Nestlé and Danone fight for mineral water market in the country
Valor Econômico
In Europe and the United States a patrol against mineral water in plastic bottles has been making noise. Although they find space in the media, the noise of ecologists still hasn't been enough to make this billion dollar market shrink. The sale of mineral water in the countries of the Western Europe, for instance, should end the year with the sale of 57.7 billion liters, and growth of 1.47% - according to Euromonitor. In the USA, according to the same institute, 2009 should end with a volume 0.81% lower than last year. In spite of that, they will be 30.6 billion liters up to the end of December.
Around here, the still humble market of 2 billion liters (Nielsen) has been attracting world giants of the sector such as Nestlé and Danone - in an attempt to escape the saturation of the American and European markets. The two multinationals are the main players in the dispute for the mineral water market that, according to Nielsen, grew 10% in volume and 14.7% in sales in the first nine months of the year.
"The Brazilian drinks, on the average, 20 liters of mineral water a year. In Argentina, that average is 70 liters; in Italy and France, 150 and 160 liters", says Edson Ebizawa, Director of Nestlé Waters in Brazil. The company that bought a spring in Águas de Santa Barbara last year, has invested (including the acquisition) R$ 70 million (US$ 40.7 million) in the facilities and in the launching of the Pureza Vital brand, which replaces Aquarel in the States of South-East, where the company limits its operation. The Nestlé Mexico manufacturing line was brought to Santa Barbara and the marketing of new brand was commenced in September. The new spring is the biggest in flow compared to the other two properties of the company in Brazil (São Lourenço, in the south of Minas Gerais, and Petrópolis, in Rio de Janeiro). "The goal is, in one year, to become the leader in water in Southeast region", says the Director. In order to do so, the company, that owns the famous Perrier and Panna brands, will have to run over Coca-Cola Crystal, leader in São Paulo, with 27% of the sales. The brand, launched in August in Minas Gerais and in Rio, has 3% and 1% of sales in those States, respectively.
On its turn, Danone, owner of brands such as Evian and Volvic, wants to repeat the success had with the Activia yoghurt with its Bonafont water, which is only sold in the State of São Paulo. And in order to do it, it is launching the Experiência 15 Bonafont challenge, which invites people to develop the habit of drinking two liters of water a day. To take part in it, the consumer registers at the site of the brand and reports, during the following 15 days, how much water he or she consumed and the codes of the water bottles. The consumer gains the download of songs and receives SMS messages so as not to forget to drink water. The idea is to strengthen the concept that since Bonafont has less sodium, it would be lighter than the competitors which, therefore, facilitate the task of drinking the two daily liters recommended.
It is no coincidence that the three multinationals operating in the mineral water market in Brazil concentrate their sales among the States of São Paulo, Rio and Minas Gerais and also in disposable bottles (pet bottles). The Southeast concentrates 57% of the sales in the country and bottles of up to 5 liters dominate 80% of the sales - even though 60% of the market in volume is sold in 20-liter gallons, and home delivery.