Dasanis trans-Atlantic trouble

The withdrawal of the Coca-Cola company?s Dasani purified bottled water product from the UK market has been a public relations disaster for the world?s biggest soft-drink manufacturer. Coke, seeking to fulfil its diversification vision to meet the beverage demands of health-conscious consumers, had high hopes for Dasani in Europe.

It became clear, however, that UK consumers didn?t value the reverse osmosis, NASA-designed process that stripped the tap water of impurities before imbuing it with minerals like calcium as much as those in the US. ?Americans value processing,? noted one observer. ?Europeans value naturalness.? Coke?s confidence was perhaps justified given the rapid growth of purified water, which now accounts for just under half of the worldwide $40 billion bottled water market, the world?s fastest growing beverage category. The UK bottled water market alone is worth over $2 billion, according to market researcher Zenith International, and growing at 20 per cent a year. Coke?s worldwide bottled water sales have increased by 50 per cent for the past three years and its non-cola sales account for 36 per cent of its revenues.

The UK was to be the launch pad for moves into France and Germany. However, perhaps recognising continental Europeans penchant for all things spring (Nestle?s Perrier and San Pellegrino, and Groupe Danone?s Evian hold about two-thirds of the European market), the French and German versions of Dasani were to use spring-source water, not tap water.

Dasani has been a runaway success in the US, where it is second only to another purified water, PepsiCo?s Aquafina (sales of $765 million and $835 million respectively). It has also performed well in more than 20 markets, particularly in Latin America and Asia, although this may in part be due to the fact purified water has increased leverage in places where the water supply is less pure.

Coke was not devastated when the UK press turned on Dasani because of its tap origins. ?We were prepared for the purity debate that occurred in some sections of the media,? European communications director Jonathan Chandler told FF&N. Only when Dasani was subsequently found to contain illegal levels of bromate, a production mishap, did Coke decide the damage had been too great.

Others see the failure in harsher terms. An executive from a beverage rival told the UK?s The Sunday Times ?It?s typical Coke arrogance. They assume they can replicate what they have done in the US. Well, they can?t.?

Author of Pop: Truth and Power at the Coca-Cola Company Constance Hays stated: ?The Dasani crisis is a case of a giant that is so desperate for growth that it appears things are being overlooked. Coke is a master marketer—they can sell pretty much anything—but sometimes they get so caught up in the marketing they lose touch with reality.?

While Coke has shelved its European Dasani ambitions, Chandler said Dasani may yet see the light of day in Europe. ?We are still committed to growing the water category in Europe—whether that includes Dasani we are unsure of right now.?

?I don?t think Dasani is dead in the water but there are a lot of issues to overcome,? said Gary Rothenbaugh, research director at Zenith. ?Calling it pure water may have been a bad move—perhaps they should have called it purified water.?

Coke still owns several European water brands such as Malvern in the UK and Valser in Switzerland and Germany, both of which are spring-sourced.

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