The Coke Machine - Michael Blanding [60]
In coming to dominate the bottled water market, Coke has had to pull a feat of behind-the-curtain wizardry every bit as impressive as turning Coca-Cola into a symbol of American pride and international goodwill a century earlier. Despite promising beginnings, however, Dasani has faced an even more damaging backlash, based not on individual health but on the health of the environment itself.
Even as awareness of the obesity crisis was beginning to hit, threatening sales of Coke’s trademark carbonated sodas, the company was readying its Plan B. In the summer of 1998, CEO Doug Ivester began toying with selling the most basic of beverages—water. The company had watched from the wings as other companies had made a fortune on the beverage, which the French company Perrier had introduced in the United States in the late 1970s. The fad had taken off quickly, after Perrier’s marketers appealed to a new demographic of yuppies as conscious about their health as they were about the conspicuous consumption of paying top dollar for something others were getting for free. Perrier’s profits from water rose from $20 million in its first year to $60 million by its second.
Starting in 1984, another French company, Evian, pioneered the use of lightweight bottles made of a clear plastic called polyethylene terephthalate (PET) just as the fitness craze was taking off, making the pink-and-red logo ubiquitous at the gym. Perrier stumbled briefly in 1990 when the supposedly pristine water was found contaminated with trace amounts of benzene, leading to a $160 million recall and cutting sales in half overnight. But the industry quickly recovered, led by the Swiss company Nestlé, which swooped in to acquire Perrier, as well as dozens of other brands—Deer Park, Arrowhead, Calistoga, Poland Spring—that were left from America’s first flirtation with bottled water at the turn of the last century. Between 1990 and 1999, bottled water sales shot up from $115 million a year to more than $5 billion.
With profit margins on water as high as 50 cents on a $1.50 bottle, Coke and Pepsi couldn’t resist entering a market that had been dominated by foreign companies. Instead of selling natural spring water, however, the cola giants didn’t see why they couldn’t just take the same water flowing through their bottling plants and package that. Pepsi was first, shooting its purified water into a blue bottle with a squiggle evocative of snow-covered mountains.Voilà, Aquafina.
Coke could have gone the same route, licensing a new brand to its bottlers. But the Coca-Cola Company had always sold syrup, and there was no syrup that you could use to create water. Ivester stewed for the better part of 1998 before he hit upon the solution. Coke scientists would formulate a proprietary mix of minerals that it would ship to bottlers to put in their purified tap water. This was its new secret formula, which it could market as every bit as unique as Coke’s own. After much focus-grouping, Coke created the perfect pan-national combination of syllables for its new beverage. Intended to signal relaxation and refreshment, the name Dasani could just as well be that of an Italian winemaker or an African tribe.
Dasani actually wasn’t Coke’s first entry into bottled water; it had bought Belmont Springs in the 1980s and Mendota Springs in the 1990s, both times suffering lackluster sales. But that was when water was a mere side venture to the runaway growth in sugary soda. Now water itself was the growth market. Coke put the full weight of its advertising power behind a new $20 million campaign intended to both sell the product and grow the market itself.
Coke targeted women, who consumer surveys showed were more focused on healthy living (and not coincidentally, more concerned with their kids’ drinking so much soda). In the same way that “The Pause That Refreshes” had addressed the anxieties of workers suffering from grueling production