Bottled water has been growing strongly in recent years, and was up 11% during a sweltering 2006, but the record breaking bad weather during summer 2007 applied a temporary brake to the upward movement.
With unprecedented rainfall in July, half the usual sunshine and temperatures 5 ordm;C below average, soft drinks were down 3% and bottled water declined by 8.6%, compared with predictions at the beginning of the year that it would be up 7.7%. In the impulse sector bottled water was hit even harder with sales down 14%.
Against this backdrop Nestl eacute; Waters has put in a strong performance in the impulse sector, increasing its market share from 9.2% to 9.4%. Mark Arnold, Nestl eacute; Waters senior development manager for cash and carry, says sports caps performed particularly strongly for the company, outperforming the market with 27% year-on-year growth. Flashpacks on Buxton and Vittel with 24 for 20, 12 for 10 and 6 for 5 offers also worked well in cash and carries and Arnold says the new shaped bottle for 50cl Vittel was well received. With bottled water expected to get back on track next year, Nestl eacute; Waters is expecting growth of 10% in 2008 and around 6% year-on-year after that.
Looking ahead, Arnold says four major issues – sustainability, provenance, lower food miles and health – are factors that will increasingly influence consumers, and Nestl eacute; Water’s brands can score on all of these factors. The product comes from a sustainable source and products like Buxton have both provenance and, with more than half the UK population within a 100-mile radius, can satisfy both concerns about food miles and consumers’ growing interest in local products.
With health, Nestl eacute; Waters has been leading the call for people to drink two litres of water a day to remain hydrated. Arnold says this helps to move the customer beyond price concerns, and encourages them to build up the habit of drinking water throughout the day. Nestl eacute; is also aiming to educate children about the importance of remaining hydrated through the day, encouraging consumers to start drinking the product from an early age.
Next year is expected to start strongly for Nestl eacute; Waters, with a detox campaign in January for consumers who have been over indulging through the festive period. In the cash and carry sector this will be backed with a multi-buy mechanic. After their success last year, the flashpacks will be repeated but instead of a June launch they will be available from March to engage much earlier with customers.
For the summer, Nestl eacute; has ended its sponsorship of Wimbledon in favour of a two-year deal with the English cricket team. Arnold explains that this will give a much greater window of opportunity across the whole summer of the cricket season rather than just the Wimbledon fortnight.
In addition, Nestl eacute; Waters has also just signed a deal which will bring Buxton back to TV advertising next year, although details are still under wraps.
He also highlights the support the company has put behind the wholesale sector and the Federation of Wholesale Distributors. Support for the trade will include Buxton 50cl bottles, price-marked 39p, made available exclusively to wholesalers from January. Arnold says the company has also realigned its business teams to provide more focus on customers in cash and carries. With availability a major concern of cash and carry customers, the company has made this a priority and he says service levels over the past year have been 99%.
The company has also got strongly behind the FWD’s MSYS campaign and will be one of the suppliers taking part in the coupon offer in the Daily Mirror and Daily Record in Scotland as part of National Independents’ Week next June.