NESTLE TO OFFER PREMIUM BOTTLED WATER

Nestlé Adds Premium Brand in Still Water Arena
By ANDREW ADAM NEWMAN

DRINKING tap water is essentially free, but even during the economic downturn, consumers have sprung for bottled water, with sales in the United States increasing 6.7 percent in 2012, to $11.8 billion, according to the International Bottled Water Association. Americans on average drank 30.8 gallons of bottled water, 5.3 percent more than in 2011.

Ads for Resource, which are being introduced on Monday, are aimed at a stylish, higher income woman.

Now Nestlé Waters North America, the top producer with about a third of the domestic bottled water market, hopes to make a splash with a new brand it is introducing nationally, Resource.

Larry Cooper, group marketing manager for Resource, said the brand, which was introduced in Whole Foods in 2009, then Southern California in 2012 before its national rollout early this month, is intended for the most discriminating water drinker. (emphasis ours)

“We look at bottled water as being at a more value, mainstream or premium level,” Mr. Cooper said. “And we have incredibly good coverage in those first two tiers, but we haven’t in all these years had a premium entry to compete with the Smartwater, Fijis and Evians of the world,” he continued, referring to the Glacéau, Fiji Water Company and Danone Waters of North America brands.

While Nestlé owns premium sparkling water brands like San Pellegrino and Perrier, Resource is what it calls its first domestically sourced premium brand of still water, meaning noncarbonated and noneffervescent.

Nestlé Pure Life has a narrow lead in the bottled still water category, with a 10 percent share, followed by Dasani, a Coca-Cola brand, with a 9.7 percent share, and Aquafina, a PepsiCo brand, with a 9.4 share, according to data for the 52 weeks ending May 19 from SymphonyIRI Group, a market data company. Other Nestlé brands include Poland Spring, with a 6.3 share, Deer Park, with a 4.4 share, and Ozarka, with a 3.4 share.

Resource is being aimed primarily at “a woman who is a little more on the trendy side and higher-income side, and the bull’s-eye is 35 years old,” Mr. Cooper said.

New print ads show the bottle in lush woodland settings, and highlight “100 percent naturally occurring electrolytes — for taste, never added” and that the bottle has 50 percent recycled plastic content.

“It’s more than hydration, it’s total electrolytenment,” says the headline in the ads, which will be introduced on Monday in publications including People, Vanity Fair, In Style and Fitness. The campaign, which includes online advertising, is by McCann, New York, part of the Mediabrands division of the Interpublic Group of Companies. Public relations efforts for the campaign are by Cone Communications in Boston.

Nestlé, which declined to reveal expenditures for the new campaign, spent $51.5 million in 2012 on domestic advertising for its bottled water brands, according to Kantar Media, part of WPP.

Environmental groups including the Natural Resources Defense Council generally discourage drinking bottled water because of resources required to source, bottle and ship the water, not to mention the impact on the waste stream. But Allen Hershkowitz, a senior scientist with the Natural Resources Defense Council, commended Resource for using bottles that contain 50 percent recycled plastic.

“The fact that they are using recycled content in their bottles is something that all beverage companies should emulate,” Mr. Hershkowitz said.

In the United States, Coca-Cola brands use an average of about 5 percent recycled content in plastic bottles and PepsiCo soft drink brands average about 10 percent, the companies said.

As for promoting electrolytes, David G. Schardt, a senior nutritionist at the Center for Science in the Public Interest, noted that Resource stopped short of explicitly claiming they benefit health.

“They’re trying to stay away from F.D.A. interference but it also allows them to leave it up to the consumer to imagine the benefits that might come from electrolytes,” Mr. Schardt said.

With the exception of distilled water, all water contains some naturally occurring electrolytes like sodium and potassium, he said, adding that the added electrolytes in sports drinks are necessary only for extreme exertion.

“Replacing your electrolytes is only an issue for endurance athletes sweating for hours, not a jogger going out for a half-hour,” Mr. Schardt said.

Electrolytes and recycled content aside, Mr. Cooper said the real goal for Resource is to transcend mere beverage status.

“We want to raise it to the level of a lifestyle brand,” he said, “where she’s proud to carry around Resource as her bottled water accessory, so to speak.”

In a deal with “Project Runway,” the reality show on Lifetime, Resource will be featured throughout the 12th season, which will begin on July 18. In one episode the water will be integral to the theme of a design challenge, when fashion designers will be taken to a pastoral setting and challenged with reflecting elements of the natural environment in their designs.

Resource also has signed endorsement deals with Bobbie Thomas, the style editor on the “Today” show on NBC, Aida Mollenkamp, the host of “FoodCrafters” on the Cooking Channel, and Brett Hoebel, a fitness trainer who starred on “The Biggest Loser” on NBC.

It also will participate in fund-raising events for Dress for Success, the organization that provides professional clothing and confidence training to woman struggling to join the work force.

“As we’re trying to reach this new target, the brand is saying we’ve got to come at what their interests are and support their endeavors and causes,” said Leslie Sims, an executive creative director at McCann. “You have to be more interesting than just touting product benefits.”

A version of this article appeared in print on June 10, 2013, on page B6 of the New York edition with the headline: Nestlé Adds Premium Brand in Still Water Arena.
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The discriminating water drinker? Gag us with a spoon!!