Vitaminwater: In a class of its own

 Hozay McGaha
 MBAD 626 Z
 11-28-10
 Executive summary
Energy Brands Inc. offers flavored vitamin water drinks. It has four main product lines under the Glaceau brand:
VitaminWater, SmartWater, VitaminEnergy, and FruitWater. Due to rising obesity rates and complications such as
diabetes resulting from being overweight, consumers are seeking healthier beverages. Energy Brands Inc. was very
successful at marketing its VitaminWater as the value-added health drink alternative, and created a new category in the
beverage industry called enhanced water. It is the leader of the enhanced water category. VitaminWater is a powerful
brand whose strength lies in its strength in its marketing strategy. For one, it has strong brand positioning where it
targets a large demographic, and claims to work for “celebrities, soccer moms, superheroes, and you”. It is known as a
stylish product with its bright and cheerful colors as well as its humorous sayings on each bottle. The company also
engages in local and mass promotional activities.
“Nutrient enhanced water” has a lot to offer to its customers, both in terms of real and perceived value. Although
VitaminWater has many positive qualities in its marketing strategy, it is left with some negative ones as well. For one,
they have not effectively maximized their ability to promote their products to the youth (under 18). I think this
demographic is significant order for the brand to grow, build consumer loyalty, and be a lifestyle product rather than a
consumer product. Its bottles are fun and colorful however, with its focus on bright pinks and purples, statistics have
shown that this drink is purchased by more females than by males. VitaminWater is said to be “a great tasting, natural, low
calorie, and nutrient packed enhanced water”.
What Glaceau does not tell customers is about the high sugar content. In my opinion Vitamin Water is marketed for
people who want something healthier than the stuff they have been drinking. While VitaminWater started out building a
strong brand, and has been able to gain a strong consumer base following.
Company Background
 Energy Brands, Inc. was founded in 1996 by J. Darious Bikoff. It is
based in Whitestone, New York.

 As of June 7, 2007, Energy Brands, Inc. became a subsidiary of Coca-

Cola Co. They bought VitaminWater maker Glaceau in a cash deal
valued at $4.1 billion.

 Energy Brands, Inc. offers flavored vitamin water drinks. It has four
main product lines under the Glaceau brand: VitaminWater,
SmartWater, VitaminEnergy, and FruitWater.
 Why?
The force behind the success of Vitaminwater is
their ability to effectively market themselves to all
age groups. The topic that I chose to research was
their marketing habits and innovation. Glaceau
was able to develop a product that so unique that
began its own market.
Research Objective
Glaceau has taken some recent backlash because they
market their product to be a health drink when in fact it
is actually not very healthy and has a high sugar
content. Although they have taken this critism, they
have continued ot grow within the market. I believe
that the reason that they are successful is because they
have managed to make their brand more of a life style
brand rather than just a consumer beverage. I believe
this is a rare case where the quality of a product is
placed behind trendiness.
Tools for success:
Market growth:
 In 2007, the functional beverage market reached $9.8 billion.
 From 2002-07, there was an increase in the market of 30% at current pricing,
and 14% after accounting for inflation.
 40% of all regular soda-drinking respondents are drinking less soda as
compared with a year ago.
Positioning:
 Claims to work for “celebrities, soccer moms, superheroes, and you”
 Energy Brands' Glaceau VitaminWater is scoring in the “hipness” market, with
a dozen drinks in a rainbow of colors, each with a name that promises more
than thirst relief.
 18-49, peak positioning is 35-49.
 60% of drinkersare female Caucasian.
 College graduate with income range of 30k – 100k.
 Problem
Even though Glaceau has the majority of the market
share of the enhanced water beverages they can still
grow in the overall bottled water segment. They need
to find new ways of reaching the under 18
demographic and continue to put attention into the
urban market segment.
The Mintel figure below shows the number of new products launched in the U.S. during 2002-07, with first quarter data for 2008.
This graph was taken from beverage marketing international corporation. It
represents the number of beverages consumed in the US and the share of volume
that each beverage segment represents.
Tools for Success continued….
Variety:
VitaminWater Flavors Include:
●Power- C : Dragonfruit (Vitamin C + Taurine)
●Energy: Tropical Citrus (Vitamin B + Guarana)
●Revive: Fruit Punch (Vitamin B + Potassium)
●Multi-V: Lemonade (“Vitamin A to Zinc”)
●Focus: Kiwifruit-Strawberry (Vitamin A + Lutein)
●Essential: Orange-Orange (Vitamin C + Calcium)
● Formula 50: Grape (50% Daily Dose of Vitamins)
●Defense: Raspberry-Apple (Vitamin C + Zinc)
●Rescue: Green Tea (Vitamin C + EGCG)
●Endurance: Peach-Mango (Vitamin E + Ribose)
●Vital - T: Lemon Tea (Vitamin C + Vitamin E)
●Balance: Cran-Grapefruit (Vitamin C + Glucosamine)
●B-Relaxed: Jackfruit-Guava (Vitamin B + Theanine)
●Charge: Lemon-Lime (Vitamin B + Electrolytes)
●XXX - Acai-Blueberry-Pomegranate (Triple Antioxidants)
Celebrity endorsements
several celebrities have been given their own VitaminWater flavors. This celebrity-
factor has grown substantially since Coca-Cola took over.
VitaminWater has been strategically placed in both male and female targeted, humor-
based movies, such asDodgeba ll and Sex and the City.
Vitamin Water Celebrity and Athlete Endorsers (sample list):
Carrie Underwood
Kelly Clarkson
Jon Walker
David Lee
Josh Howard
Tony Parker
Shaquille O’Neal
Lebron James
David Ortiz
Tom Brady
Recommendations
 VitaminWater should add limited edition flavors to add buzz and some curiosity to the
flavor and product. Consistent release of new products keeps current customers on the
lookout for the next flavor.
 Glaceau should also consider adding two liter as well as gallon versions to compete with
the carbonated soft drinks, and to encourage mass and family-style consumption.
 VitaminWater Popsicles and lollipops (VitaminPops) A way to attract kids to the brand
early as well as to lure in parents by offering a fun way to deliver daily vitamins.
 Also have seasonal events where they have prizes that they give away if you win them.
The winner would be determined by looking at the bottom of the twist-off cap.
 The VitaminWater 20oz average unit price range from $1.20 to $1.50 in the grocery
stores and the price for 32oz range from $1.90 to $2.20. The price of VitaminWater needs
to stay relatively the same going forward. People tend to think of a product as lower
quality when it is priced significantly lower than its competitors
 Competitor analysis:
Vitaminwater’s main competitor
Propel:
$0.99 per 16.9oz bottle.
Purpose to prevent dehydration on sports
team.
PepsiCo owned company.
18-49, peak positioning is 35-49
Proven benefits of rehydration over water
Market leader
55% of drinkers are female Caucasian
with no children
Brand culture focus on sports related
activities with no association to main
brand Gatorade.
Lifewater:
$1.00 per 20oz bottle.
Subsidiary of PepsiCo since
2000.
52% of drinkers are male.
12 - 50+, peak demo 12-17.
Vitamin enhanced drink.
Cheaper unit
price over
VitaminWater to cut into
their market share
Direct approach to compete
with VitaminWater.
 Works Cited
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Kent Says. Retrieved from Business Week: http://www.businessweek.com/news/2010-10-
31/coca-cola-may-boost-china-investment-chief-executive-kent-says.html
BMC Marketing Reports. (2010, October). 2010 Up-and-Coming Beverage Categories and
Companies in the U.S. Retrieved from Beverage Marketing Company:
http://www.beveragemarketing.com/?service=publications&section=bottledwater
Coca-Cola. (2010). Coca-Cola's vission, mission, and values. Retrieved from Coca-Cola:
http://www.coca-cola.co.uk/about-us/coca-cola-mission-vision-statement.html
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Business day: http://www.stuff.co.nz/business/175971
Hein, K. (2010, August 7). Note To Coke: Glacéau Biz Plan Is Heating Up. Retrieved from
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vnu_content_id=100295108
Wanjiru, M. (2009, november 17). Why Vitamin Water Is Presently One Very Popular Product
On The Market. Retrieved from Article Snatch (ads by google):
http://www.articlesnatch.com/Article/Why-Vitamin-Water-Is-Presently-One-Very-Popular-
Product-On-The-Market/313323