
being decided in trendy bars and fine
restaurants
restaurants

Water marketers are training
Water marketers are training

water
water
sommeliers
sommeliers

to match the perfect water

to match the perfect water
with the cuisine.
with the cuisine.

Matched by the classifications of the water:
Matched by the classifications of the water:
Bold, classic, light, effervescent or still
Bold, classic, light, effervescent or still

Water bars are springing up in the US
Water bars are springing up in the US

so far in New York and LA

so far in New York and LA
Local Market
Local Market

Water is distributed to the Portland market

Water is distributed to the Portland market
through: distributors, food brokers,
through: distributors, food brokers,
specialty distributors and water producers.
specialty distributors and water producers.

Brand availability in Portland of the top 10

Brand availability in Portland of the top 10
Rank Brand % of U.S. Market PDX Distribution
1 Aquafina 11.3% Pepsi-Cola Bottling Co. of Portland
2 Dasani 10.0% Coca-Cola Bottling Co. of Oregon
3 Poland Spring 7.8% Unavailable in PDX: Nestle regional brand
4 Arrowhead 6.6% Columbia Distributing (Nestle regional brand)
5 Deer Park 4.3% Unavailable in PDX: Nestle regional brand
6 Crystal Geyser 4.0% Mt Hood Beverage Co.
7 Ozarka 2.8% Unavailable in PDX: Nestle regional brand
8 Zephyrhills 2.6% Unavailable in PDX: Nestle regional brand
9 Ice Mountain 2.5% Unavailable in PDX: Nestle regional brand
10 Evian 1.7% Distributed through Coca-Cola
S
o
u
r
c
e
:

B
e
v
e
r
a
g
e

W
o
r
l
d

M
a
g
a
z
i
n
e
Local Retail
Local Retail

On the retail side of distribution, slotting

On the retail side of distribution, slotting
fees are more important than packaging
fees are more important than packaging

Retailers want to carry more variety in

Retailers want to carry more variety in
high
high
-
-
end, but there are low margins in
end, but there are low margins in
bottled water
bottled water

Due to the price sensitivity
Due to the price sensitivity

Also dominance by
Also dominance by
Dasani
Dasani
(Coke) and
(Coke) and
Aquafina
Aquafina
(Pepsi)
(Pepsi)
Local Bars and Restaurants
Local Bars and Restaurants

In a small sample of Portland bars, it

In a small sample of Portland bars, it
was found that consumer
was found that consumer
expectations dictate what is offered.
expectations dictate what is offered.

Requests usually are for
Requests usually are for
Acqua
Acqua
Panna
Panna
and San Pellegrino
and San Pellegrino

As demand for higher end water

As demand for higher end water
increases, it won
increases, it won

t be long before
t be long before
other brands are offered
other brands are offered
Recommendations
Recommendations

High
High
-
-
end bottled water still offer the greatest
end bottled water still offer the greatest
growth possibilities.
growth possibilities.

Premium bottled water entrants will need to

Premium bottled water entrants will need to
educate the customer on the water differences
educate the customer on the water differences
to alleviate some of the confusion.
to alleviate some of the confusion.

Bottled water manufacturers should find a niche

Bottled water manufacturers should find a niche
and stay with it.
and stay with it.
KEY: DIFFERENTIATION KEY: DIFFERENTIATION

Tremendous area for growth will be in the

Tremendous area for growth will be in the
mineral water segment.
mineral water segment.

Securing distribution channels will be highly

Securing distribution channels will be highly
important.
important.
A Survey of The high
A Survey of The high
-
-
end bottled
end bottled
water industry
water industry
Presented by:
Jennifer Page
Jeff Morgan
Monica Cullen
Marketing 535 final project.
Summer 2005