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Why are we spending big bucks on Bottled Water

Why are we spending big bucks on Bottled Water. Bottled Water History. Water is essential for all life Villages and dwellings located near water sources. Storage and carrying water originated thousands of years ago Romans thought waters from some sources had mystical powers.

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Why are we spending big bucks on Bottled Water

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  1. Why are we spending big bucks on Bottled Water

  2. Bottled Water History • Water is essential for all life • Villages and dwellings located near water sources

  3. Storage and carrying water originated thousands of years ago • Romans thought waters from some sources had mystical powers

  4. First recorded “spring” found in 1776 • Over 50 more springs opened in Vermont through 1876 as well as many other areas of the country • Krotz Springs • Abita Springs • Denham Springs

  5. French first to bottle - Perrier Private spring water bottling

  6. 1960’s soda and processed food • Water was unpopular • Technology changed it all

  7. Federal level • Regulated as a packaged food product, governed by the FDA. • 1 of 4 products with own specific Good Manufacturing Practices (GMP) • Standard of Identity: uniform definition of water classifications • Standard of Quality: limits for substances for both sources of water and finished bottled water

  8. State level • Inspecting laboratories, sampling, analyzing, and approving sources of water • Must be approved to be used to supply a bottling plant

  9. Industry Regulation • International Bottled Water Association (IBWA) • More strict than state and federal regulations • Ensures safety, quality, and hazard analysis control points from source through packaging • Members undergo annual unannounced plant inspections by independent 3rd party organization

  10. Artesian • Deep underground water from a confined aquifer • Years of filtration through sand and rock. • Under pressure, rises naturally to the surface on its own • Considered to be the cleanest, safest water found untouched in nature.

  11. Distilled Mineral • Vaporized into steam, then cooled to re-condense back into water • Minerals are left behind • Contains no less than 250 parts per million (ppm) total dissolved solids (TDS) • Must be bottled at the source

  12. Spring Drinking • Naturally free from pollution and micro-organisms • Slightly tampered with to remove unstable elements, if present • Transported from the source to the bottling plant • Comes from a variety of sources, including tap (municipal) water • No treatment restrictions, as long as the water is safe to drink

  13. Chief Economic Characteristics Market Size Market Value Market Value Growth Rate Market Volume Market Volume Growth Rate Market Segmentation Differentiated Product

  14. Market Size - $12 billion in US alone • Market value – Total revenues of $15.6 billion in 2006 • Market value growth rate – CAGR of 8.1% for 2002 - 2006 • Market volume – 31.4 billion liters in 2006 • Market volume growth rate – CAGR of 8.6% for 2002 – 2006

  15. Differentiated Product • Water is essentially the same • Differs only in packaging and advertising

  16. Buyers, Suppliers, and Distributors

  17. BUYERS- retailers- consumersSUPPLIERS- Water Utilities- Landowners

  18. Distribution

  19. Substitute Products

  20. Major Players • Nestle S.A. • PepsiCo, Inc. • The Coca-Cola Company • Other

  21. Nestle S.A. • World’s largest food and beverage company by sales. • Pierre and Pure Life are the popular brands • Established in 130 countries and markets 70 different brands

  22. PepsiCo, Inc. • Global snack and beverage company • Aquafina is their popular brand • Have ownership interests in some of their bottlers.

  23. The Coca-Cola Company • Largest manufacturer, distributor, and marketer of nonalcoholic beverage concentrates in the world. • Dasani is their popular brand. • Own about 500 brands in more than 200 countries.

  24. Others • Danone – Evian • Perrier Group – Perrier • Suntory Water Group – Ozarka • McKesson Corp • – Sparkletts

  25. How much are you willing to spend? • Nestle • Coca-Cola • Pepsi • Other • Most Expensive • Least Expensive

  26. What message is being sent? • Appealing to the Eye • Vibrant • Unique • Out of the Norm

  27. Easy to grip • Stylish • Bottle size • The Grammy award for 2008 goes to “Aquadeco”

  28. Tap or Bottled? • Entry and Exit Barriers

  29. Competition

  30. What tastes better? • Should we spend more than $5.00 on water?

  31. Are we popping water bottles?

  32. Future Projections

  33. Projected Market Value

  34. Projected Market Volume

  35. Image and style

  36. waater ICE

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