France is the home of some of the world's biggest mineral water brands - Perrier, Vittel, Evian, Volvic, to name just four - but a new entry into the market early next year is likely to give brand owners such as Danone and Nestlé pause for thought.
For Coca-Cola, the Atlanta-based company which is the world's biggest soft drink producer, has announced that it is to launch its Dasani brand of bottled water in the French market next year, putting its not inconsiderable marketing might behind a brand which most French people have never heard of.
Paul Gordon, head of Coca-Cola France, likened the potential impact of Dasani on Coke's French business to that of Coca-Cola Light (as the Diet Coke brand is known there) in 1988 - in other words, the company has big plans and high hopes for the water.
Dasani has been available since May 1999, and the company claims that it is already one of the top ten bottled water products in the world, despite having a relatively limited distribution - according to Coca-Cola, it is available in the US, Canada, the Cayman Islands and Dominican Republic.
That the water already has a top ten market position - with sales of more than 1 billion litres in 2002, according to Gary Roethenbaugh, research director at market analysts Zenith International - after just four years on the market and a limited distribution speaks volumes about the power of Coca-Cola's marketing and distribution capabilities.
With the Coke carbonate brand one of the best known, and widely available, products in the world - in any category - Coca-Cola has a very strong platform on which to base any future product launch, and this is likely to mean that Dasani will garner a nationwide presence in France almost overnight - potentially displacing other bottled water brands currently sold in Coca-Cola vending machines, for example.
While Coca-Cola's carbonates are the same the world over, the bottled water market poses a different problem, with different national heritages requiring different approaches. In the US, Dasani is a processed water - essentially tap water which is purified and then fortified with minerals (calcium and magnesium); in France, it will be a natural mineral water, drawn from a source in Chaudfontaine in eastern Belgium, although again it will be fortified with the minerals.
The Dasani to be launched in the UK early next year will be the same as the US version, but the far more knowledgeable French consumers are to get the more sophisticated version - in keeping with the market as a whole.
"As I understand it, there is the possibility that Coca-Cola may be adapted to suit the requirements of different markets," Roethenbaugh told FoodandDrinkEurope.com. "Coke will have done its research, and will know what the best positioning in is for the French market."
So should Nestlé, Danone and Castel, the three main suppliers of bottled water in France, really be worried by Dasani's arrival? "Of course, every company will be aware of the sheer size and potential of Coca-Cola's distribution capacity, and this must give them some cause for concern," said Roethenbaugh.
But their experiences of competing with Dasani is the US should shed some light on the likely competition in their home market, he added. "Coca-Cola has a three-tier pricing policy for its bottled water brands in the US. At the premium end is Evian, which it distributes under licence from Danone. Then comes Dasani, while the Dannon range, another licensed brand, has the lowest price positioning."
Prices have been coming down for several years in the French market, according to Roethenbaugh, not least because the market is very mature. Total volume sales there were 8.8 billion litres last year, he said, making France the third largest bottled water market in western Europe after Italy and Germany.
But Coke has never focused on volume over value, he added, and had always maintained a certain price premium over other brands to avoid the 'commoditisation' of its brands, and there was no reason to believe that it would change this strategy for Dasani in France.
The likelihood, then, is that Dasani will be offered at the mid-price position in France as well, placing it somewhere between the value own label waters and well-known names such as Volvic, St Yorre or Vittel. Brand loyalty is very strong in France, Roethenbaugh said, and Coke will not find it easy to make a name for Dasani, even with its distribution power.
Coca-Cola suggested that Dasani would instead play heavily on the health aspect, claiming that 1.5 litres of the water supplied 33 per cent of the recommended daily intake of calcium and magnesium, and its launch advertising campaign would focus primarily on this element.
A similar approach is likely in the UK, although the market there is far less aware of the processed vs. natural water debate than in France, Roethenbaugh suggested. Conversely, the UK is a market with a relatively high price per litre, which means Dasani may be positioned slightly higher up the scale there. With sales of around 1.8 billion litres in 2002, the UK ranks in the top 20 markets globally in terms of volume sales but the relatively high prices there mean that it is one of the top 10 in value terms.
Coca-Cola did not say how much it expected to spend on the French launch, but if it is in line with the UK marketing budget of £7 million, the brand should certainly make a major impact when it arrives. But, according to Roethenbaugh, this is no bad thing.
"There is likely to be a halo effect in both markets. If Dasani plays on its health credentials, pushing the importance of hydration and mineral intake, then water overall will inevitably benefit. Yes, there will be concern perhaps that some existing brands, especially in the mid price bracket, could suffer, but as a whole the market is likely to benefit from the arrival of Dasani."
And other countries could well follow suit. Roethenbaugh said that Coca-Cola was thought to be targeting other major markets for Dasani - although the timescale is not yet known - and more European countries could well see Dasani in the near future if it proves popular in France and Britain.
"The Nordic countries, for example, have often been used by the company as test markets for its carbonate brands, so there is every possibility that they too will see Dasani."