The world of drinking water is getting dirty.
Bottlers are going to war over the trendiest new bottled beverage – enhanced water – using arm-twisting, lawsuits and tens of millions of dollars in promotional benefits to dealers.
Enhanced water is essentially water, lightly treated with vitamins, colorings, herbs, fruit essence or electrolytes, all purporting to improve health and stamina, among other benefits.
“Who would have thought that it would get so much attention,” said John Sicher, editor of Beverage Digest, a trade journal.
Sales of fluffed-up water have skyrocketed by seven-fold at some companies and lured major players to the trough.
Luxury-goods billionaire Bernard Arnault has plunged into vitamin waters, and Coca-Cola and Pepsi are ready to launch their versions of the enhanced liquid early this summer.
Profits are so high from the waters – which sell for $2 and up for a small bottle – that some bottlers are accused of ripping off each other just to get their hands on a product line.
A federal judge in Manhattan has issued an injunction and a scolding to AriZona Tea for hijacking the popular VitaminWater line from its creator, Energy Brands, a New York company partially owned by the French tycoon Arnault.
A federal complaint filed by VitaminWater accused AriZona Tea’s owner – beer distributor Domenick Vultaggio – of launching an identically packaged WaterAid+ brand just weeks after he was rebuffed in a bid to buy into Arnault’s venture.
The complaint said AriZona Tea had been distributing the medicinal-looking VitaminWater in 43 states, but that Vultaggio wanted to make a joint venture with VitaminWater and was turned down.
Shortly afterward, the complaint said, AriZona Tea introduced an almost identical version in retail outlets and failed to properly distribute VitaminWater.
Judge Jed Rakoff issued an injunction Wednesday ordering AriZona to stop shipping its water product until after a trial in June. AriZona Tea and Energy Brands had no comment on the legal fight.
Rakoff said in his order freezing AriZona’s shipments that “there is evidence that this similarity [in products] is far from coincidental.”
Rakoff said Vultaggio and his company “only launched their WaterAid+ product after having made a failed attempt to acquire interest in VitaminWater in 2001.”
Industry experts think that when Coke and Pepsi enter the fray, it’s going to wipe out many of the smaller players like Energy Brands and AriZona Tea.
“Five years ago, Coke and Pepsi weren’t even in the bottled-water business. Today, they have the No. 1 and No. 2 bottle-water brands in the U.S.,” said Beverage Digest’s Sicher.
“Everyone’s going to face a huge challenge from Coke and Pepsi.”
Bottled water is the second-largest-selling beverage after soft drinks, with retail sales last year of $7 billion, compared to soda pop sales of $62 billion.
The enhanced water brands are popping up everywhere. Reebok sells its own vitamin-type water in health clubs as Reebok Fitness Water.
Sports giant Gatorade’s slipping market share has prompted the company to launch Propel fitness water, packaged in a jock-style squirt-top bottle.
Ice tea giant Snapple is selling its healthy water Elements in a space age-styled silver bottle. Other bottlers of power waters include Veryfine’s Fruit2O and Healthy California .
VitaminWater said it has spent $9.8 million promoting its waters, gaining product placements in movies such as “Legally Blonde” and TV shows including “Law and Order” and “100 Centre Street.”
Sales rose to $21.4 million last year from $2.5 million the prior year. So far this year, sales are running 250 percent ahead of 2001, or abut $8 million in the first quarter this year.
H2-Oh-Oh!
Water is SO last year! This year, the beverage of choice is “enhanced water” – plain ole’ aqua spiked with vitamins and herbs. It’s so hot, all the beverage giants are fighting for a piece of the market.
What’s out there now:
EnergyBrand’s Vitamin Water
Reebok Fitness Water
Healthy California
Gatorade’s Propel
VeryFine’s Fruit20
Snapple’s Elements
What coming:
Coke’s Dasani Nutriwater
Pepsi’s Aquafina Essentials