1. “Over responding to a Crisis”

2. Perrier On Top  In late 1989 Ronald Davis the President of Perrier’s U.S. Operations was extremely happy since Perrier’s U.S. sales had risen from $40 million to more than $800 million at retail  At the same time in May of 1989 in an issue of Fortune the company was depicted as one of six companies that compete best  Fortune quotes, “These are companies you don’t want to come up against in your worst nightmare. In the business they are in, they amass crushing market share.”

3. Perrier on Top  Perrier was globally known for its quality due to low mineral content (particularly sodium)  This occurred because the water spent very little time filtering itself through minerals  While the water flows underground it met with different gasses which allows the water to capture its well known fizz  Not only was Perrier known for being the best, Perrier owned nine other brands including: Poland Spring, Great Bear, Calistoga, and Ozarka

4. Perrier on Top  Bottled water was the fastest growing segment of the U.S. beverage industry  Perrier controlled 24% of the total US. Bottled- water business  Perrier was dominating almost 50% of the imported bottle water sector  Competition like Coca-Cola, PepsiCo, and Anheuser-Busch was hardly affecting the sales of Perrier

5. Perrier Takes a Hit  On a Friday, February 1990 news reached Perrier’s executive suite that traces of benzene had been found in its bottled water  Ronald Davis, President of Perrier Group of America ordered an intensive recall of all Perrier bottles in North America  Few days later Perrier S.A. expanded the recall to the rest of the world  Good? Or Bad?

6. Perrier Caught in a Lie  At first the excuse given by Perrier officials was that the contamination occurred because an employee mistakenly used cleaning fluid containing benzene to clean the production-line machinery that fills bottles for North America  Traces of benzene were now found in bottles of water in Holland and Denmark, poor Perrier was now caught in a lie  Perrier now finally admits that benzene naturally occurs in Perrier water but the problem was now visible because the workers forgot to replace the filter ??

7. Can It Get Worst?  Competitors were obviously salivating at the opportunity that had just come about  Competitors like Evian, Saratoga, San Peligrino, PepsiCo's H2OH  Due to this drastic recall Perrier was completely out of the market for a total of 5 months  Al Ries, a consultant, quoted for the Wall Street Journal, “If I were Perrier, I would make a desperate effort to reduce that time as much as possible, even if I had to fly it in on 747s from france.”

8. Recall Necessary?  Ronald Davis, President of North America Perrier, later pointed out that the company didn’t have to recall all 70 million bottles of U.S. inventory  Health officials noted that the benzene levels found did not pose any significant health risk, the only risk was the image of Perrier  Did this recall really help Perrier???

9. Consequences  By the end of 1990 it was very obvious that Perrier was not going to regain its market position  Now new big shots had emerged like, Saratoga, La Croix, and Quibell  Evian at the time was the biggest winner of all  Perrier’s sales had only reached 60% of pre-recall levels  Perrier did have a sales gain of 3.7% in 1990 but that was because of performance from domestic brands like Calistoga and Poland Spring

10. What about Now?  The Top 10 Bottle Water Brands in the US by wholesale dollar sales and market share.  1. Aquafina (PepsiCo) $936 million 11.3 %  2. Dasani (Coca-Cola) $834 million 10 %  3. Poland Spring (Nestle Waters) $649 million 7.8%  4. Arrowhead (Nestle Waters) $546 million 6.6%  5. Deer Park (Nestle Waters) $356 million 4.3%  6. Crystal Geyser (CGWC) $335 million 4%  7. Ozarka (Nestle Waters) $236 million 2.8%  8. ZephyrHills (Nestle Waters) $215 million 2.5%  9. Ice Mountain (Nestle Waters) $208 million 1.7%  10. Evian (Coca-Cola/Danone) $145 million 1.7%

11. What about Now?  The Top 10 Bottle Water Brands in the UK by wholesale dollar sales and market share. 1.Private label 2.Volvic (Danone) 3.Evian (Danone) 4.Highland Springs 5.Vittel (Nestle Waters) 6.Buxton (Nestle Waters) 7.Danone Activ (Danone) 8.Strathmore (Constellation brand) 9.Perrier (Nestle Waters) 10.Aqua Pura (Well Well Well)

12. Perrier’s Vision What do They want to be?  Perrier vision is to be the number one sparkling mineral water in the world Why do we exist?  Perrier’s mission is to offer bottled water to meet consumer needs anywhere, anytime Mission Statement

13. Perrier’s Values  Perrier is a competitive business that also understands the importance of how business is conducted.  “Our people, who are dedicated to producing high quality products and maintaining top service levels, share our aspirations and beliefs, a creed of respect for others. The company strives to act responsibly in its business and workforce practices, to be good stewards of the environment and to be a good neighbor in the community where we live and work.”

14. Perrier’s Strategy  Perrier’s strategy is “Perfect Anytime”.  Perrier plans being perfect anytime by providing the best tasting sparkling water on the market. They are not only marketing for the rich and famous, they want to be an everyday thirst quencher.

15. Major Problems 1.Benzene found in the water 2.Managements drastic decision to recall all Perrier bottled water 3.Management tried to cover up the issue by lying 4.Staying off of the market for 5 months 5.Management believed that this five month hiatus would not hurt them (over confidence)

16. S.W.O.T. Analysis 1.S = Strength 2.W = Weakness 3.O = Opportunity 4.T = Threats 1.Part of a large corporation, Nestle water corp. 2.After benzene threat lost popularity, other brands came up 3.Everyone is more health conscious, water bottles are back in the game 4.Large competitors: Coca- Cola, PepsiCo, Danone

17. Possible Solution Change their Whole Image  In the past it has been seen when companies lose their reputation rather than trying to fix it they create a new identity  Most people don’t even notice it’s the same company rather they think it’s a new company all together  For example: Firestone is now known as Bridgestone, same company but reinventing their reputation after the bursting tire incident  I feel if Perrier comes up with a new identity they will gain more popularity faster than trying to clean their old one

18. Possible Solution Target a different Market  I think they can change the design of Perrier, same bottle same name but different target  They can make Perrier a drink of the youth  Drinking Perrier would not only be a drink but a statement  Management would have to change their mindsets and past goals and now have to change their marketing campaigns for a new age group, primarily 18-25  This group will probably not even know what happened 18 years ago  I feel Perrier will succeed under this idea because water is the drink all young people are into, with the fad of being in shape and getting ready for the summer, Perrier can grasp a lot of attention

19. The End