Wednesday 22 November 2017

John McGee: Tapping into water market was a marketing triumph

'Luxury water - yes, it is a thing - may be the next frontier in the $184bn global bottled water market but it's also a practical first-hand introduction to the power of marketing and how the industry has managed to pull off what is often described as the marketing trick of the century' (stock photo)
'Luxury water - yes, it is a thing - may be the next frontier in the $184bn global bottled water market but it's also a practical first-hand introduction to the power of marketing and how the industry has managed to pull off what is often described as the marketing trick of the century' (stock photo)

John McGee

Earlier this year, social media channels temporarily lit up with consternation after people posted pictures of bottles of water that could be bought for just £80 a throw in the upmarket Harrod's department store in London. But this wasn't just any old common or garden tap water: it was sourced from melting Norwegian icebergs, some of which were as old as 4,000 years.

Such was the digital opprobrium that was unleashed, that the manufacturer of Svalbardi received more PR than it could ever have dreamed of while at the same time demonstrating that there's money to be made from global warming by those with questionable levels of chutzpah.

Svalbardi, however, is by no means the most expensive bottled water on the market. Kona Nigari, the brand of water that is sold in Japan, for example, retails at $402 and comes from deep under the Pacific Ocean and somewhat optimistically promises those who drink it, better health, better skin, less stress and less weight.

Luxury water - yes, it is a thing - may be the next frontier in the $184bn global bottled water market but it's also a practical first-hand introduction to the power of marketing and how the industry has managed to pull off what is often described as the marketing trick of the century.

When Ballygowan's founder Geoff Read, for example, launched the Newcastle-West bottled water on The Late Late Show in 1981 many people thought he had taken leave of his senses. As the audience sniggered away, Uncle Gaybo asked him who in their right mind would buy water in a bottle?

Well, the Irish, as it turns out.

Figures compiled by Kantar Media's 2017 Republic of Ireland TGI study show that 63pc of all Irish adults, or 2.4 million people, drink bottled water. Although this figure has dropped from 71pc in 2015 and 67pc in 2016, the number of people who actually drink it more than once a day has increased from 18pc two years ago to 22pc today. In other words, over 800,000 people drink bottled water more than twice a day, according to the Kantar figures.

The Irish bottled water market is estimated to be worth in the region of €220m a year, of which around €178m is attributable to the off-trade. The balance - €43m - is sold through pubs and clubs, according to figures compiled by Euromonitor.

Not surprisingly, Svalbardi is not the bottled water of choice for Irish punters. That titles goes to the Britvic-owned Ballygowan, which is imbibed by 44pc of bottled water drinkers according to Kantar Media.

It is followed by the Coca Cola-owned Deep River Rock on 29pc, Volvic, which is owned by Danone, is on 22pc and the C&C-owned Tipperary on 19pc. Shoring up the top five brands consumed is another Danone brand, Evian, on 14pc, according to Kantar.

There are, of course, other indigenous brands in the marketplace and some of these have also developed export markets in addition to supplying private-label bottled water to the multiples.

Some of the bigger Irish brands include the likes of Rocwell, Kerry Spring, Glenpatrick and Celtic Pure. But none of them have the same marketing resources or advertising budgets as Coca-Cola or Danone and, in a highly competitive category, there will always be a strong correlation between their share of market and the amount they invest in marketing and advertising.

And marketing has always been central to the success of bottled water. Not only does it sell convenience, aspirations and beguiling images of pristine fjords and snowy mountain-tops, but it positions bottled water as a solution to a problem that nobody really has. In doing so, bottled water companies don't position their product as an alternative to perfectly good tap water but rather as an alternative to unhealthy soft drinks that consumers might otherwise buy.

And therein lies the power of marketing, folks.

But if you are still not convinced that the market is as much about marketing and brand sorcery as it is about product integrity and quality, then there's one more brand you might consider.

Diamond Edition Beverly Hills, 9OH2O is, I kid you not, a "craft water" which is sourced from the "pristine springs" in the mountains of Northern Californian and a limited edition bottle can be snapped up for just $100,000 a pop. It should be pointed out, however, that the bottle comes with a white gold bottle cap encrusted with white and black diamonds as well as four engraved Baccarat crystal glasses. For those who fall for the marketing claptrap, it's the ultimate in luxury water.

But you need to move fast if you want to get one for Christmas because, like the age-old Norwegian ice-bergs in a bottle of Svalbardi, once they're gone, they're gone.

Sunday Indo Business

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