Support Marketplace

Coca-Cola ventures again into U.K. waters

Advertisements for Glaceau Smartwater emphasize "vaporizing procedures" and "natural processes". 

Soft drinks giant Coca-Cola used ordinary tap water as the source for a fancy brand of bottled water being promoted in Britain, and now they're hoping the country will forget all about it.

Ten years after the calamitous launch of its Dasani bottled water in Britain, Coca Cola is getting back into the British bottled water market. Later this summer the drinks giant will introduce its leading American brand – Glaceau Smartwater – into the United Kingdom.

Coke has good commercial reasons to take the plunge.

“Bottled water is a growing market in the U.K., and that’s something you can’t say about any other drinks category,” says Olly Wehring of Just-Drinks. “Bottled water sales are worth 1.4 billion pounds ($2.35 billion) a year and are growing at 6 percent annually in Britain. While other categories, like colas, are stagnating chiefly due to health concerns.” 

But the rollout of Glaceau Smartwater has revived painful memories for Coca Cola. The Disani launch in 2004 was a marketing and manufacturing disaster. 

"The problem was they were discovered to be using tap water bought from the Thames Water utility, filtering it, putting it in a bottle and charging a wonderful margin,” says marketing expert Allysson Stewart-Allen.

“Matters got even worse when Coke learned that as a byproduct of the filtering process, you got a chemical in the water: bromate. And this bromate is - at high levels - a potential toxin.” 

Coke pulled half a million bottles off the supermarket shelves and pulled the brand out of Britain.

Ten years on, does the bitter aftertaste of that debacle linger among British consumers, and will it put them off buying Coke’s new offering? Marketplace sampled the views of some bottled water drinkers in a small shopping centre outside London. 

“I would probably try Smartwater just out of curiosity,” ventured Dick Pimm. “To be honest I didn’t know about the Dasani disaster.”

Rosie Pearce said she would probably not buy the new drink. “I’m a bit anti-Coca-Cola because it’s a large contributor to obesity. It’s probably getting more into bottled water as a way of deflecting criticism away from some of its more harmful products.”

Peter Woodman was not so hard on the drinks giant.

“I would probably try Smartwater. I think it would probably be fine,” he said

“And no I won’t be put off Coca-Cola products by the Dasani disaster. I’d give them a second chance!” 

Coca-Cola is steering well clear of tap water this time around. The new product will be distilled from vaporized spring water with electrolytes added. The company has clearly been chastened by the ill-fated Dasani rollout and has now set its sights on a major new goal. While it has the third largest share of the world’s bottled water market , it has only a 1 percent share of Britain’s. Coke is aiming to slake the U.K.’s growing thirst while feeding its own ferocious hunger for expansion and profit.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

Soft drinks giant Coca-Cola used ordinary tap water as the source for a fancy brand of bottled water being promoted in Britain, and now they're hoping the country will forget all about it.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...