Companynews // 09/03/2009

Gerolsteiner consolidates its market share in the quality water segment

The market leader amongst the brand name mineral water companies manages to further consolidate its value based market share of 16 percent in the segment for premium quality waters. The overall development in the first seven months of Gerolsteiner's consolidation-year 2009 however showed a downtrend, as was expected and planned for during the phase of reorientation. It also matches the current market trend. The company achieved its targets with mineral water and mineral-water-plus product sales of 3.64 million hectoliters (minus 7.5 percent) and net goods sales of 110.5 million euro (minus 7.4 percent), but fell short of the previous years' figures.

Besides the very changeable weather, the decline in business is mostly due to the decline in consumer buying power - which in turn is partially due to the current financial crisis. For the first time since 2003 the water market segment as a whole shows a downward trend, both quantitatively (minus 3.3 percent) as well as in value terms (minus 4.3 percent) (Source: GfK per June 2009).

Gerolsteiner is countering the trend toward cheap water by maintaining a consistent quality initiative and a stable price level. "In times of uncertainty consumers tend to choose products they are familiar with", says Axel Dahm, head of the executive board of the Gerolsteiner Brunnen GmbH & Co. KG. "That is why we have been concentrating investments in our brand name Gerolsteiner and our core business of natural mineral water since the beginning of the year - with some initial success: The new campaign, that will run till the end of the year, has been generating a lot of attention. Consumers are now associating Gerolsteiner with quality even more", says Dahm. Despite the crisis the Gerolsteiner brand has further consolidated its leading edge where values such as quality, trust and likability are concerned (Source: TNS Infratest RI).

"In spite of "mere" consolidation we have taken a step closer toward our target of developing profitable business in a declining market. Our focus on the core business of natural mineral water is starting to take effect." The major segments in regards to sales and value added, Gerolsteiner Sprudel and Gerolsteiner Medium, are performing above target. Gerolsteiner is also participating in the still growing food retailing market segment of brand products in disposable packaging (value based market share 10.1 percent) and has been able to increase its share in the market for reusable glass bottles (sales-based market share 7.2 percent, source: Nielsen).

"In our opinion glass is an excellent material for bottles. Its characteristics suit and highlight the quality standards of our mineral water very well. That is why the consumer will continue to have the choice of Gerolsteiner Sprudel and Gerolsteiner Medium both in the practical and light PET-bottle as well as in the reusable glass bottle", explains Dahm.

Besides its use in the standard household packaging and in the individual packaging for gastronomy and the hotel business, glass also continues to be an important bottle material in Gerolsteiner's international business, especially in the US and in Canada. "In regards to the internationalization of Gerolsteiner Sprudel, number one amongst German mineral waters, we are promoting both in glass as well as in PET", says Dahm. With a sales increase of about 22 percent Germany's leading exporter of mineral water is especially successful in Japan.

"It is our aim to continue with our quality initiative beyond 2009 so as to further increase our market share in the segment for premium quality water", thus the outlook given by Axel Dahm.

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