The bottle water market is peculiar. For a very simple reason: every one has a water dispenser at home. This is the unique market in which your main competitor is more or less free and settled in mostly every house in the world. Combined to a purchasing power crisis, it becomes increasingly more difficult to perform.
Main actors in this field are strong worldwide groups: Nestlé Waters, Danone Eaux France and Neptune. A huge work had been done to boost the whole category from all competitors: category management, merchandising and promotion. Even if the whole market increased by 1.7% in terms of litters sold[1] between 2005 and 2009, national brands such as Evian or Vittel were decreasing.
Strong communication targeting health-concerned people were broadcasted telling that drinking mineral water is not the same thing than drinking water from your personal dispenser and is not even the same thing than “eaux de source”.
From 2010 Danone run a communication campaign during the summer. It settled what they called “Hydrastation” in some very visited places, such as Gare de Lyon. Videos were shown with doctors talking about the fact that 62% of your body is made of water and you have to drink 2L per day. It also gave free glasses of their 4 brands: Evian, Volvic, Badoit, Salvetat.
Merchandising represents a big issue. Waters shelves are known as the worst shelf of supermarkets. It is messy, non-visual and people don’t stay much longer on it. Industrials and distributors decided to develop the attractiveness of this linear. For example, in 2011, both Carrefour and Intermarché developed with Danone “shelf dressing” with a color code to distinguish still, sparkling and flavoured water. Department supervisors were asked to fulfil the linear twice as much as in the past to avoid the messy appearance. Like Coca Cola, industrials and distributors found partnerships to develop “cross merchandising operations”: additional shelves on others linear, such as in the baby food for Evian or in front of checkouts during summer.
Purchasing power is still an issue. That is the reason why they decided to impact the tagged price thanks to a high level of discounts from “hard selling” (15% more free on this bottle) to “BOGOF” (By One Get One Free). From September 2011 to September 2012, nearly 30% of the volumes were sold hardly discounted (more than 40% discount) for Danone and more than 40% for Nestlé[2].
– Charles Vercoustre
[2] Source : IRI Info Sensus, Oracle, Septembre 2011-Septembre 2012, Total Hyper et Super marchés
[1] Bottle Water in France, Data Monitor, 2009
The Skemarketeers 