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Coke enters European water market

20-Jan-2003

Coca-Cola, the world's leading soft drink company, has continued its move into the bottled water sector with the acquisition of the Belgian natural water brand Chaudfontaine.

The acquisition, a joint venture between bottler Coca-Cola Enterprises Belgium (CCEB) and Coca-Cola in Atlanta, will cover only the Chaudfontaine still and sparkling mineral water business - the Belgian group's carbonated soft drink brands (Lim'Oh, Parasol), its fruit juice products (Calidi) and the Duke natural mineral water brand are not included.

 

In a joint statement, Chaudfontaine and Coca-Cola said that they believed this transaction was the best way to secure the continuity of Chaudfontaine and to realise its full potential for future development.

 

Jean-Luc Cornet, managing director of Chaudfontaine Monopole, said: "For many years Chaudfontaine has been renowned for the outstanding quality of its natural mineral water. Nature has given us unique assets that we continue to treasure: an impressive geological site, a unique thermo-mineral source, crystal-clear water with an exceptional balance of minerals.

 

"Exploiting these assets in today's competitive market is not easy. After several difficult years, we are excited to start work with Coca-Cola and to grow and develop. We welcome this opportunity not just for Chaudfontaine, but for the whole region."

 

These views were shared by Dirk Veryser, general manager of Coca-Cola Services, the Belgian subsidiary of Coca-Cola: "The water category in Belgium is highly developed and enjoys healthy growth. It is also very competitive, with many national and international brands. This agreement really makes good sense: it allows us to secure the continuity of Chaudfontaine and provides us with the opportunity to enter the water category with a high quality brand."

 

Coca-Cola has been keen for some time to enter the bottled water market in Europe, where despite the proliferation of brands there is a great deal of potential. The company has already entered the US water market, but there it has focused not on natural mineral water but rather on the purified water brand Dasani, which has the minerals added artificially.

 

Dasani is sold primarily in North America, but Coca-Cola also has a more international bottled water brand - Bonaqua - which is sold in many European countries already. But like Dasani, Bonaqua is not a natural mineral water, and the US company has been keen to gain a foothold in this premium segment of the water market.

 

The biggest fear of many of Europe's smaller mineral water companies - restricted as they are by the often remote locations of the springs - is that companies such as Coke and Pepsi will be able to bring the might of their marketing and logistics to bear on the market and gain a major foothold with brands such as Bonaqua.

 

The acquisition of Chaudfontaine seems to indicate that, for now at least, Coke is happier to focus on the higher end of the market, but nonetheless, the brand is likely to benefit from a major distribution push now that it has joined the Coke stable.

 

"Coca-Cola already has a long-term track record of business investment in Belgium. Currently, we have two industrial sites in Antwerp and Ghent. This new agreement will provide us with a water producing plant in Wallonia. We look forward to working with Chaudfontaine's employees to bring these wonderful natural resources to the market. Coca-Cola is committed to maintain employment and to invest in the development of this business, together with the Chaudfontaine employees," commented Wim Zijerveld, general manager of CCEB, a clear indication of the company's intent to push the brand.

 

Chaudfontaine may have a long way to go to reach the European dominance of Perrier or Evian, but with the mighty Coca-Cola marketing machine behind it, it has at least got off to a good start.