|
By
Jennifer Lee
July
2004
www.Water-Stocks.com, www.BeverageStocks.com
Water,
the oil of the 21st Century as it’s been heralded, has seeped
into the global consciousness and established itself as a precious and life
embracing resource. With 1.1 billion people currently functioning
world-wide, without access according to World Bank figures, the request for
access to clean, fresh water is on the rise.
In
the
U.S.
alone, on a volume basis,
bottled water ranks as the second largest commercial beverage, surpassing
beer and coffee, if one can believe it. These statistics come to us from the
Beverage Marketing Corporation’s report, “Bottled
Water in the U.S.”
Knowing
where your water is sourced from, has become a public preoccupation of
sorts, with Coke’s Dasani recently in the news facing allegations, for
having used tap water taken from Sidcup, an area outside of London, England.
Further, echoes of Dasani containing twice the legal limit of bromate sent
the brand into some turbulent waters, hurting its public reputation
immensely. In a market where consumers are starting to pore over what
minerals and trace elements are present in their water, a blow like this can
prove to be a sinker.
With
top brands carving up the international marketplace, companies like Coke,
Pepsi and Nestle would have a lot to say about the success of their product
lines.
Nestle,
for example, first dove into the water business back in 1969 “with a 30%
stake in the owners of the Société Générale des Eaux Minérales de
Vittel,” according to the company’s site. Quite an early start in the
game, all things considered and since then their bottled water business has
taken off, especially in the
U.S.
which is the fastest
growing market for their products. Head of Investor Relations, Roddy-Child
Villiers, reports Nestle Waters has “outperformed the market and grown in
the double digits over the last few years.”
Nestle
Waters is “established in 130 countries and markets about 70 different
brands,” according to the company site. The bottled water portion of their
product lines also accounts for 9.2% of their sales. This is not a bad
share, considering they market everything from baby food to pet care
products to breakfast cereals.
Though
Nestle sells their water products in many countries around the world, Child-Villiers
comments that it’s two Nestle branded waters, “sold in 30 countries
represent 10% of total water sales.” Those brands being Nestle Aquarel and
Nestlé PURE
LIFE
, with the latter
launched in emerging markets such as Pakistan, Brazil, Argentina, Thailand,
the Philippines, China and Mexico, as well as in the USA. Child-Villiers
furthers, “we’ve chosen Nestlé
PURE
LIFE
as a product, to build
on awareness of Nestle as a nutrition company in emerging markets.”
Nestle
Aquarel on the other hand, is available in 10 different countries in
Europe
, using a multi-source
concept, aiming to satisfy “new consumer expectations, especially for
water with a low mineral content that the whole family can drink,” the
company cites.
As
an example of just how powerful the sway is to market and promote new
healthy ways of living and lifestyles, even McDonald’s introduced a new
‘Go Active! Adult Happy Meal,’ that comes with a salad, a bottle of
water and some information on how walking can benefit your life.
You
know if McDonald’s is jumping on the bandwagon, it’s a pretty good
indicator that there is room for expansion on the marketing front.
Nestle
also features its water at the Tour de France each year and the prospects of
tying in branded water with specific sporting and public events, presents an
exciting possibility for companies to establish their brands in the minds of
specific interest groups.
Nestle
Waters has seen a 9.1% organic growth in its bottled water sector in 2003,
according to Child-Villiers, “rising to CHF 8,066 million.”
For
a resource that’s becoming increasingly scarce, it’s certainly not going
out of style, according to some of these figures. Even smaller companies,
such as Minerva’s Mediterranean Deli, located in
Vancouver
, B.C.,
Canada
have begun launching
their own line of bottled water. Company owner Mike Georgiopoulous comments
that people like it, “because it’s fresh all the time and we know the
place where they bottle it.”
He
furthers that 2 years ago before they started bottling their own water, they
were selling 15 cases (24 bottles per case) every week, “now it was
doubled to 40 cases every week. People prefer it because we bottle it fresh
every week.”
Perhaps
there’s no better sign of the times than the bottled water industry’s
following of the three W’s: just who put the cap on your bottled water,
when and where?
Jennifer Lee
Jennifer
Lee has a degree in English Literature from the
University
of
British
Columbia
.
She holds a publishing certificate from
Simon
Fraser
University
and has worked at both Vancouver and Western Living magazines, where she
began her career as an editorial intern. She has worked as an editor in
countries such as
Zimbabwe
and
South
Africa
,
producing books, newsletters and editing various quarterly magazines on a
variety of international development related topics. In
South
Africa
,
she worked to help produce a bi-weekly newsletter for the Institute for
Security Studies on crime and corruption headlines which appeared in all
national and provincial papers. Prior to working in southern
Africa
, she wrote articles
for DMR Consulting, on mergers and acquisitions taking place in the market
during 2001. She now produces a quarterly publication at the
University
of
British
Columbia
and works on the side as a freelance writer.
Disclaimer: www.InvestorIdeas.com/About/Disclaimer.asp
©Copyright InvestorIdeas 2004
|
