“Over responding to a Crisis”. Perrier On Top In late 1989 Ronald Davis the President of Perrier’s U.S. Operations was extremely happy since Perrier’s.

“Over responding to a Crisis”

Perrier On Top In late 1989 Ronald Davis the President of Perrier’s U.S.

Operations was extremely happy since Perrier’s U.S. sales had risen from $40 million to more than $800 million at retail

At the same time in May of 1989 in an issue of Fortune the company was depicted as one of six companies that compete best

Fortune quotes, “These are companies you don’t want to come up against in your worst nightmare. In the business they are in, they amass crushing market share.”

Perrier on Top Perrier was globally known for its quality due to

low mineral content (particularly sodium)

This occurred because the water spent very little time filtering itself through minerals

While the water flows underground it met with different gasses which allows the water to capture its well known fizz

Not only was Perrier known for being the best, Perrier owned nine other brands including: Poland Spring, Great Bear, Calistoga, and Ozarka

Perrier on Top Bottled water was the fastest growing segment of

the U.S. beverage industry

Perrier controlled 24% of the total US. Bottled-water business

Perrier was dominating almost 50% of the imported bottle water sector

Competition like Coca-Cola, PepsiCo, and Anheuser-Busch was hardly affecting the sales of Perrier

Perrier Takes a Hit On a Friday , February 1990 news reached Perrier’s

executive suite that traces of benzene had been found in its bottled water

Ronald Davis, President of Perrier Group of America ordered an intensive recall of all Perrier bottles in North America

Few days later Perrier S.A. expanded the recall to the rest of the world

Good? Or Bad?

Perrier Caught in a Lie At first the excuse given by Perrier officials was that the

contamination occurred because an employee mistakenly used cleaning fluid containing benzene to clean the production-line machinery that fills bottles for North America

Traces of benzene were now found in bottles of water in Holland and Denmark, poor Perrier was now caught in a lie

Perrier now finally admits that benzene naturally occurs in Perrier water but the problem was now visible because the workers forgot to replace the filter

?

Can It Get Worst? Competitors were obviously salivating at the

opportunity that had just come about

Competitors like Evian, Saratoga, San Peligrino, PepsiCo's H2OH

Due to this drastic recall Perrier was completely out of the market for a total of 5 months

Al Ries, a consultant, quoted for the Wall Street Journal, “If I were Perrier, I would make a desperate effort to reduce that time as much as possible, even if I had to fly it in on 747s from france.”

Recall Necessary?

Ronald Davis, President of North America Perrier, later pointed out that the company didn’t have to recall all 70 million bottles of U.S. inventory

Health officials noted that the benzene levels found did not pose any significant health risk, the only risk was the image of Perrier

Did this recall really help Perrier???

Consequences By the end of 1990 it was very obvious that Perrier was

not going to regain its market position

Now new big shots had emerged like, Saratoga, La Croix, and Quibell

Evian at the time was the biggest winner of all

Perrier’s sales had only reached 60% of pre-recall levels

Perrier did have a sales gain of 3.7% in 1990 but that was because of performance from domestic brands like Calistoga and Poland Spring

What about Now? The Top 10 Bottle Water Brands in the US by wholesale

dollar sales and market share.

1. Aquafina (PepsiCo) $936 million 11.3 % 2. Dasani (Coca-Cola) $834 million 10 % 3. Poland Spring (Nestle Waters) $649 million 7.8% 4. Arrowhead (Nestle Waters) $546 million 6.6% 5. Deer Park (Nestle Waters) $356 million 4.3% 6. Crystal Geyser (CGWC) $335 million 4% 7. Ozarka (Nestle Waters) $236 million 2.8% 8. ZephyrHills (Nestle Waters) $215 million 2.5% 9. Ice Mountain (Nestle Waters) $208 million 1.7% 10. Evian (Coca-Cola/Danone) $145 million 1.7%

What about Now? The Top 10 Bottle Water Brands in the UK by

wholesale dollar sales and market share.

1. Private label2. Volvic (Danone)3. Evian (Danone)4. Highland Springs5. Vittel (Nestle Waters)6. Buxton (Nestle Waters)7. Danone Activ (Danone)8. Strathmore (Constellation brand)9. Perrier (Nestle Waters)10.Aqua Pura (Well Well Well)

Perrier’s Vision

What do They want to be?

Perrier vision is to be the number one sparkling mineral water in the world

Why do we exist?

Perrier’s mission is to offer bottled water to meet consumer needs anywhere, anytime

Mission Statement

Perrier’s Values Perrier is a competitive business that also

understands the importance of how business is conducted.

“Our people, who are dedicated to producing high quality products and maintaining top service levels, share our aspirations and beliefs, a creed of respect for others. The company strives to act responsibly in its business and workforce practices, to be good stewards of the environment and to be a good neighbor in the community where we live and work.”

Perrier’s Strategy Perrier’s strategy is “Perfect Anytime”.

Perrier plans being perfect anytime by providing the best tasting sparkling water on the market. They are not only marketing for the rich and famous, they want to be an everyday thirst quencher.

Major Problems

1. Benzene found in the water

2. Managements drastic decision to recall all Perrier bottled water

3. Management tried to cover up the issue by lying

4. Staying off of the market for 5 months

5. Management believed that this five month hiatus would not hurt them (over confidence)

S.W.O.T. Analysis

1. S = Strength

2. W = Weakness

3. O = Opportunity

4. T = Threats

1. Part of a large corporation, Nestle water corp.

2. After benzene threat lost popularity, other brands came up

3. Everyone is more health conscious, water bottles are back in the game

4. Large competitors: Coca-Cola, PepsiCo, Danone

Possible SolutionChange their Whole Image

In the past it has been seen when companies lose their reputation rather than trying to fix it they create a new identity

Most people don’t even notice it’s the same company rather they think it’s a new company all together

For example: Firestone is now known as Bridgestone, same company but reinventing their reputation after the bursting tire incident

I feel if Perrier comes up with a new identity they will gain more popularity faster than trying to clean their old one

Possible SolutionTarget a different Market

I think they can change the design of Perrier, same bottle same name but different target

They can make Perrier a drink of the youth

Drinking Perrier would not only be a drink but a statement

Management would have to change their mindsets and past goals and now have to change their marketing campaigns for a new age group, primarily 18-25

This group will probably not even know what happened 18 years ago

I feel Perrier will succeed under this idea because water is the drink all young people are into, with the fad of being in shape and getting ready for the summer, Perrier can grasp a lot of attention

The End