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07.2005

Massachusetts Beverage Business

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Article By: Aimsel Ponti

We all know that when you're at the supermarket and convenience store your options runneth over with about a zillion choices of water. Perrier paved the way years ago and then Evian followed suit and now there's no end to the selections. There's water with bubbles, water with vitamins, flavored water, mountain spring water, there's even water with caffeine available. But what about in bars and restaurants? For a long time it seemed the well was running dry in terms of options but there's a shift afoot and bottled water has caught on like a house on fire. People want water, and water that doesn't come from the tap. Nationwide, the bottled water business is a multi-billion dollar industry and on-premise places are getting in on that action. According to the International Year of Fresh Water 2OO3 website, consumption of bottled water in the world increases by 12% every year. Furthermore, here in the US, 54 % of Americans regularly drink bottled water.

Water profits What a sublimely basic way to increase sales: offer bottled water. But is it working? What's changed and have sales increased? "Restaurants and bars are always looking for ways to increase profits, and bottled water is a great way to do this," explains Joy Richard of Boston's Tremont 647 restaurant. Richard also indicated that the standard issue tap water goblet has been reinvented, or at least expanded on, via the bottled option. From the classic French Perrier to the hip Norwegian Voss, people have gotten wise to water and, given the choice, are more than happy to part with a few extra dollars and partake of it. Richard adds that, "most full service restaurants offer water to every guest, and where there were no profits to be made in this demand before, there are increasing ways to meet the demand and increase your check average at the same time. Restaurants and bars can offer expensive imported waters to guests who are willing to spend the extra dollar." Mary Palmer, Manager of downtown Boston's Silvertone Bar & Grill agrees saying, "From an industry standpoint, it creates a new, strong profit center for bars/restaurants that didn't exist as little as five years ago." Furthermore, the demand for bottled water transcends one kind of restaurant; people want it everywhere. Jane Lazgin, Director of Corporate Communications for The Perrier Group says that it's not just the fancy restaurants that are realizing the potential bottled water has. She comments, "For more conventional types of restaurants, bottled water is becoming better known and is ordered as a meal accompaniment, much in the European tradition, as a complement to wine service. It's also ordered frequently as a lunchtime beverage."

WATER, UNDILUTED

Did you know that there are seven categories of bottled water? www.bottledwaterweb.com provided a wealth of information including the following:

Artesian Water is water that comes from a well that taps a confined aquifer in which the level stands at some height above the aquifer.

Drinking Water is another name for bottled water. It must be calorie-free and sugar-free.

Mineral Water is water containing not less than 25O parts per million total dissolved solids. It has a constant level and relative proportions of mineral and trace elements at the point of emergence from the source.

Purified Water is water that has been produced by distillation, deionization, reverse osmosis, or other suitable resources.

Sparkling Water is water that after treatment and possible replacement with carbon dioxide contains the same amount of carbon dioxide that it had at an emergence from the source. (Note that soda water, seltzer water and tonic water are not considered bottled water and are regulated separately).

Spring Water is water that is derived from an underground formation from which water flows naturally to the surface of the earth.

Well Water is water from a hole bored, drilled or otherwise constructed in the ground, which taps the water of an aquifer.

JUST ADD WATER There's just something special about a good, chilled bottle of water and if presented with the option, more and more customers are saying, "Actually, yes, bottled would be great." The thing is, they need to be asked in the first place for this to pay dividends. There are as many reasons as there are types of water that people like to order it. "It has been an alternative beverage for those who don't drink alcohol and want something besides an ordinary glass of water," says David Alphonse, VP of Beverage for the Back Bay Restaurant Group. While some diners will always opt for old-fashioned tap, you'd be surprised how many people really do want the good stuff for one reason or another. "Our servers always offer bottled or tap water to each table and often guests might feel cheap if they order tap," says Richard. Then there's the set that has health concerns. Richard explains it this way: "Tap water is very inconsistent in purity and I think people really think about that more nowadays." Alphonse echoes this sentiment: "It provides safety for those who might be afraid of town water systems." More and more, customers are asking that tap water be taken out of the equation of their dining experiences. "It offers the patron a cleaner, fresher product than tap water and appeals to those who are looking for higher quality beverages in general," adds Silvertone's Mary Palmer. "Dirty Water," is no longer just a song played at Fenway Park when the Red Sox win, but something people really think about. There are many schools of thought on the purity and safety of both tap and bottled water, and as you can imagine extensive studies have been done on both. Some think tap is fine; others wouldn't drink it if their life depended on it. The Environmental Protection Agency reigns supreme over tap water and the Food and Drug Administration lords over the bottled water biz. There is so much scientific study information available that illustrates all the positives and negatives of both tap and bottled water that your head will spin. However when the spinning stops, you'd be wise to have bottled water available to your clientele. People want it, for both social and health reasons so it only makes sense to stock up.

the BIG PITCHER From pizza joints to fine dining establishments, consumers like - and want - their bottled water. "I would guess bottled water sales at Silvertone constitute about 5 to 8% of our non-alcoholic beverage sales," says Palmer. These numbers are likely to continue to grow as more and more customers thumb their noses at tap water and demand the bottled stuff. "I think the water category is so big, and will continue to grow, because there is demand for it, pure and simple," she adds. Joy Richard sees the growth potential as well: "I see a lot of new water companies making their way into the market and doing quite well. There is such a high demand for bottled water today that the market seems to be limitless in its growth." The message is as clear as a glass of Dasani: Stock it, chill it and sell it. Lazgin points out that as far as non-alcohol beverages go, bottled water is second only to soda, and it continues to make a significant dent. "Many choose bottled water as an alternative to beverages that may contain sugar, caffeine, sweeteners, alcohol or other ingredients they may be seeking to moderate or avoid," she explains. "It gets the job done of quenching thirst, with no negatives."

the FLAVOR QUESTION But what about all those new fangled flavored waters that many bottlers are including in their water lines? While many do well in the supermarket and convenience store realm, opinions vary about where it fits in the bar and restaurant industry. "In my opinion, flavored waters do not lend to a bar setting. Why offer flavored water when you can add fresh fruit to a non-flavored water? I don't see flavored water becoming popular as an on-premise offering," comments Mary Palmer. However there is more than one side to the flavor coin as Sarah Livesey, Manager of Blue Ginger in Wellesley points out: "I think that there is on-premise market potential for sparkling flavored water. An old standby for guests at lunch is the 'club soda with a splash of cranberry and lime.' Flavored sparkling waters would tap into that segment of the population that is looking for a lightly nuanced, low calorie, non-alcoholic accompaniment to their meal." David Alphonse's take on it is plain and simple: "I don't see flavored waters doing well in restaurants because it could interfere in the flavors of food." Flavored water will be something to keep an eye on.

GETTING a DAILY DOSE

Here's a crash course on water's health benefits.

Again, www.bottledwaterweb.com came through with some compelling stats.

Apparently many of us are not drinking enough water to keep up with our caffeine and alcohol intake. It's recommended almost universally that we should drink 8 glasses of water a day. But there's a catch; you have to essentially cancel out every caffeinated or alcoholic beverage with more water in order to stay ahead of the curve. Next to oxygen, nothing is more important to the body than H2O. Dehydration is no picnic yet many people frequently run the risk of it. Another interesting point is that there is a gap between the body's need for hydration and the actual sensation of thirst. All the more reason to keep up with your water intake throughout the day. Here are some sobering hydration facts. 75 % of Americans are chronically dehydrated. In 37% of Americans, the thirst mechanism is so weak that it is often mistaken for hunger. Even a slight case of hydration will slow the body's metabolism down by as much as 3%. Lack of water tops the lists as the #1 trigger of daytime fatigue. 8 to 1O glasses of water a day could significantly ease back and joint pain for up to 8O% of sufferers. If your body water drops just 2%, it could trigger fuzzy short-term memory, trouble with basic math and difficulty focusing on the computer screen or on a printed page. Drinking just 5 glasses of water a day decreases the risk of colon cancer by 45% and it can lower the risk of breast cancer by 79% while also decreasing the risk of bladder cancer by 5O%.

GOOD to the LAST DROP Bottled water continues to skyrocket. It is ubiquitous for many reasons. From style to health, all signs point to continued growth. Fizz or no fizz, consumers have indicated that they want it, and they want it everywhere. According to mineralwaters.org, there are 165 brands of domestic bottled water, and globally over 29OO. Massachusetts restaurants are serving up a good variety. Imports and domestics both do well and the future is nothing but bright. It's not a passing fad; it's here to stay. Give the people what they want, give them bottled water. Hendy David Thoreau said it best: "Water is the only drink for a wise man."

WINE, BEER, SPIRITS . . . WATER? What about from a retail standpoint? What's happening with bottled water at the liquor store? Are people putting it into their carts or passing right by it en route to the tequila and red wine? A chat with Gary Park, owner of Gary's Liquors in Chestnut Hill shines some light on the subject. Park says that yes, absolutely bottled water is a viable entity in his store. Perrier and especially Pellegrino all but fly off the shelves and Park goes through over 5O cases a week on average. "Water is something that people use more frequently than liquor," he explains. Park's secret is that he sells it for less than the wholesale clubs or supermarkets and that keeps people coming back. Furthermore, when the safety of tap water is run up the flagpole, the numbers go up. "Every time there is a local scare with water our sales go crazy." As far as retail goes, it's all about the bubbles and the sparkling outsells the still nine to one. According to Park, still water tends to not have the same following and people aren't as brand loyal. Lastly there's the social appeal of bottled water. "It's very chic to have when you're entertaining to put bottled water out, it's a lot classier than tap," says Park.

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