Q&A: Nestlé Waters focuses on sparkling water with redesign, new flavors

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Q&A: Nestlé Waters focuses on sparkling water with redesign, new flavors

Nestlé Waters North America has undertaken a makeover of its regional sparkling water portfolio, informed by its premium brands and a growing consumer interest in the category. The Stamford, Conn.-based company in early May rolled out advertising for the refresh given to its Arrowhead, Deer Park, Ice Mountain, Ozarka, Poland Spring and Zephyrhills brands — which includes a proprietary new bottle design, a host of new flavors and the addition of cans.

Drug Store News spoke to Sam Martin, brand business director at Nestlé Waters North America, about the opportunity sparkling water is presenting.

Drug Store News: What’s the driving force behind Nestlé Waters’ sparkling water initiative? What made you want to go big on sparkling water for the regional brands?

Sam Martin: We really saw the opportunity to take the regional brands where we weren’t playing in the sparkling category already, but really with our understanding of the sparkling consumer to drive a little more synergy across our portfolio. Obviously, sparkling water has been on fire for a number of years, but when you think about the category, it’s still really only a 16% household penetration today, which means 84% of the households don’t buy it in any way, shape or form. When you look at something like diet soda, you see a big household penetration, and regular soda has an 80% household penetration, and we just saw the opportunity with the right brand to close that gap and saw a way to tap into the power of our spring brands to really grow.

DSN: You mentioned portfolio synergy — what sort of learnings did you take from your Perrier brand for this effort?

[caption id="attachment_587982" align="alignright" width="150"]Sam Martin Nestle Waters    Sam Martin[/caption]

SM: Perrier is really a good representation of being the only brand in sparkling that’s really playing meaningfully across the three different formats — large PET, small PET and can. Perrier also, of course, has the glass offering, but what we see in that consumer is that they are very format-loyal. So you won’t have a large PET consumer buying cans, and that’s why in mainstream, no one’s really playing across all of those key formats. So we recognized the opportunity with the strength we already have on the PET side that adding cans to that portfolio would be a really big unlock for the consumer, especially. Secondly, flavors — about 80% of the categories’ reaction are on flavors. So being able to build out an important core set of flavors, but then also have some more experiential flavors like pomegranate lemonade that can help to bring in a new consumer, as well.

Also, from a packaging standpoint, Perrier has done a really nice job of developing packaging that balances that ability to deliver the message to the consumer around the fact that it is bubbled and flavored. It brings those both together, making it so we can take a few cues from there to help influence. But everything is rooted in the heritage and the equity that each of the six regional brands stand for. I think that was where we were able to take a few learnings, but also still translate them so they were really being defined for the regional consumer.

DSN: What would you say is driving consumer interest in sparkling water?

SM: When you look at what we think our portfolio can lend to that, obviously being a huge player in bottled water and helping to drive that dynamic in bottled water being bigger than soda, we have more households in our existing regional spring water business, just on the still side than the entire category of sparkling water. These are brands that are No. 1 in equity in each of their regions, well-known. Consumers choose them by and large in the still side water business. But when you look at those 38 million households, only 7 million of those households are buying sparkling water today. So, we see a huge opportunity to help that consumer understand some of the benefits, some of the great things about sparkling water by entering through the lens of our existing business with them.