Has Coca-Cola Co's Dasani water brand got a sparkling future in the US?

In soft drinks, a change of mayor meant the spotlight returned to New York last week. Is the ban on large sugary drinks in restaurants, movie theatres and from food carts dead and buried, or merely on hiatus as Bill de Blasio makes himself comfortable? Still in the US, regular commentator Ray Rowlands considered the potential for Coca-Cola Co's sparkling Dasani.

Following recent reports that PepsiCo is planning to launch a premium water brand in the US, Ray Rowlands of Drinksinfo Ltd takes a look at what arch rival Coca-Cola Co is up to in the country’s bottled water market.

Coca-Cola recently announced the US release of Sprite Cranberry, the first new Sprite flavour in eight years. The firm is also rumoured to be about to introduce a line of cold-activated cans that lets consumers know when the contents is cold enough to drink.

Meanwhile, as the year draws to a close, the company has announced the launch of Dasani Sparkling water in the US, ready in time for Christmas, with a national roll-out scheduled for February next year.

The sparkling variation of Dasani represents the latest phase in a long line of developments for this particular brand. Previous extensions have included Dasani flavoured still water, which appeared around 2002, and Dasani Plus a line of vitamin-enhanced drinks released in 2007.

Last year, Coca-Cola launched Dasani Drops. The arrival of the 'flavour enhancer' extension followed the massive US success of Kraft Foods’ MiO, launched in early-2011.

Dasani, it seems, has become a focal point for company innovation. Indeed, Coca-Cola is said to have handed back marketing responsibility for Danone’s Evian water brand in the US so that it can concentrate on the Dasani brand.

Dasani was first launched in the US around the turn of the century as a still purified (table water) product, manufactured using the process of reverse osmosis to remove impurities. The brand has performed well and, at its peak, sold over 2bn litres a year in the US alone.

It didn’t fare so brilliantly in the UK, however. Launched in the country in 2004, Dasani was soon pulled from the shelves: The British, it seems, are not great supporters of tap water, at least not bottled tap water. This failure served to deter further European expansion plans. Nevertheless the brand has gained a footing elsewhere around the world with an additional presence in Africa, Asia, Latin America and the Middle East.

The launch of Dasani Sparkling is an interesting move, especially when one considers that only around 5% of US bottled water market comes from carbonated variants. Despite this, the brand will still come up against some strong competition: Crystal Geyser, from the Japanese Otsuka Group, Nestle’s Poland Spring and imported Perrier (also from Nestle) are amongst the best sellers.

But, the first two of these - which are also available in still format - are spring waters, whilst Perrier is a mineral water. There are no major purified brands within the carbonated segment, so perhaps this is where Coca-Cola sees its opportunity.

Dasani Sparkling is unsweetened (so no calories), lightly sparkling and comes in both plain and naturally-flavoured formats, namely apple, berry, lemon and lime. The apple-flavoured extension is a bit of an outside runner. But, the overall timing of the launch is good; flavoured waters are gaining in popularity as consumers move away from Carbonated soft drinks. Water, flavoured or otherwise, is clearly seen as healthier than soda.

From 2009, the packaging for still Dasani in the US has moved to Coca-Cola's more bio-degradable PlantBottle, which uses up to 30% plant-based material. Since the swap, the brand's sales have certainly recovered. The new sparkling variant will also adopt this form of packaging, which is a move in the right direction (although the PlantBottle is not without its eco opponents).

Dasani Sparkling will also be made available in cans.

On a global scale, Dasani is Coca-Cola’s biggest bottled water brand. It also features as one of the top five sellers in North America, and the US is by far its largest market. This latest product extension should serve to broaden Coca-Cola’s standing in its homeland, but whether Dasani Sparkling can subsequently be manoeuvred to achieve an international following of the like enjoyed by Coca-Cola, Fanta or Sprite is open to debate.

The original article is here.