Message in a Bottle ~ 2nd installment

from an article at FastCompany

And in Fiji, a state-of-the-art factory spins out more than a million bottles a day of the hippest bottled water on the U.S. market today, while more than half the people in Fiji do not have safe, reliable drinking water. Which means it is easier for the typical American in Beverly Hills or Baltimore to get a drink of safe, pure, refreshing Fiji water than it is for most people in Fiji.

At the Peninsula hotel in Beverly Hills, where the rooms start at $500 a night and the guest next door might well be an Oscar winner, the minibar in all 196 rooms contains six bottles of Fiji Water. Before Fiji Water displaced Evian, Diet Coke was the number-one-selling minibar item. Now, says Christian Boyens, the Peninsula's elegant director of food and beverage, "the 1 liter of Fiji Water is number one. Diet Coke is number two. And the 500-milliliter bottle of Fiji is number three."

Being the water in the Peninsula minibar is so desirable--not just for the money to be made, but for the exposure with the Peninsula's clientele--that Boyens gets a sales call a week from a company trying to dislodge Fiji.

Boyens, who has an MBA from Cornell, used to be indifferent to water. Not anymore. His restaurants and bars carry 20 different waters. "Sometimes a guest will ask for Poland Spring, and you can't get Poland Spring in California," he says. So what does he do? "We'll call the Peninsula in New York and have them FedEx out a case.

"I thought water was water. But our customers know what they want."

The marketing of bottled water is subtle compared with the marketing of, say, soft drinks or beer. The point of Fiji Water in the minibar at the Peninsula, or at the center of the table in a white-tablecloth restaurant, is that guests will try it, love it, and buy it at a store the next time they see it.

Which isn't difficult, because the water aisle in a suburban supermarket typically stocks a dozen brands of water--not including those enhanced with flavors or vitamins or, yes, oxygen. In 1976, the average American drank 1.6 gallons of bottled water a year, according to Beverage Marketing Corp. Last year, we each drank 28.3 gallons of bottled water--18 half-liter bottles a month. We drink more bottled water than milk, or coffee, or beer. Only carbonated soft drinks are more popular than bottled water, at 52.9 gallons annually.

No one has experienced this transformation more profoundly than Kim Jeffery. Jeffery began his career in the water business in the Midwest in 1978, selling Perrier ("People didn't know whether to put it in their lawn mower or drink it," he says). Now he's the CEO of Nestlé Waters North America, in charge of U.S. sales of Perrier, San Pellegrino, Poland Spring, and a portfolio of other regional natural springwaters. Combined, his brands will sell some $4.5 billion worth of water this year (generating roughly $500 million in pretax profit). Jeffery insists that unlike the soda business, which is stoked by imaginative TV and marketing campaigns, the mainstream water business is, quite simply, "a force of nature."

"The entire bottled-water business today is half the size of the carbonated beverage industry," says Jeffery, "but our marketing budget is 15% of what they spend. When you put a bottle of water in that cold box, it's the most thirst-quenching beverage there is. There's nothing in it that's not good for you. People just know that intuitively.

"A lot of people tell me, you guys have done some great marketing to get customers to pay for water," Jeffery says. "But we aren't that smart. We had to have a hell of a lot of help from the consumer."

Still, we needed help learning to drink bottled water. For that, we can thank the French.

Gustave Leven was the chairman of Source Perrier when he approached an American named Bruce Nevins in 1976. Nevins was working for the athletic-wear company Pony. Leven was a major Pony investor. "He wanted me to consider the water business in the U.S.," Nevins says. "I was a bit reluctant." Back then, the American water industry was small and fusty, built on home and office delivery of big bottles and grocery sales of gallon jugs.

Fiji Water produces more than a million bottles a day, while more than half the people in Fiji do not have reliable drinking water.

Nevins looked out across 1970s America, though, and had an epiphany: Perrier wasn't just water. It was a beverage. The opportunity was in persuading people to drink Perrier when they would otherwise have had a cocktail or a Coke. Americans were already drinking 30 gallons of soft drinks each a year, and the three-martini lunch was increasingly viewed as a problem. Nevins saw a niche.