Bottled water opportunities
How foodservice operators can cash in on the fastest growing beverage in America

By Larry Levine

Bottled waters defined

A few years ago the FDA developed acceptable labeling guidelines for bottled waters. Definitions include: SPRING WATER: Bottled water derived from an underground formation from which water flows naturally to the surface of the earth. MINERAL WATER: Bottled water containing not less than 250 parts per million total dissolved solids. No minerals can be added to this product. SPARKLING WATER: Water that, after treatment, and possible replacement with carbon dioxide, contains the same amount of carbon dioxide than it had at emergence from the source. PURIFIED WATER: Water that has been produced by distillation, deionization, reverse osmosis or other suitable processes. DRINKING WATER: Water that is sold for human consumption in sanitary containers and contains no added sweeteners or chemical additives (other than flavors, extracts or essences). It must be calorie-free and sugar free. Flavors, extracts or essences may be added to drinking water, but they must comprise less than one-percent-by-weight of the final product or the product is classified as a soft drink, not bottled water.

A little green bottle of mineral water landed in America in the mid-1970s. Originally introduced in restaurants, it took the country by storm. Today the green Perrier bottle is a cultural icon and Americans are drinking bottled water in unprecedented amounts.

Bottled water per capita consumption increased 9.4% in 1998 and has grown more than 50% since 1991. This growth last year outpaced all other beverages combined including juices (+2%), sodas (+3%) and beers (+1.3%). Bottled water industry sales were $4.3 billion in 1998, an increase of 9.8% from the previous year. (Source: Beverage Marketing).

Bottled water's ubiquity represents a major opportunity for foodservice operators. Whereas a few years ago bottled waters were featured only in white-tablecloth establishments, today, because of strong consumer demand and a variety of bottled water packaging alternatives, they are on menus in family restaurants, quick-service operations, cafeterias and corporate dining rooms. Bottled water has proven that it can be sold in all types of commercial and non-commercial foodservice operations and for all meal and snack occasions.

Why the growth in bottled waters?
As Americans are becoming more health-conscious, they are turning more and more to bottled water. It is naturally pure and generally tastes better than tap water. It also offers thirst-quenching refreshment with no chlorine or other unpleasant flavors and it contains no calories, sugar or caffeine. Another big factor in overall growth of bottled water was the advent of PET (polyethylene terephthalate) packaging. This plastic packaging made bottled water portable and convenient for consumers to take with them and enjoy anywhere.

Flavor is key factor
Generally consumers prefer spring and mineral waters because they taste better. This taste preference was professionally confirmed in a published San Francisco Chronicle Food Section staff blind-tasting of 10 waters in June of 1998. With eight spring waters, one filtered bottled water and a San Francisco tap water sample, the tasters rated the spring waters in the top eight spots, followed by tap water. The filtered water placed last.

The taste of water is important at restaurants. At La Toque in the Napa Valley, Calistoga Spring and Mineral waters are included as part of the restaurant's daily prix fixe menu at no extra charge.

"Water is an important part of a meal since 99% of diners drink it with a meal," says Ken Frank, chef/proprietor. "Since we go to such lengths to serve the finest produce, breads, butter, and other foods at La Toque, it only makes sense that we do the same with water. I include it as part of the menu because I feel so strongly about serving mineral water. I also provide great tasting coffee at the end of the meal at no extra charge for the same reason."

Make money with bottled water
Since consumers prefer bottled water over tap water, there is an opportunity for operators to create additional beverage sales. "Just think about the number of glasses of tap water your establishment serves free everyday," says Jim Crystal, foodservice division manager for the Perrier Group of America. "If you can convert just a small percentage of these tap water servings into bottled water sales, your revenues can be greatly increased. It literally can add thousands of dollars of profit with little effort." (see sidebar).

Suggestive selling works
Bottled water sales are not difficult to achieve. With the strong consumer preference to drink bottled waters, sales can be made simply by having the waitstaff ask their customers politely if they would like one served. "May I bring you a bottle of San Pellegrino or Acqua Panna?" Even if only a small percentage say yes, you have added thousands of dollars to your revenue.

A simple education program can be implemented to inform your waitstaff about the bottled waters you offer and how to serve them. Since there is a difference in flavors, minerals and carbonation levels (for sparkling waters) between the brands, let your staff taste them like you would wines. Many establishments like the noted Patina restaurant in Los Angeles are now even treating bottled water like wine. They offer a selection of domestic and imported brands on a beverage list and educate their servers about them.

A national steakhouse chain recently had a top imported mineral water company conduct a waitstaff training program for them. The company's local representatives went to each restaurant and taught the staff the basics about mineral and spring waters. The seminars got the staff excited about selling water, and contributed to the chain increasing check averages $5.

Kiwi Cooler

(1 serving) 1 kiwi fruit, peeled and sliced 2 Tbsp. coconut cream 1 lime, juice only 6.5 oz. chilled Perrier 1 kiwi slice for garnish At high speed, blend kiwi, coconut and lime juice until smooth. Stir in Perrier, and garnish with kiwi slice.

Brands are important
Consumers look for trusted brands when dining out. More and more foodservice operations are featuring brands on their menus. From naming a specific brand of coffee in fine dining, to using popular chocolate sandwich cookies as an ingredient in family restaurants, operators are cashing in on brands. Showcasing favorite brands is also important with bottled waters.

For example, a major league baseball stadium in the Northeast sold 1,500 cases of bottled water during a season. For the next season, it switched to the dominant regional brand and sold 5,000 cases during the comparable time period. Sales more than tripled and at a $2.00 selling price, incremental sales increased $7,000 over the previous year.

In another case, a foodservice station at a zoo in Texas sold the dominant brand. The next year the zoo switched to another brand at a cheaper price and sales dropped 35%. The zoo went back the following year to the popular brand and sales increased more than 35%.

Sundown Spritzer

(2 servings) 1 c. white grape juice 6.5 oz. of chilled Perrier Mint sprig for garnish Mix together the grape juice and Perrier, pour over ice cubes made using Perrier into stemmed glasses. Garnish with mint.

Merchandising helps build sales
Merchandising materials at the point-of-sale are effective in increasing sales. You can use branded table tents, counter cards, menu descriptions, tabletop bottle displays or café umbrellas.

Self-serve or quick-serve restaurants can increase sales by merchandising bottled waters with signage, menu boards or placing chilled bottles where customers can readily see them in ice barrels or counter displays. Also, bottled waters can be bundled together with other menu items to create different "meal deals."

Most of these merchandising aids are available from bottled water companies. Their sales representatives can also assist you in developing bottled water training programs and promotions that will build your beverage business.

Great outlook for bottled water
Perrier and its attractive green bottle helped introduce Americans to the refreshment and enjoyment of bottled waters more than twenty years ago. This trend is only expected to grow in the future. Foodservice operators can increase revenues with creative merchandising and staff training to sell more bottled water.

 

Bottled water revenue potential worksheet
500 glasses	Number of glasses of tap water operator serves each day
x 10%	Convert 10% of these to bottled water
=50 bottles	Number of servings of bottled water per day
50 x ($2)	Multiply by selling price per serving of bottled spring water
=$100	Added daily revenue
x 7 days
=$700	Weekly revenue from one unit
x 52 weeks
=$36,400	Yearly revenue from one unit
x 10	x number of units
=$364,000	Total added annual revenue from bottled water