Perrier, Striving to Bounce Back, Targets California

It’s summertime, and the livin’ is easy. At least that’s the word from Perrier Group of America as the company rolls out Phase II of its campaign to get squeamish sippers back in the market for “Earth’s First Soft Drink.”

Sure, there was benzene in it once, but it’s gone now. All the Indian-club-shaped bottles were pulled from the shelves in February. A three-month drought ensued, but in most major markets, that’s over too.

All that’s left is a $25-million ad campaign and an all-out effort to wrest shelf space back from the competition in shops, bars, hotels and restaurants. Perrier says it’s ahead of schedule, but its enemies in the water wars are dubious.

Consider the flurry of news releases faxed across the country in the days after Perrier launched its new radio ads in Southern California last Monday.

“After only two months of its planned 18-month relaunch program, the Perrier Group of America announced Tuesday that it has already regained distribution in 80% of its retail outlets,” Perrier trumpeted.

Unconvinced, La Croix Water Co. of La Cross, Wisc., fired off a rejoinder two days later: “Officials of the La Croix Water Company announced today that its La Croix Sparkling Water has experienced unprecedented growth since the worldwide recall of Perrier water last February.”

Perrier returned to the Los Angeles market--where it spends 15% of its advertising budget--on May 8, after being unveiled earlier on the East Coast. Industry experts contend that cracking health-conscious California is crucial to the company’s success.

“In Los Angeles food stores, we’re back to almost equivalent distribution to where we were before the recall,” Lazgin said. “For restaurants, we’re at 50% of where we were before the recall. We hope to reach 70% by Aug. 1.”

Perrier will not disclose precise sales figures, and the numbers it does release are a lot murkier than its water. Company officials said sales of the regular, unflavored water in May, 1990, were 67% of total Perrier sales in May, 1989.

“We are gaining ground in regular Perrier,” said Perrier spokeswoman Jane Lazgin. “Generally, 60% of our sales are regular Perrier and 40% of our sales are Perrier With a Twist (flavored). So we’re 7% ahead as we re-enter the market. We expected to be probably about half that.”

The beleaguered firm, however, has yet to start producing its flavored products, probably won’t begin rolling them out until the end of the summer and won’t have distribution in place until November or December.

The water’s absence--three months in major markets and much longer in smaller cities--gave its small regional competitors a chance to make a splash in the $2.3-billion bottled water business. And while no one company bubbled to the top of the market, experts said, several did very well.

“Perrier hasn’t recovered completely,” said Greg Prince, features editor for Beverage World magazine. “The fact that they’re selling water at all is pretty good. But other brands have had an opening. . . . San Pellegrino, Evian, Crystal Geyser come to mind as ones that got a foot in the door.”

La Croix, which is sold in 50 states but is not a big player on the West Coast, began a media blitz of its own, less than 24 hours after the Perrier recall was announced. It established a consumer hot line and published print advertisements nationally.

“In roughly a month interval of the recall, our business escalated 300%,” said William Eiler, spokesman for La Croix. “We have sustained this success. Our market share in the Midwest increased 48% from the beginning of February to the end of June. We’re up 84% in the Chicago area.”

Calistoga-based Crystal Geyser saw its sales jump 50% over last year’s performance, particularly in California, said Peter Gordon, company chairman. California is the top state in bottled water consumption, with 36% of all sparkling and still waters downed within its boundaries.

“We really picked up a lot of accounts across the country,” Gordon said. “When Perrier had to remove all of their products from the market, we were prepared to fill the void. What has been very encouraging is that we have held on to the business.”

If restaurants, hotels and bars show no fidelity to their fumbling former favorite, Perrier could be in trouble, said Gary Hemphill, editor of Beverage Industry magazine. Distribution is still not back entirely, and that could hurt the company as the crucial summer season unfolds.

“They’re still not where they’d like to be,” Hemphill said. “It’s still a problem for them. It’s going to hurt their summer.”

But Perrier’s Lazgin insists that recovery is more than just possible; it’s on the way. The distinctive green bottles are back in 50% of the restaurants, bars and hotels where they reigned supreme before, including Lutece and 21 in New York, Dominique’s in Washington, Boston’s Grill 23 and Ma Maison and Le Chardonnay in Los Angeles.

“At retail, we’re very pleased with where we are, but we expected to retain much of our shelf space,” Lazgin said. “In restaurants, which you have to call on a one-by-one basis, it takes so much longer. Given those limitations to distribution, we think we’re doing pretty well.”