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Message in a bottle.

Message In A Bottle

Good Timing, Product Push Tawanee Past $1.5 Million In Sales

While those distinctive green bottles of Perrier were returning to stores following a toxic chemical scare last February, one Arkansas company made a big splash in the local bottled water market.

Perrier had a virtual lock on the sparkling water market in the United States until a lab in North Carolina found traces of benzene, a toxic cleaning fluid. in product samples.

A subsequent recall of 72 million bottles provided a chance for smaller companies like Little Rock's Tawanee Artesian Spring Water to grab a bigger hunk of the $2 billion that Americans plunk down each year for imported and domestic bottled water.

Perrier claims to have regained distribution of about 80 percent of its retail outlets and has re-appeared in about half of the nation's top restaurants. But industry insiders say Perrier will never again have the lead in the United States, where more than 600 different brands jockey for space on retailers' shelves.

Meanwhile, Tawanee has moved into the territory formerly occupied by Perrier, added new product lines and tripled its gross income for 1990 to more than $1.5 million.

In Arkansas, Perrier has only recently re-appeared and is still not available in all flavors or bottle sizes. The recall had a positive effect for Tawanee, which has found ample shelf space this year for its broad line of bottled water products.

"The recall had that effect," says Breck Speed, the 33-year-old president of Tawanee. "It provided not only the opportunity for our products and other products to gain shelf space that was vacated by Perrier, but acceptance by consumers as a viable product.

"People have found (local sparkling water products) less expensive, good tasting and readily available. It's going to be tough for Perrier to get all the market share back."

Speed says he has doubts that Perrier, which once monopolized the industry, will ever reach 100 percent of its market share again.

"There are too many alternatives out there," Speed notes. "People had a chance to try too many others."

Jerry Mauldin, store manager of Harvest Foods at Kavanaugh Boulevard in Little Rock, says Perrier is back in his store but isn't exactly blowing out the door.

"They're not at their previous levels at all," Mauldin explains, "and I don't think they'll reach it -- there's been too much new competition."

Mauldin says he carries sparkling waters distributed by both Tawanee and Mountain Valley Spring Co. of Hot Springs.

While two Little Rock restauranteurs agree the mishap was costly to Perrier and helped Arkansas bottlers, they say they had already changed over to the products of local distributors.

Steve Vaden, owner of Cheers on Broadway, says he previously served Perrier but made the switch from Perrier to local waters before the toxic scare because of expense.

"Why serve Perrier at the expense?" Vaden asks. "I can serve waters from local companies for two-thirds the price. I didn't like charging customers $1.25 for a bottle of water where now it's only 75 cents."

Vaden says the Perrier mishap gave companies like Tawanee and Mountain Valley just the break they were looking for.

"Tawanee did a big business with Connoisseur [Sparkling Glacier Water]," Vaden explains. "Perrier wasn't able to come back quick enough with restocking and lost a share. As a result, Tawanee and Connoisseur got a nice foothold in this market."

Paul McGee, maitre d' at Grafitti's on Cantrell Road, says his restaurant switched to local companies before the recall.

"The customers seem to be satisfied, and you get more for your money," McGee says. "Perrier is sold in six-ounce bottles and Tawanee Spring is sold in 10-ounce bottles. Tawanee also has a nicer carbonation and is cheaper."

All of this, of course, is music to the ears of local distributors like Speed, who have worked diligently to compete with Perrier.

"What the Perrier recall did, more than anything else, was allow folks the opportunity to try different bottled waters," says Speed, who believes that use of the term Perrier has become generic. "It was kind of like in the early days of copy machines. Everyone just said, |I need a Xerox of this.' So, at a restaurant they'd say, |Hey, I'd like a Perrier.' It's just a generic name for sparkling water."

McGee agrees:

"People still order Perrier. It's like Kleenex and tissue. But they're just as happy with local waters."

Following the recall, Speed says Tawanee's market -- including Arkansas, western Tennessee, Mississippi, Louisiana, Kentucky, Missouri, Alabama and parts of Oklahoma -- really opened up.

"Arkansas has a great reputation for pure water.," he notes. "We've got a reputation as a pristine, natural state, and our water markets very well outside of Arkansas. Inside of Arkansas, the demand for bottled water has just been tremendous. No one had ever tried to market here, really."

Tawanee's sales are up 300 percent from 1989, and part of that, Speed says, is due to the addition of two sparkling water products such as Quibell, bottled in West Virginia, and Evian Natural Spring Water, bottled in France.

"Last year our sales were around $500,000, and so far this year they're already approaching the $1.5 million mark," says Speed. "We're really excited about the sales."

Tawanee's biggest seller is Evian, while Connoisseur, bottled in Saskatoon, Saskatchewan, Canada, and Canadian Spring Sparkling Water, bottled in Sault Saint Marie, Ontario, Canada, follow close behind.

While breaking into a large, concentrated population market can be tough, Speed says, creating a market from virtually nothing is equally hard.

"We'd love to be selling to the world, but when you get to New York, California or Florida, the market is tough and competition is really big. Here, we've just had to almost create the market from scratch. It's been a lot of work, but then there's a lot of opportunity in that. No one's done it before and we've had the opportunity to do it."

Speed, a former lawyer, bought Tawanee in 1988. The business is located at Raleigh Spring, a historic commercial spring located in the Quapaw Quarter of Little Rock. Tawanee's best marketing tool, Speed says, is free samples.

"Our best way to market our products are just to sample, sample, sample," he says. "The best way to get folks to buy something is to let them try it. So, whenever we can find a crowd of three or more people, we'll show up with a water cooler or sparkling water and just give it away."

Speed says consumers buy bottled water because the taste and quality is better than that of drinking water. Bottled water also provides an alternative to soft drinks.

Tawanee now has 12 employees and five trucks that deliver directly to the business or the home. Speed says the market for his products is growing rapidly.

"Anyone that looks for a low sodium, low caffeine, healthy drink that tastes great can turn to bottled waters," Speed says. "We can attract a broad cross section of folks. The soda companies have spent millions and millions and millions of dollars training people to drink that type of drink. We're at that niche between the soda pops and just plain spring water."
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Smith, Melody
Publication:Arkansas Business
Article Type:company profile
Date:Nov 19, 1990
Previous Article:Changing of the guard.
Next Article:Getting out while they can.

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