Pepsi's Aquafina "mainstream" bottled water nears completion of national rollout. Brand is now in "about 75%" of Pepsi US system, according to Pepsi senior marketing manager Katie Lacey. Purified, non-spring-sourced Aquafina produced at 11 sites in US: 8 COBO plus 3 co-ops. Sold in 20-oz Pepsi swirl plus 1-liter and 1.5-liter proprietary PET bottles similar to swirl; also 20-oz 6-packs. Market share. In IRI convenience/gas channel data for bottled water in under 64-oz packages, Aquafina ranks #2 with 7.7 share year-to-date through 5/18/97; brand's share up +3.7 vs same period last year (see table).

Interview. BD talks to Lacey: Why bottled water? "It's a growing category, and it's part of being a total beverage company. There's a lot of consumer demand."

Distribution? "It's in about 75% of our system ... It's now coming into New York. It's been in Los Angeles for about 2 years. It went into Chicago this spring. We started in Wichita in 1994 with a test market. Then expanded into CA, TX and our Great West business unit. We moved into the east coast this year ... By year-end we anticipate very few gaps in the system."

Allow co-existence with other waters at Pepsi bottlers? "Yes, if bottlers wish to have multiple price tiers in the water category." Any bottlers not take it on due to competing waters? "Not that I'm aware of."

Market position? "Aquafina is not a premium brand, it's a mainstream brand. It competes against ... Dannon and a lot of the regional Perrier brands."

Target customer and positioning? "Mainstream adults 18-34 ... This will paint a picture of the role Aquafina is playing in the category. It was explained to us by some consumers in Boston (focus group) when asked to describe bottled waters they were familiar with. They described premium import(ed) waters as a woman in a black dress, in a bar, drinking a martini. She would have absolutely nothing to do with them. The local brands were the guys they grew up with, the guys they went to high school with. They were in flannel shirts, shooting pool in the back room. So, (we asked) 'Is there anybody missing?' And they said, 'Yes, we'd like to see somebody a little bit more fun, a little bit more interesting. Somebody who is more approachable than the woman at the bar and a little bit less familiar than these guys we grew up with.' (Aquafina represents) that person. Fun, approachable, interesting."

Pricing? "1-liter now averages between 75¢ and 85¢. The water market varies a lot, market-by-market, so like soft drinks it's hard to say exactly what the price will be."

Vending potential? "It's in vending right now. We have dedicated vendors. We also have it as part of our 20-oz total variety vendor."

How produced? "It's reverse osmosis and carbon filtered. Reverse osmosis takes out impurities and carbon filtration (removes) any odors ... Aquafina is (produced at) 11 sites in the US. (Not all) soft drink bottlers can run it ... It's a high tech, state-of-the-art purification system." Minerals added? "No." Disadvantage not from spring? "Consumers have told us a spring source is not what they're looking for. They (want) taste and refreshment ... Bottled water is the ultimate refreshment beverage, and we guarantee consistent great taste and purity at a reasonable price."

Some bottles identify Pepsi on label. Others don't. Why? "States have different regulations requiring how you identify the bottler. In CA it's on the label. But the majority of the states are very comfortable with it being on the cap, which is where it's going to remain." Pepsi affiliation key to Aquafina marketing? "No."

Flavored or caffeinated versions ahead? "Not at this time."

Channel strengths? "It's done phenomenally in the (convenience and gas) channel where there really are no national brands competing other than Evian. Right now ... it's the #2 brand in C&G channel. So that shows you how big the opportunity is, and how well Aquafina has done."

---

---

© 1997 Beverage Digest LLC. See site copyright notice for further information.