Companynews // 01/29/2003

Germany's largest single well in 2002 increases turnover and number of jobs while maintaining sales level

Gerolstein, 29 January 2003. The Gerolsteiner Brunnen GmbH & Co. defended its position as Germany's leading single well in the 2002 business year in a most difficult market environment. With sales stable at 7.5 million hectoliters of mineral water and soft drinks, and a turnover of 207.2 million euros, Gerolsteiner achieved a turnover increase of three percent. The number of jobs increased by two percent to 791.

The export volume was raised by four percent to 210 thousand hectoliters. Gerolsteiner thus remains the by far largest exporter of mineral water in Germany.

"With these results we again confirm our top position as market leader amongst the German mineral water companies". Jörg Croseck - part of the company management since 9/1/2002, responsible for marketing, distribution and personnel - is satisfied with the development in the year 2002.


Concentration on core business and consistent brand management

Gerolsteiner Sprudel and Gerolsteiner Stille Quelle were able to defend their share in the market and continue to be Germany's most consumed mineral waters: Gerolsteiner Sprudel defended its stable top position in the segment of carbonated mineral waters with a value based market share of 9.9 percent.

Gerolsteiner Stille Quelle has strengthened its leading position on the market for CO2-reduced mineral waters and now holds a value based market share of 15.6 percent.

The positive development of the Gerolsteiner Brunnen GmbH & Co. in the year 2002 is the result of consistent brand management and the strategic focus on the umbrella brand name Gerolsteiner. These are also the reason for Gerolsteiner's selling off its 100 percent shares in the companies Glashäger Brunnen and Margon Brunnen as well as the soft drink brand Gerri retroactively to 1 January 2003.

"We are concentrating our efforts on the strong and attractive brand Gerolsteiner as well as on our new product development Gerolsteiner Naturell. With this product we aim to satisfy the requirements of consumers of non-carbonated waters." Gerolsteiner Naturell, a premium product in the growing segment of non-carbonated mineral waters, has been available for purchase since 1/15/2003. Gerolsteiner will begin an extensive communications campaign on the subject in April 2003 and is aiming for a market share of ten percent within the next two years.


Returnable and PET packaging make the difference

More than 90 percent of beverages sold by Gerolsteiner in 2002 were bottled in reusable packaging. Additionally, for the first time the amount of mineral water sold in PET bottles was higher than that in glass bottles. 56 percent of household bottles sold by Gerolsteiner were Gerolsteiner PET bottles. This shows that the light plastic returnable bottles - introduced to the market by Gerolsteiner in 1998 - have managed to establish themselves.


The German water market - an overview

According to the polling firm A.C. Nielsen, the total water market managed to achieve a sales increase of 6.3 percent in 2002. Overall sales of packaged water however have only increased by four percent. This highlights the disproportionate sales increase of bargain offers. They are responsible for more than ten percent of the growth in 2002.

Thus the two-edged development on the water market, that has been going on for the past couple of years, is continuing: volume growth amongst low-cost suppliers, turnover growth amongst few consistently working brand name companies.

The mineral waters with a high CO2 content are still the strongest segment ? with a market share of 55 percent (+ 4 percent). On second place, with a market share of 27 percent (+ 5 percent), are the mineral waters with a reduced CO2 content, followed by the non-carbonated waters. Their market share increased by 27,5 percent and is now at 14,1 percent.

In packaging, sales of non-reusable containers increased by 42 percent and are now at 26 percent, while the percentage of reusable containers sank to 74. This development is primarily linked to the seriously increased water sales by the discount trade. The quota of glass packaging has shrunk by twelve percent and is now at 57 percent. PET bottles show an increase of 50 percent and now have a market share of 42 percent.