l i
t{ l: r !cy
Liquid Assets
In a WaterFight,
Cokeand Pepsi
T[y OppositeTacks
chiến thuật ngược lại
AquafrnaPitchesIts Purity,
DasaniSellsFreshTaste; sliver = piece
Will a PriceWar Erupt?
An Ad for'the MostNothing'
By Bnrsr McKrv
Surroundedby a groupof marketersin
hisManhattanoffice,brandconsultantPe-
ter Arnell considered a bottleof Aquafina
water.Its newtransparentlabelmadethe
interior look like a calm sea.It's a good
change,said the ma.nwho helPedmake
DKNYa pop-culture sensation.Hewanted
more: the PepsiCoInc. brandshouldstill
vượt quá transcend"predictable"Swisspeahsimag-
ery anddevelopa mystique.In its market-
ing it should be associatedwith other
types of purity-with the elemental
beautyof art, say,or music.
"We've got to take the asset called
water, and move it to an unexPected
place," Mr. Arnell said. "The moment
you treat it like water,you're dead."
Figuring out how to turn the world's
mostubiquitousthing into somethingdis-
tinctive andlucrativeis suddenlya bigbat-
tle in the beveragewars. Backedby mas-
sivemarketing,Aquafinais the No. 1 bot-
tled water in the U.S. Coca-ColaCo. is
catcNngupwith Dasani,thecountry'sNo.
2 sellingwater.Pepsiexecutivesregularly
debatewhethertheyshoulddivert market-
ing dollarsfrom cola.Bottledwatermakes
up lessthan 10%of eithercompany'sU.S.
beveragesales.But nationwidebottled-wa-
ter sales grew 307olast year, compared
with 0.6%for softdrinks.Cokeand Pepsi,
in otherwords.now seewater as their sin-
gle biggestgrowth opportunitY.
The rivals are taking diametrically
oppositetacks in marketing a virtually
identical product. Coke says the min-
eral mix it addsback to its Dasani puri-
pepsi's
fied water otfers optimal fresh taste-a purifying
"pixie dust" by some process 9ndoTer lemainingparticlesthat might
mixture dubbed
Coke bottlers. Pepsi boasts that Aqua-
fina is purer becauseit containsexhaus-
tively filtered water with nothing
added.In its televisionads, silvery rib-
bons of water pour forth from an open
"Friends"
Aquafina bottle, while star
Lisa Kudrow intones in a voiceover:
"Sometimesyou just want nothing,and
forth = foward
'Unisex.Mainstream'Water
Water
Wars
Pepsiand
Coca-Cola's
latest
battlefield is
the bottlecl-
water mart(et
t*,t,'$., -'3
tr"&','ao'
Marketshare
ln 2001
2001 Volumegrowth 45% 95.5%
2001 Revenue $645million $560million
Marketing
Digest;Beverage
Beverage
Sources:
whenthat happensthis is the most noth-
ins *Avou can have."
decadeago.portablebottledwater
wasonly a sliverof the U'S. beveragein-
dustry,dominatedby NestleSA'sPerrier
anddroupeDanoneSA'sEvian.Todayit is
a $3.5billion market.Pepsitried t0 enter
the bottled-waterbusinessin 1987by buy-
ing a springwater company.But two at-
tempts,aswell asonetry at sellinga spar-
kling brand, didn't take off. Pepsiexecu-
tivei finally decidedthat the best way to
buildanationalwaterbrandwastotakead-
vantageof an existingresource:thewater
treatment facilities used at its bottling
plantsto purify tap water for soft drinks.
Craig Weatherup, then Pepsi'sbever-
age chief, and his team decid-edthat
Pensi shouldset itself apart by filtering
ev6rything it could out of tap water. By
doing that, Pepsireasoned,it could turn
an available resource.into a product
whose taste and quality would compete . tlingCo.Consolidated,
Turn to PageA8' Column1
Please
ContinuedFTom First page
.
with the already popu.larspriig water completelyseparateafteraccidentallycar-
branctssuchas Eyian. Botiling tap water
0n a large scalewouldalsotet-eepii com-
pete on price.
In 1994,the companyinstalled$3mil_ with competitiongrowing, by last year
..
rton worth of reverseosmosisfiltration both companieshad started to rev up
equipmentat a botflingplant in Wi.tlti,
tt,an. I'ap water that had already been Dasanijust as it doesits sodas-aspart
fille1qd to make soft drinks *a,
i,uif,ud
at high pressurethroughfiberglasi mem-
oranesm_remove
tiny mineral particles.
uarDontltters then strippedout chlorine machinesin healthclubs.The company
rmpart an off taste or smell. Becauset"he
y"t.i {,.1dbeenstrippedevenof partictei
rnar Klll bacteria,oz0newas added to
prevent more bacteria from growing.
Pepsiearnedits profits by licen"singttrt
to use the
fgn_t Aquafina name to its
b0tilers,who bought and installed the
nltratronequipment.
Pepsi'spitch: Unlike soft drinks,wa-
ter is consumedat all times of day. One-
third of American householdsstill have
yet to try bottled water. While bottled
water brands in the Past have been
aimed at women and high-endconsum-
ers, Pepsi wants Aquafina to be Per-
ceivedand priced as a
"unisex, main-
stream" water, saysDawn Hudson,Pep-
si's seniorvice presidentof strategy and
marketing.
Thoughoutthe last decade' consum-
ers were increasingly reaching for bot-
tled brands-Perrier, Evian and then Po-
land Spring-as a healthy alternative to
soda. Coke executives,concernedabout
the low margins they saw bottled water
settins in other markets around the
frortO,-questionedwhether a U.S. busi-
nesswould be"profitable. But with water
taking off and Pepsi racing ahead,they
relented'in'1999. The companyarrived at
the sameconclusionPepsihad reached:
that purifying plain tap water at its own
bottling plants was the waY to go.
Stili, it would have to differentiate it-
self from Pepsi and others. Linguists "s" in
helped devise the name; the
"crisp and
Daiani is meant to convey
freshness,"saysKellam Graitcer' a se-
nior brand managerfor Dasani.The dou- "i"
ble "a" has a soothingsound.The
gives the name a foreign ring, she says.
The company'sresearchersanalyzed
the mineral content of tap and bottled
waters from around the world and de-
signeda combinationof minerals meant
to impart what they describeas a clean'
fresh taste. The result: a mix including
magnesiumsulfate, potassium chloride
and salt whose compositionis kept as
secretas the original Coca-Cola formula.
The mineral packetalsogaveCokea way
to make money: Just as it sells bottlers
Cokeconcentrate,it would sell them the
Dasanipacket.
The processof purifying water wasn't
as easy as it first looked.Coca-ColaBot-
whichstartedbot-
tling Dasaniin April 1999, learnedit hadto
keep water and soft-drink bottling lines
bonatingsome60,000 casesof water.
At first, just getting Aquafina and
Dasani out on shelveswas enough.But
marketing campaigns.Coke promoted
of a lifestyle. To drive homethe message
that Dasani should be equated with
health, bottlers posted Dasani vending
hired specialistsin stressrelief, fitness
and diet who offered online "wellness
chats."
Focusingon women, it posted "Life
Simplified" information boards at day-
care centers.A TV and print advertising
campaign introducedlast year features
women roilerblading and walking and
urgesthem to "treat yourselfwell, every-
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