Companynews // 08/10/2001

Market leader is satisfied with development in the first seven months

All in all, the mineral water industry can take a satisfied look back on the first seven months of this year. Although sales of mineral water companies producing in Germany are slightly lower at mid-year compared to the previous year's results, the continuously good weather in July raises hopes for an increase of the year's sales.

Gerolstein, 10 August 2001. All in all, the mineral water industry can take a satisfied look back on the first seven months of this year. Although sales of mineral water companies producing in Germany are slightly lower at mid-year compared to the previous year's results, the continuously good weather in July raises hopes for an increase of the year's sales.

The total water market shows a plus of 6.5 percent - this growth mostly being due to imports of foreign brands.

There continues to be a trend towards non-carbonated mineral water (+ 39 %) and mineral water with a low carbon dioxide content (+ 8 %). Carbonated mineral water, the traditionally strongest segment, shows only a minor growth of 3 percent.

The slow but continuous fall in prices for mineral water continues this year: on average, the prices for mineral water went down by two percent.

Gerolsteiner Group shows solid growth

Germany's largest association of wells secures its top position in the first seven months of the year by a growth of 6 percent. During this time period the group sold 5.3 million hl of mineral water and soft drinks.

A major part of this success is due to the largest single spring, the Gerolsteiner Brunnen GmbH & Co.: by the end of July 2001 sales climbed by 8.5 percent to 4.5 million hl of mineral water and soft drinks. With numbers like these the company once again shows growth above that of the industry's average. "Non-carbonated Gerolsteiner" is especially showing excellent development. Way over market development, sales increased by 96 percent.

"The Gerolsteiner brand name, modern PET reusable packaging, and also the weather situation in July are deciding factors for this magnificent success", says Dr. Peter Traumann, head of management.

Export too increased by additional 12 percent, maintaining Gerolsteiner's export leadership amongst the German mineral water companies. With an export volume of 122,000 hl, over a quarter of Germany's mineral water export is conducted by Gerolsteiner.

Good development amongst the East German affiliates

As planned, the interim results of the two East German affiliates are below the previous year's results. The Glashäger Brunnen GmbH, market leader in Mecklenburg-Western Pomerania, sold 332,000 hl by July 2001 ? all in all 1.7 percent less than the previous year. Within the same time-frame, the Margon Brunnen GmbH in Saxony registered sales of 436,000 hl of mineral water and soft drinks - a minus of 9 percent.

At the beginning of the year, the range of variety at both wells was noticeably reduced in favor of concentrating market clout. Following this reduction of variety, a temporary decline in sales was to be expected in the first half year. Additionally, both companies kept out of the price-competition, concentrating on consistent price and brand management as a way to economic results.

The 23 percent sales increase at Glashäger in the month of July when compared to the previous month, as well as the 53 percent increase at Margon, clearly prove the policy's success. In both companies a lot was invested in marketing and distribution. The resulting schemes are being implemented since early summer 2001.

Jörg Croseck, managing director of both companies in Eastern Germany: "The development of both springs is so far operationally going to plan. After the conclusion of the extensive restructuring procedures, turnaround has been achieved."

After selling its Polish affiliate Dobrawa Sp.z.o.o. on the 1 August 2001, the Gerolsteiner Group expects to advance its market leadership to over 11 percent.