The latest news, trends, analysis, interviews and podcasts from the global food and beverage industry

*The history of Chaudfontaine dates back many centuries, with documented evidence on the water’s spring source found in a charter from the Bishop of Verdun in 1250 describing ‘Chauve-t-eau-Fontaine’. *

There are many other fascinating milestones in the history of Chaudfontaine, such as the fact that in 1926 two different companies tapped the same water source, later merging into a single business in 1938. Moreover, the reason for the unique mineral taste of Chaudfontaine was explained in 1983, when hydrologists discovered that the water makes a 60 year journey through protecting and purifying rock layers from a depth of 1,600 metres before emerging at the surface at 37°C.

June 2003 stands out as being the most important recent landmark. This was the moment when Coca-Cola Enterprises teamed up with The Coca-Cola Company to snap up the Chaudfontaine business for €31 million ($45 million) in cash and assumed debt from Iranian businessman Abbas Bayat.

Since that time, Coca-Cola Belgium has poured significant levels of investment into production, packaging innovation, distribution and marketing. In fact, around €46 million ($67 million) has been spent on the Chaudfontaine plant; €20 million ($29 million) on new bottling lines from German company Krones; €16 million ($23 million) on new packaging and €10 million ($14.5 million) related to quality, environment, safety and hygiene. Support from the Coca-Cola sales force has also been a key factor in delivering success.

Better still, the plant participates in the overall Coca-Cola strategy to increase water and energy efficiency and decrease waste. In 2006, Belgium based operations increased water efficiency by 9.8% and energy efficiency by 2.3% per litre of product. Over 97% of the solid waste of the Chaudfontaine plant is recycled. Furthermore, as a result of the upgrading of the production site, the greenhouse emissions of the plant have decreased to 63.7% of their 2003 level.

However, Coca-Cola in Belgium doesn’t blow its own bottles on site so the glass bottles are shipped through a Dutch supplier. Nevertheless, these bottles contain on average 60% recycled glass.

Brand revitalisation

Since 2003, the Coca-Cola group has also importantly devoted considerable effort towards developing the brand in an innovative way.

Country Director Belux Gaëtan Van Maldegem told water innovation: “Since Coca-Cola acquired the Chaudfontaine brand, our Belgian marketing team has completely rebuilt the brand, based on values that relate to the uniqueness of the water.”

In April 2004, a year in which the business celebrated its 80th anniversary, Coca-Cola unveiled a logo for Chaudfontaine to enhance its brand identity. A simple rendering of a dove, a symbol expressing purity and emotional warmth, takes pride of place on all product packaging beside the brand name. The move demonstrated slick marketing as the brand was able to modernise, while retaining strong messages to consumers about the product’s heritage and overall taste.

Concerning the orientation and taste profile of the brand, water connoisseur Michael Mascha commented: “Chaudfontaine has a neutral pH and a nice bicarbonate level. The low level of nitrate indicates an undisturbed source.”

“Chaudfontaine is among the rare thermal, hot natural mineral waters in Europe. For over 60 years, Chaudfontaine water is purified by nature,” observed Chaudfontaine Production Director Jean-Louis Cornet.

“There are different kinds of water, among which the category of the hot thermal natural mineral water is a truly exceptional one. The difference in origin has an impact on the taste. So choosing the appropriate water to drink deserves more consideration than many of us think it does.” * Promotional push*

The brand’s marketing drive has been boosted by a robust screen advertising campaign since 2003, with TV spots looking at how the brand is associated with affection and friendship as well as an ad looking at the natural uniqueness of the brand.

However, the marketing for Chaudfontaine moved up a gear in 2006. Spadel’s leading brands had already captured the attention of young, fashion conscious and affluent consumers. So it’s no coincidence that the screen campaign from Coca-Cola promoting Chaudfontaine in a PET bottle competed by featuring a male teenager listening to loud rock music in a comfortable kitchen setting.

With the scene set for the ad, it’s time to describe the action. Oscar, a spritely goldfish, eyes a bottle of Chaudfontaine, next to the boy sat on the breakfast bar. Oscar bashes against his goldfish bowl in an attempt to move it closer to the bottle. The boy eventually notices the fish’s antics and pours some of the bottled water into the goldfish bowl. The ad cuts to a close-up of the brand and a new positioning statement: ‘Les connaisseurs préfèrent Chaudfontaine’. After drinking the water, Oscar shows his approval and appreciation with an endearing burp.

Besides the excellent use of humour in the 2006 TV spot, this well crafted film communicates core brand values in an engaging manner.

Product innovation

To make the brand even more distinctive to consumers in horeca channels, Chaudfontaine became a pioneer in the Coke network in 2006 by offering a newly designed glass bottle range in three variants: still (blue label); sparkling (red label); mildly sparkling (green label).

It’s a novel idea, but are the three variants of water useful to consumers? Wouter Vermeulen, Director of Communications at Coca-Cola Belgium and Luxembourg, clearly believes they are.

He explained: “When having dinner, most people ask for advice concerning the choice of wine, but never ask for advice concerning the choice of water. Water can have an important influence on the taste of your dish. Sparkling water promotes appetite, so it’s perfect as an aperitif and a great partner for dishes such as seafood. Lightly sparkling water works well with subtle dishes such as Waldorf salad and wok dishes, and is always the right choice when you’re not sure. Still water is perfect at the end of the dinner and has a neutral taste, so it perfectly suits dishes with a more explicit taste such as Chateaubriand or pheasant.”

The range of red, green and blue labelled waters are packaged in bold, contemporary and elegant 1 litre, 50cl and 25cl glass bottles, which express purity, stability and exceptional quality through the structural design of the bottle and the labelling. The innovative bottle, shaped as a rising droplet, has been kept as transparent as possible to highlight the intrinsic quality of the water. The company describes the design as “modern and timeless.”

“The Chaudfontaine water is a unique thermal hot mineral water. Our challenge was to build a brand that reflects this uniqueness. This has been achieved by stressing the core values of the brand more, using the dove in the logo as a symbol for purity, by launching a new bottle with a design that reflects the purity and transparency of the water and by focusing our communication platform towards consumers making use of the ‘connoisseurs prefer Chaudfontaine’ tagline,” added Vermeulen.

A renewed screen marketing push for Chaudfontaine in 2007 was equally compelling and important, but this time a restaurant setting was chosen in order to promote the brand’s latest range of glass bottles. As you can imagine with the help from sequential scenes from the advertisement (shown below), this advertisement – with a starring role for Omar the lobster – reinforces the positioning statement, punctuates the brand’s association with quality and communicates the brand proposition in an even more fun and compelling way. * Tangible results * The brand revitalisation efforts were undoubtedly a success. Before the activities, Chaudfontaine was growing in line with the market. Following the total rebranding process with new packaging and marketing, the brand has outperformed category growth by a clear margin.

Statistics obtained from Coca-Cola provide evidence to support such a view. While the total bottled water market grew 2.8% in Belgium between 2001 to 2003, the Chaudfontaine brand registered 3.4% growth in the same period. Category growth in Belgium between 2004 and 2006 was 1.4% but Chaudfontaine achieved 5.7% growth.

*Future outlook *

Chaudfontaine is sold in all major distribution channels including hotels, bars and restaurants as well as retail outlets, petrol stations and venues such as cinemas. For example, the availability of the 50cl PET bottle in supermarkets has improved significantly from 17% in 2003 to 64% in 2007. Chaudfontaine is also available in 1.5 litre PET bottles in still and sparkling (blue and red label) formats. A 33cl PET bottle with sports cap is also available in the still range.

Besides Belgium, the brand is currently available in the Netherlands and France through the local Coca-Cola bottling partners. There was market speculation last year that the Chaudfontaine brand could be introduced elsewhere in Western Europe including the UK, but the company declined to comment further on these reports.

Coca-Cola also declined to reveal plans for Chaudfontaine in 2008, but marketing officials expressed their determination to maintain Chaudfontaine’s steady progress in the marketplace and resolve to ensure the brand continues to drive category growth in Belgium. * Home truths * According to Zenith International, the Belgian packaged water market has developed over the years to become one of the top in Europe, with consumption at 128 litres per person. This is expected to grow in 2008 to around 130 litres per person. In Belgium, still waters make up around two thirds of the market, with sparkling waters accounting for the remainder.

Zenith International Senior Analyst Karen Wells commented: “In volume terms, Spadel, Nestlé Waters and Neptune (with its Cristaline brand) share around 55% of the Belgian market, with the remainder comprising both international and local manufacturers. Danone and Coca-Cola hold similar market shares of around 7% each.”

Despite the success of the brand revitalisation and the ambitions of Coca-Cola to continue to grow in Belgium, Chaudfontaine is still less known than other major waters in the domestic market, so it faces plenty of challenges as it attempts to steal more limelight away from the leading brands in the still and sparkling segments. According to Spadel officials, the firm’s Spa and Bru brands combined had over a 19% market share across retail and horeca channels. In comparison, Chaudfontaine held a market share of some 7%.

Although final data for 2007 has not yet been officially released, analysts do not expect any significant changes in how the market is carved up, but volumes declined because of a poor summer season.

Meanwhile, Spadel’s four key brands - Spa Reine, Spa Barisart, Spa Marie-Henriette and Bru - have evolved and benefited from recent innovations and there’s more activity on the horizon. At the same time, Wattwiller, the company’s brand in France, also recently launched at Carrefour in Belgium. This spells even more competition for Chaudfontaine beyond the threats faced from popular Nestlé brands Perrier, Vittel, Contrex and San Pellegrino as well as Danone’s Evian, Volvic and Badoit and Neptune’s range.

Only time will tell if Coca-Cola’s Chaudfontaine can continue to increase appeal following the promising momentum in product perception and customer loyalty it has built in the past few years. However, one thing is certain. As lessons in brand revitalisation in the bottled water industry go, Chaudfontaine is a master class one cannot help but admire.

**Timeline

** * 1240 – The first written evidence related to the origin of the Chaudfontaine spring is found in a charter from the bishop of Verdun describing ‘Chauve-t-eau-Fontaine’ * 1676 – A farmer starts to exploit the warm Chaudfontaine spring as a bathing resort. Indeed, the site remained a popular spa location for the next 250 years * 1924 The Carter family are first to sell water from the Chaudfontaine thermal source. The enterprise uses the name Thermale Chaudfontaine * 1926 – On the other side of the river, William Grisard starts another water bottling company called Cristal Chaudfontaine * 1938 – Cristal Chaudfontaine acquires Thermale Chaudfontaine and begins trading as Monopole Chaudfontaine * 1961 The Piedboeuf brewery becomes the main shareholder of the Chaudfontaine business * 1983 – Discovery that Chaudfontaine water travels through rock layers at 1,600 metres for about 60 years before reaching the surface * 1988 – Piedboeuf is integrated into the Interbrew group * 1997 – ranian businessman Abbas Bayat buys Monopole Chaudfontaine from Interbrew and integrates the source into Chaudfontaine distribution * 2003 – Chaudfontaine becomes part of the Coca-Cola system. The company begins to pour investment into the brand, production and distribution * 2004 – Chaudfontaine celebrates its 80 year anniversary in style with a brand new logo * 2006 – Chaudfontaine’s revitalisation continues with new product developments and marketing activities. The brand scoops an award from our magazine in the process * 2007 – A creative screen marketing campaign demonstrating creative flair is broadcast building on themes from a Chaudfontaine ad which aired a year earlier