Coca-Cola Espana, the Spanish arm of the Atlanta-based soft drinks giant, is preparing to bring the might of its marketing machine behind the BonAqua bottled water brand in a bid to carve a niche for itself in the increasingly competitive water market.
The Coca-Cola unit has joined forces with Italy's San Benedetto group, whose Spanish subsidiary will bottle BonAqua, adding to the numerous other Coca-Cola brands the company bottles there for distribution throughout Europe.
According to a report in the Cinco Dias newspaper, San Benedetto will concentrate solely on bottling the distilled water brand, with Coke's existing distribution network in Spain handling all other operations.
Coca-Cola launched BonAqua in the US several years ago, and despite the fact that it is essentially just purified tap water, it has been a great success. But Europe is a different prospect, with a market already dominated by 'true' mineral waters and with many major players such as Danone (Evian, Volvic) and Nestle (Perrier, Vittel) present across the continent.
Coke's first steps towards entering the bottled water market in Spain began earlier this year with the acquisition of the brand Santolin from two of its local bottlers and an agreement with the two companies that they would subsequently dedicate bottling capacity at Santolin's plant in Burgos to BonAqua. The first sales of Coke's bottled water brand in Spain began in May this year, just a month before arch rival PepsiCo launched its Aquafina bottled water there.
Coke clearly sees massive potential in Spain, where bottled water consumption is around 100 litres per capita each year. But the arrival of Aquafina and BonAqua in Europe, backed as they are with the massive advertising strength and distribution capabilities of PepsiCo and Coca-Cola, is likely to mean major changes in the way in which established players promote their products, not least because the distilled water brands are far cheaper to produce and distribute than mineral waters, and therefore sell at a much lower price.
Spain is not the first market in Europe to get BonAqua - it was introduced in Austria as early as 1970 and in Germany in 1986, and currently is marketed in 47 countries. Coke said the brand was particularly popular in the Czech Republic, Finland, Hong Kong, Hungary, Norway, Poland, Russia, Sweden and Ukraine, but it has yet to make any significant inroads into core bottled water markets such as France or Italy.