Fiji Water

By Elizabeth Kulin www.KulinMarketing.com

Executive Summary: There are multiple recent strategic issues that the bottled water company Fiji Water is facing. The economic recession has led to a change in consumer purchasing trends, and the bottled water category is not as stable financially as it used to be. Environmental issues, such as waste and pollution, are also affected Fiji Water and its competitors. Bottled Water companies are attempting to shift packaging and shipping to more ecologically friendly materials and modes, as consumers favor environmentally sustainable products. Additionally, as consumers focus on obtaining healthier lifestyles and diets, they have begun to question the safety and purity of the water that bottled water companies are producing. Fiji Water has been affected greatly by all of these issues, as well as negative press about the socio-economic conditions of their souring location, and in 2008 was forced to layoff 40% of their staffing resources. With limited resources, an action plan going forward must be cost efficient and extremely effective. By analyzing and critiquing four potential strategic options, a rational next step for Fiji Water can be discovered. By supporting this plan with marketing tactics and communication, it can attempt to stimulate growth for the company. Current Overview: History: Fiji Water is bottled water artesian water that was founded in 1993 in Colorado and first produced and sold to the world in 1996. It is sourced from the Artesian region of the Fiji Island, packaged, shipped and sold to distributers across the world in various sizes. In 1997 it was introduced to the US in the California and Florida markets (answers.com). Today, its headquarters are located in Los Angeles, its President is John Edward Cochran, and it is a wholly owned subsidiary of Roll International Corporation (RIC). Roll International Corporation is a private, $2b corporation with over 4.000 employees in industries such as agriculture, consumer packaged goods, floral services and more (www.roll.com/about-us.php). The acquisition by RIC occurred in 2004 and is stated to have cost $50m (Beverage Industry, 2004). Additionally, the fist year of the acquisition was an enormous success when Fiji Water sales increased 50% (Advertising Age, 2009). Considering the beverage industry is extremely crowded, this was a large

feet. Industry: The beverage industry overall had experienced a cumulative increase of 29% between 2003-2007 and was stated to be worth $39b (See table 2). Bottled water sales grew from 4,725m gallons in 2000 to 9,418m in 2008. Additionally, the category won over 24m new customers during this time (Mintel Oxygen, Americas Changing Drinking Habits US-February 2009). However, as the worth of the bottled water category increased steadily at an average of 53% between 2005-2007, 2008 saw only a 9% increase (see table 3). Segment: Within the beverage industry, the bottled water category is split into 3 major segments: major manufactures which account for 70% of beverage sales (Nestle, CocaCola, PepsiCo and Crystal Geyser Water Co.), private labels, and small manufactures (Mintel Oxygen, Bottled Water US December 2008). Fiji Water is in the small manufactures segment. Positioning: Fijis water positions as a high quality, thirst quenching, location (Fiji Island) sourced, artesian water. To support this position, it is one of the highest priced bottles of water on the shelf at retail stores. Branding: Fiji Water has created a brand image of tropical, exotic water by its packaging of palm tree images. The brand has high brand awareness in pop culture gained from large marketing and advertisement promotions (Fiji water increased its advertisement budget from $6 million to $10 million in 2008 per Brandweek, 2008). Competition: As a beverage, Fiji Water competes with all other beverages that consumers choose from during beverage purchasing. Within the category, Fiji Water competes indirectly with coca-cola and Pepsi brands, Acquafina and Dasani. However, its direct competition on a segment level are all other small bottled water manufactures, especially Evian. Strategic Issues: Context of Fiji Water: Fijis positioning strategy, as a small manufacture player is to become the brand of choice during the consumers purchasing decision. Fiji Water has focused on building strong brand equity to achieve this placement. To grow brand awareness, the company has focused heavily on the promotional channel of advertisement. In 2008 it was stated by reporters that Fiji Water has increased its advertisement budget from $6-$10m (Brandweek, 2008). Messaging includes the slogan natural artesian water and images of tropical settings to build a differentiated brand image in a category where differentiation is difficult, but Fiji Water strives to create a brand of water that is drinkable and also on experience for the consumer. In addition to advertising, Fiji Water uses the promotional channel of product placement and has been incorporated into major Hollywood movies, TV shows, golf tournaments, sailing regattas, and musical events. Also, the company exercises a controlled distribution strategy to ensure its availability at best hotels, resorts, spas and restaurants. These market strategies have paid off. In 2008 Fiji became the biggest imported bottled water brand in the convenience/PET segment with estimated sales of $90m. This was a 12% increase from 2007, and positioned Fiji Water ahead of the category leader, and $71m worth, Evian. Evian experienced a decline of 19% in sales in 2008, leaving Fiji Water as the market leader in the segment of small bottled water manufacturers (Mintel Oxygen, Bottled

water-us-December 2008). Furthermore, a sensitivity regarding environmental preservation has become an increasingly large contextual factor. Since bottled water products depend mostly on petroleum plastic (non-biodegradable) for packaging, this has affected both competition and consumer trend changes for the category, and Fiji Water. Competition: Fijis competition includes all other beverages, all other small manufacture bottled Water Companys (like Evian), and additional growing segments such as private label bottled water, tap water, reusable water bottles, and water filtration systems. Private Labels: Research shows that there has recently been a consumer trend shift towards private label beverages. In 2008, private labels gained 1% of the beverage industry market share, suggesting that consumers are moving towards non-branded beverages (Mintel Oxygen, Americas Drinking Habits-us-February 2009). Tap Water: There seems to also be an increase in consumer usage/consumption of tap water. During a study by Mintel Oxygen in 2008, the number 2 reasons why consumers did not purchase bottled water was because of cost and available access to tap water (mintel oxygen, bottled water-us-December 2008). This cheaper and available alternative to bottled water, for consumers, should cause Fiji Water to worry however, and in 2008 its Sr. VP Thomas Mooney responded by saying that bottled water replaces sodaIf your tap water tastes great and you like it, drink it. Bottled water is the better choice if youre reaching into a cooler (Judkis, 2008). Reusable Water Bottles: New product developments around the consumption of tap water have entered the market and threaten the bottled water category. Reusable water bottles, such as Sigg and Klean Kanteen, allow consumers the same convenience that bottled water does and consumers are noticing. Sigg sales grew 200% in the first 3 months of business in 2008 (Mintel Oxygen, Bottled water). Filters: Tap water can also be as clean as bottled water with the use of filters, such as industry leader Brita. The sales of water filtration systems increased 36% between 2002-2007 (Mintel Oxygen, bottled water-us-December 2008). These new competitors have entered the market at a time when they can threaten Fiji Water sales because it is also a time of incredible consumer trend changes for the beverage industry, bottled water and Fiji Water. Customer: Out of the 180m bottles of Fiji Water that were sold in 2008, most of the sales occurred in the United States (Lazarus, 2007), by young adults who respond favorably to packing attributes, convenience, and the aesthetic look of the bottles packaging. Additionally, studies show that women are the primary consumers in the category as ! women report that they drink bottled water (Mintel Oxygen, Bottled Water-us-dec 2008). Furthermore, Fiji Water is priced higher than other bottled waters and therefore, their target audience must be mid-high level income and not price sensitive consumers. Recently, there have been multiple trend changes among the bottle water consumer audience that have affected sales of the entire category. Actually, the category as a whole has been in decline since 2008. Major consumer trend changes that have occurred are related to macro and micor-environmenal issues such as economy, environment, socio-economics and health. Economy: Since the beginning of the current recession in 2008, sales of bottled water has been in decline, when, per capita, consumption dropped from 29 gallons to 28.5 (Latimes 2009). Change in volume sales for non-alcoholic beverages, 2006-07 was 5.1 and 2007-08 was -1.0 (Minel Oxygen, America's Changing Drinking Habits - US - February 2009). Anti-bottled water organizations state that bottled water is 1,000

times more expensive than tap water and consumers seem to be noticed (mintel oxygen, bottled water-us-December 2008). This has negatively affected Fiji Water financially and in December of 2008, the company laid off 40% of its employees (Palmeri & Byrnes, 2009). Additionally, water companies have been forced decreased prices to try and stimulate demand and grow future sales (see table 1). Environment: In April 2008 Fiji Water created www.FijiGreen.com. This development enabled Fiji Water to utilize a space where it could educate and communicate with consumers about its environmental activities. At the time, Fiji Water was the only bottled water company to publically state its carbon emission footprint and announced its mission to become carbon neutral. The site has now added additional environmental topics such as the Fiji Water mission to help save the Fijian rainforest, reduce packaging materials, and promote recycling. However, the public responded with mixed reactions to their transparency and the company as been under scrutiny by environmentalist for not being as green as they claim. It has been a PR disaster for the company. Even winning such awards as the Elle Magazine 2008 Green Award and Oracles 2008 Empower the Green Enterprises Award did not convince consumers that the bottled water company is the most environmentally conscious choice of drinkable water. An article by socially conscious publication Mother Jones written in September 2009 pointed out that Fiji Water can try to be green, but it is still long-distance water (Lenzer, 2009). Consumers seem to agree. In the consumer comment section of the Fiji Water Green Blog posting that responded to the Mother Jones article, 57% of consumers were against Fiji Water claiming that their product is detrimental to the environment, as well as the local Fijian people (Please note, blogs are not substantial academic sources, but are considered customer feedback for many marketers). Socio-economics: Reports claim that the source location of Fiji Water is poor, underdeveloped, and lacking of enough clean drinking water for the entire population. It has been stated that 1/3 of the Fijians are without access to clean water and suffering from typhoid and other diseases related to contaminated water (Bolwig, 2008). This situation has increased public awareness and concerns that Fiji Water as a company that is exploiting a nation's limited resources. Multiple consumers have commented in the Fiji Green blog that Fiji Water is stealing the local communities water and money (Fiji Green Blog). However, Fiji water and the local Fijians have vocally disagreed. On the Fiji Water Movement website (a Fiji Water division dedicated to helping to develop and stabilization of Fiji), Fiji Water explains that they employ ~350 local Fijians in rural areas, pay good wages, provide healthcare and other additional benefits, as well as partnered to help build schools, healthcare systems, and brining clean water to over 100 communities. However, consumers must trust Fiji Waters claims in order to overcome the socially conscious concerns. Health: Obesity, and related diseases attributed by obesity (such as diabetes) have caused a phenomenal increase in health conscious consumers, claims the National Health and Nutrition Examination Survey (Mintel Oxygen, Consumer Choices in Beverage Isle-us-April 2008). Non-alcoholic beverages account for 22% of the total calorie intake per day for average Americans, age 4 and up (per MilkPEPs 2006 study, What America Drinks). Additionally, consumers are increasingly interested in foods and beverages that are absent of artificial additives and preservatives. As consumers look for beverages that can help support their health objectives they have been choosing healthier beverage segments such as Juice and Milk, and predominantly bottled water (see figure 4). However, at the same time, there have been growing concerns about the health safety of bottle water. Consumers are cautious about what brand to trust. A study performed by the Environmental

Working Group tested 10 popular US bottled water brands and found evidence of bacteria, Tylenol, and chemicals in the water. Additionally, isphenol A (BPA), a chemical found in plastic, has been linked to coronary heart disease, heart attacks, and Type 2 Diabetes by the Journal of the American Medical Association. In relationship, in 2008 14% of bottled water users decreased their purchases of bottled water because of BPA concerns (Mintel Oxygen, Bottled Water US Dev 2008). Biggest Issues: Economy o Consumer inability to afford bottled water. o Consumer switch to tap water & development of products that enable tap water to be just as clean and convenient as bottled water. Consumer trends of concern o Environmental harm of shipping Fiji Water to selling points and using nonbiodegradable bottles as packaging. o Socio-economics of local Fijian people affects consumer concern of purchasing Fiji Water. o Health interest of clean water and packaging. Reflection for Management: React to consumer trends by changing, adding or canceling current business elements. Economic Consider lowering prices. Environment Consider decentralizing the water source to locations closer to selling points. Socio-economics continue to use Fiji Water Foundation to provide support to the local Fijians and using marketing tactics to inform the public OR leave Fiji and source from another location. Health Hire a third party to test the quality of Fiji Water and publish the findings. Also, consider switching packaging material from plastic to one that is safer and less detrimental to the environment (such as Corn). Growth Consider developing new beverage products, within financial and resource capabilities, for current and/or new markets (like major bottled water companies, such as Coca-Cola and PepsiCo, have). SWOT: STRENGTHS: WEAKNESSES: Financially successful parent company ! Unstable brand image as consumers (RIC, worth 2b) could be used to create publically write negative comments on new products for current or new the internet about the company. markets. ! Located in Fiji where there is a great Socially positive PR. Example: Give deal of civil unrest Clean Water partnership with US ! Sourced in a remote location causes for NGO to provide water filters to over shipping logistics concerns 400 Fijian families in summer of 2009 ! The brand image position as location (Niumataiwalu, 2009). based quality water may harbor new High brand awareness. positioning (if needed). Distribution chain is diverse and strong. ! Staff resources have been declined by Strong marketing staff team. 40%. ! Fiji water is in the bottled water category of the beverage industry,

OPPORTUNITIES: ! The Fiji water foundation could be leveraged to position as a green bottled water company before competition. ! Alternative materials used to package water have become available and consumers are positively responsive to it. ! Competition sales have declined, and may be in positions of weakness. ! The company resources and brand could be used to create a new or enhanced product for the same, or a new, market. ! Bottled water has been in higher consumer demand over other beverages in the industry (see table 4). ! Bottled water is forecasted to grow in the future, post 2009 (see table 9).

which has been experiencing sales declines, and consumer disapproval. ! Fiji water is priced higher than other bottled water. TREATS: The recession end is not in forecasted sight and tap water will always be cheaper than Fiji bottled water. The product source is remote from its selling points and consumers are beginning to purchase local products more. The product is packaged in a material that consumers are beginning to avoid purchasing. Consumers can say anything they want about the brand, online, and it could negatively affect the brand image. Larger beverage companies that are competition that have larger product lines and brands in multiple beverage categories could threaten Fiji Waters ability to expand into new products and markets and sustainable market share. ! Tap water is being promoted as just as clean and safe to drink as bottled water, and it is free to consumers.

Strategic Options: Environmental issues and consumer trend changes have negatively affected the security of Fiji water as a company. With almost half of their employment resources eliminated, Fiji Water must layout a plan of action to grow and restore its resources (financials). This action plan must start with research practical growth options. It is important to note that Fiji water is only 1% of the total US bottled water categorys worth of $15 billion (making the value of Fiji Water $150 million) (Deutsch, 2007). There are many other players, and they are all experience negative financial effects in 2009. Beverage Industry publication reported that, for the year ending May 17, 2009, only private label bottled water and Galceau Smartwater posted gains (Anonymous, 2009). Lead bottled water companies such as, Nestle, Coca-Cola and PepsiCo reported flat or declined sales (Nestle and Coca-Cola reported flat sales of their still beverages, and PepsiCo -5%) (Pameri & Byrnes, 2009). Therefore, the same time that Fiji Water is experiencing problems; the entire category is facing the same contextual and competitive threats. As the economic environment affects consumer trends, less expensive bottled water options become more popular. Private labels have become a large threat to all corporate bottled water brands. Private labels are almost 30% less in price, and consumers are noticing. Between 2006-2008, top brands Aquafina, Dasani and Poland Springs reported a combined volume growth of 2%. This was 42% less than the private label segment, which reported a 44% volume in growth (Mintel, Bottled Water, 2008). This transfer in success occurred in 2008 when private labels experienced a 3.4%

increase in sales, and leading bottled water brands experienced a combined loss of -4.7% (see table 5). Additionally, as consumers turn to cheaper bottled water options, the consumption of tap water, which is also 500 times cheaper than bottled water, is on the raise. Not only have there been a proliferation of new product development to make tap water as clean and convenient to drink as manufactured bottled water, there is concern that bottled water sales may be threatened by the governments planned initiatives to increase the publics consumption of tap water (Wireless News, 2009). The shifts in consumer demands and sales among bottled water segments, has forced the players of the category to evaluate possible solutions. Some brands have changed the manufacturing and positioning of their bottled water. For example, not only have all leading bottled water brands lowered sales prices (see table 1), many have responded to the consumers demand. For example, in response to the decrease in category sales, Coca-Cola and Nestle are focusing on offering consumers more options, such as their Vitaminwater and Purelife brands, (enhanced flavored sweetened water) that can be drank as a juice alternative (Palmeri and Byrnes, Feb 2009). Additionally, Coca-Cola is investing in, not only a new bottled water segment (enhanced Vitaminwater, which it bought for 4.1 billion in 2007 from Galceau) but also a beverage that is forecasted to potentially sell well in the near future, Coconut Water. With expected wholesale sales of $35 million this year, up from $20 million a year ago, according to Beverage Marketing Corp., Coca-Cola bought a minority stake in coconut water company ZICO Beverages LLC in 2009 (less than 20% for $15 million) (Zmuda, 2009). Furthermore, in response to consumer demands to make drinking water more environmentally safe, by decreasing the amount of non-biodegradable plastic used in packing, PepsiCo is now positioning their Aquafina brand as the thinnest plastic bottled ever (Bauerlein, 2009), and Evian is transporting its bottled water by train instead of truck to lesson CO2 emissions. It is obvious that the top bottled water brands are responding to the numerous issues that the category industry is facing. Fiji water will need to evaluate what strategic move(s) is right for them, in reaction to consumer trend changes, demands, the macroeconomic shift, and the new positioning of the other bottled water brands. As Igor Ansoff in, Strategic Diversification claims, there are 4 options that any company has when it is contemplating growth strategies. Companies can either try to: 1. Develop new products for new market 2. Present current products to current market 3. Present current products to new market 4. Develop new products for current market Fiji water will need to evaluate and explore each of these options, draft realistic plans from them, and then come up with the best option for their brand, resources, and future. Options: 1. Develop a new product for a new market a. Juice b. Hotel resort 2. Present current product, with enhanced characteristics, to current market a. Lower price to respond to economic shifts and consumer spending changes. b. Research new packaging materials to respond to consumer environmental demand. c. Publish 3rd party water test to respond to consumer health concerns.

d. Build socio-economic and cause-marketing efforts to respond to consumer socio-economic concerns. 3. Present current product to new market a. Increase price to position to new target market consumer segment b. Leverage brand associations with celebrities to strengthen brand equity among new market. 4. Develop a new product for current market a. Produce and sell enhanced water. All of these options would require leveraging the Fiji Water brand and resources in order to implement, execute and succeed in growth. In the article Finding your Next Core Business, Chris Zook says that businesses should look for hidden assets that are untapped and could offer growth opportunities (Zook, 2007). Each of these 4 strategic growth options would require Fiji Water to leverage it current assets, either its brand and/or resources, and create a solution out of them. Doing so will hopefully overturn the negative financial and brand equity losses it has experienced. 1. Develop a new product for a new market: Juice: As a beverage bottling company, Fiji Water could research other types of beverages that it could manufacture. PROS: Manufacturing juice would require targeting a new market, as it is in a different beverage category than bottled water, however it is a rational brand extension since juice and bottled water are in the same industry (beverages). Also, Fiji Water could leverage its existing resources, making the production switch and requirements easy. CONS: In 2008, fruit juice sales declined -.3% in the U.S. (see table 6) and its overall category value declined -8%. Additionally, Mintel reports that juice manufactures face competition threats from other, healthier, beverage segments such as bottled water and energy drinks. Furthermore, the forecast for juice is negative; market value is expected to drop from $15.4 billion in 2008 to $14.4 billion in 2013 (mintel fruit juice, 2009). Hotel: Fiji Waters original founder, David Gilmour, developed Southern pacific Hotel Company and grew over 50 hotels in Fiji. Inter-Continental Hotel Group eventually bought the chain, however this background could present hidden resources and brand assets for the Fiji Water brand, and options to develop a new chain of hotels under the Fiji Water brand. PROS: Not only does the brand have experience in the industry from its former owner, the brand entered the industry in the past and was successful, it also has the luxury of a current CEO that is financially wealthy. Fiji Water could leverage these advantages and build differentiation. It could also leverage its branded position of country of origin by creating hotels that focus on the Fiji culture, friendly people, beautiful eco-system and privacy. Additionally, the consumer demand of travel and tourism for Fiji is forecast to grow from 1,173.1m in 2009 to $2,025.9m in 2019 (See table 8). CONS: The travel and tourism industry in Fiji is declining. The industry experienced a loss in Q1 of 2009, of 13.2% (or $25.4m). It was 23.3% less than Q1 2008 in number of tourist arrivals. Additionally, the average days that the country had visitors decreased 18.7% (statsfill.gov). This recent decline, which may be due to the current global recession and not a fundamental problem that traveler have with Fiji, has been met with forecasts that claim positive future demand in travel and tourism to Fiji from consumers. However, unforeseen potential recurring macro-economic shifts in the future could negatively affect this industry again, creating risk for businesses entering this industry. Furthermore, this brand extension is not related to Fiji Waters core current product, water. This could cause confusion and distrust in the hotel quality among

consumers, and its hopeful the new market of travelers of and tourisms. To limit this risk, Fiji Water would have to conduct market research among this new market, prior to project development. 2. Present current product to current market: A strategic option that Fiji Water could consider is to focus on improving its current product for its current market; in order to please consumer demands and respond to context issues. The current issues that Fiji Water would need to respond to with changes are: the economic recession, consumer environmental concerns, consumer health concerns, and consumer socio-economic concerns. Economic recession response: Fiji water could lower the sales price of its bottled water. PROS: A decrease in price should encourage a spike in consumer demand. CONS: Lower price could threaten the brand image and positioning of Fiji Water, which has historically priced higher than other bottled water brands, to portray an image of higher quality water. Furthermore, this could be a short-term solution that in the long run hurts the companys revenue and overall net income. Additionally, this may not been seen as a solution by consumers, but a desperate response to the competition who are decreasing the sales prices of their bottled water brands, after all, prices fell 2.9% in 2009 across the board, according to the Wall Street Journal (First Research, 2009). Environmental Concerns response: Although many bottled water companies are responding this consumer demand shift by manufacturing the packaging of their water with thinner plastic bottles, not many have actually solved the consumer want 100% by changing the packaging to a biodegradable material. Fiji Water should research the possibility of switching packaging material from petroleum-based plastic to corn or plant plastic. PROS: By offering a completely environmentally safe plastic for its bottled water, Fiji Water would be following analysts Benson P. Shapiros advice in the article What the hell is market oriented by truly fulfilling consumer wants and needs that are not being met (Shapiro, 1988). Fiji Water would not have first mover advantage, as there is a small bottled water company called Primo Water selling its product in plant plastic bottles, but it could leverage its stronger brand equity to dominate this positioning with marketing promotions that communicate a position as the most environmentally friendly bottled of water that consumers can buy. This improvement could increase sales for Fiji Water. Krispy Kreme Doughnuts in Phoenix, AZ carries Primo water and states that consumers appreciate their sustainability efforts, and that their bottled water sales are up 50% from last year (Ecology, Environment & Conservation, 2009). . These bottles degrade in less than 60 days, and emit 75% less greenhouse gases and use 49% less energy during production (Ecology, Environment & Conservation, 2009). This switch could also respond to the consumer health concerns about BPA leakage from petroleum plastic into the water. CONS: Switching vendors and buying a new material can be detrimental on a companies resources and operating cost expenses. The market for corn and plant plastic is fairly new and therefore, Fiji Water would not benefit from economies of scale pricing, as they do with the vastly more popular sold material of petroleum plastic. Furthermore, Mintel states in its Packaging Trends in Food and Drink 2009 report that, companies are just starting to dip their toes in the water in this area, testing bio-based materials to see if they can provide the required shelf life and barrier protection. In addition, more work needs to be done to make bioplastics cost-effective and scalable. (Mintel, 2009). Health concerns response: Switching to safer plastic materials can be a response to consumer worries about BPA in Fiji Water, but consumers are also expressing worry about the safety of the water itself. To prove that Fiji Water is clean, and healthy for

consumers to drink, Fiji Water should conceder having their spring artesian water tested by a 3rd party, and publish the (positive) results. PROS: This could prove to consumers that Fiji Water is a clean, safe, and healthy beverage. CONS: Consumer may not believe the test results, which could bring even more negative criticism to the brands image. Socio economic concern response: Although Fiji Water has historically supported social growth for the country of Fiji, created a separate organization focused on growth initiatives, and blogged and built a website to publish these initiatives, consumers still attack the company stealers and exploiters of Fijis natural resources. Therefore, Fiji Water must conceder investing in additional cause marketing that can be leveraged to overcome and stop negative publicity of its brand. PROS: By affiliating with more charities, events and initiatives (such as ones that incorporate customer involvement in charity raising, giving, donating, etc.) that counteract the negative accusations on Fiji Water, a new and more positive brand image could potentially be created. This positive image could boost sales, as consumer could feel good about drinking Fiji Water. CONS: Cause marketing can often be seen as a dishonest way for brands to attempt to increase sales among consumer segments, instead of transparent interest in supporting a needy cause. This could potentially damage the Fiji Water brand even further. By listening to consumers new wants and needs, and changing specific elements of the Fiji Water brand, product, and position Fiji Water could be seen as a solution for consumers who want something different from their bottled water. This option would be following analysis opinion McGrath and MacMillan who state that, be successful by being a solution. At the same time, this option requires continued focus on selling bottled water, which could be risky in the long term if consumer trends and demands turn away from still, plain, bottled water products in the future. 3. Present current product to new market: Within the bottled water category there are market segments that companies target by positioning their brand in a way that will attract consumers of particular segments. Currently, Fiji Water is positioned as a quality bottled water of the low/mid-income level consumer. It prices accordingly (higher than competitor bottled waters on the shelf) and has invested in multiple strategic product placements in movies, TV shows and at celebrity events to support its position with brand image building. However, there are bottled water brands that target the niche, high-end income, and consumer segment. These bottled water brands price exceptionally higher than Fiji Water to sink with their positioning as the most trendy and exclusive bottled water consumers can drink. A few examples are: Voss, Berg, and Bling brands. Fiji Water could consider increasing the price of its bottled water product to compete with these brands and target this niche segment. PROS: An increase in sales price of the current product would result in greater revenue, at no/or little cost increases; resulting in greater profits, if sales volume remain the same or increase. Additionally, Fiji Water could leverage their existing brand equity, and relationships with top celebrities, to create a strong competitive position, and advantage, in this category segment of bottled water. CONS: The economic recession has negatively effected the majority of consumers willingness to spend more money on bottled water based on their brand alone. Furthermore, as previously mentioned in this report, that there were no bottled water companies (except for Smartwater) that reported sales gains for 2009, and therefore, even this top-tier niche segment of high priced bottled water is unsuccessful in this economic

climate. Additionally, by repositioning through branding methods, but without improving the quality of the product itself, consumers may not accept/believe the new position. Therefore, this new positioning, and higher sales price, could negatively effect sales volume of Fiji Water as it would alienate a large volume of their current consumers, by targeting a much smaller market and involve entering a declined product segment. 4. Develop a new product for current market: The bottled water category of the beverage industry is made up of different types of water. The main types that are used for bottling and over the counter sales, are: Spring water, purified water, mineral water, sparkling water, artesian water, and well water. Recently, the market has experienced a growing trend of alternating these types of water into fortified enhanced, flavored and sweetened varieties. Just like plain bottled water, enhanced brands are developed and positioned in ways to fulfill beverage consumers wants and needs. Soda Subs. Aquafina sparkling Poland springs sparkling Examples of brands and positions within the enhanced bottled water segment: Flavored/Juice Health Sport/energy Country Private Subs. of Origin Label Aquafina Enhanced Gatorade Fiji Trader flavor splash Propel PowerAde Evian Joes Enhanced (Pepsi) Enhanced Propel Poland Whole Propel Enhanced (recharge when Spring Foods flavored VitaminWat on the go) s Enhanced er (Coca Aquafina Alive VitaminWater Cola) Smartwater (tom (Coca-Cola) Sobe Brady) Nestle Lifewater Purelife Enhanced bottled water has experienced positive growth of 367% over the past 5 years (beverage industry, 2009). Additionally, as mentioned earlier in this report, the only bottled water to report positive sales in 2009 was Smartwater, which is a fortified enhanced non-flavored or sweetened bottled water. PROS: The success of Glaceau Smartwater, which is owned by Coca-Cola and reported 464% growth in sales of more than $500 million in 2008, shows that there is a consumer interest in such products and perhaps an opportunity for Fiji Water to develop a counter product for the consumer market (Mintel, bottled water 2008). Additionally, this would be a rational brand extension for Fiji Water in which resources and brand equity could be leveraged to increase potential of success. Furthermore, this segment is forecasted to increase in the future. It currently accounts for 6.15% of the bottled water category sales, and by 2013 it will account for 7.13% (see table 7) (Mintel, bottled water). CONS: The Glaceau/Coca-Cola brand is a very large competitive threat to any brand that attempts to enter the enhanced bottled water segment. The two brands together (VitaminWater and SmartWater) control almost 2/3rds of the enhanced water segment sales. In an attempt to enter this segment, and not compete head on with Glaceau, brands will have to position differently. For example, Smartwater positions as a non-flavored and non-sweetened water for athletes (such as, company spokesperson and Football star, Tom Brady) to drink during and after a work out to regain energy from the electrolytes in its water. It is interesting to note that it is currently the only non-flavored, non-sweetened Trendy/High Priced Voss Bling Berg

still water that is enhanced. Each other enhanced water brand, positioned towards being the best drink for athletes, is flavored, for example, Propel. Another risk of manufacturing and selling an enhanced water is legal threats. Coca-Colas popular Vitaminwater came under scrutiny and a lawsuit in January of 2009 by the Center for Science in the Public Interest for potentially falsely marketing the brand as a health alternative to soda, when it has a high volume of sugar content. Vitaminwater has seen a sharp decline in sales between 2008-2009. It is reported that Pepsis Propel flavored, sweetened and enhanced bottled water has also experienced a decline in sales in 2009 and Mintel research database stated in their Functional Beverages 2009 report that Sales of enhanced water turned sharply down in 2009 after several years of spectacular growth as both economic pressures and concerns over healthfulness came crashing down on the segment. Recommendation: Researcher and analyst Heinz Weilhrich created the TOWS matrix that states that businesses should try to exploit strengths to capitalize on ops, utilize strengths to counter threats, overcome weaknesses to pursue opportunities, and shield weakness from potential threats. Each of the 4 strategic options for Fiji Water has pros and cons, potential success, and potential failure. However, a couple of options, specifically #2 and #4, offer greater potential for success, greater potential of avoiding risk, while utilizing strengths and pursuing opportunities. 1. Develop a new product for a new market: Juice or a hotel resort does not leverage Fiji Waters current resources and brand equity as much as developing an enhanced bottled water product. Additionally, as the forecasts show, enhanced water has a much more stable and potentially profitable future than juice and tourism. 2. Present current product to current market: Lowering price, changing packaging materials, publishing 3rd party water test and investing in greater cause marketing efforts are, but may not 100% completely, be long term solutions for consumers wants and needs from the bottled water category. Enhanced water response to not only what consumers are saying they want, but following where they are actually spending their money. 3. Present current product to new market: Increasing price and targeting a niche consumer segment of high-income consumers is extremely risky for Fiji Water during the current economic recession. Offering better quality of water (inside and/or out), will better justify Fiji Water not decreasing prices, and perhaps even a slight increase, during a time when consumer demand needs to be sparked. 4. Develop a new product for current market: Developing an enhanced Fiji Water, would allow Fiji Water to remain in the bottled water category, which is forecasted to grow to a worth of ~$76.4 billion across Europe, Japan and the US by 2012 (Wireless News 2009). With less risk of long term sales decline that options 1, 2, and 3 offer. It also leverages current resources and brand equity, and provides solutions to consumers wants and needs. Also, Fiji Water could position as a bottled water that is adding functional benefits for consumers (vitamin health). Fiji Water will have to differentiate is positioning in order to not compete head-on with market leaders, such as Glaceau. Fiji Water should look for blue oceans, or untapped development and positioning opportunities that can bring potential sales. By Looking at this chart again: Soda Subs. Examples of brands and positions within the enhanced bottled water segment: Flavored/Juice Health Sport/energy Country Private Subs. of Origin Label Trendy/High Priced

Aquafina sparkling Poland springs sparkling

Aquafina flavor splash Enhanced Propel flavored Enhanced VitaminWater (Coca-Cola)

Enhanced Propel (Pepsi) Enhanced VitaminWat er (CocaCola) Sobe Lifewater

Gatorade PowerAde Enhanced Propel (recharge when on the go) Aquafina Alive Smartwater (tom Brady)

Fiji Evian Poland Spring s

Trader Joes Whole Foods

Voss Bling Berg

There seems to be an available position in the health sub-segment for Fiji Water to introduce a non-flavored, non-sweetened, nutrient fortified bottled water (all current enhanced water in the health position are flavored and sweetened). This development would leverage off of Smartwaters success in the sub-segment of non-flavored, nonsweetened, fortified enhanced bottled water, while avoiding direct head-on target market competition. Additionally, Fiji Water would be avoiding multiple cons by positioning this way: Soda Subs. Con: Fiji is a still artesian water product. Flavored/Juice Subs. Con: This category is not experiencing positive sales Health Pro: Can remain artesian water Consumer trends favor this positioning Sport/energy Con: Would have to compete with Fiji water Country of Origin Con: Saturated mature positioni ng. Private Label Con: Would lose brand identity Trendy/High Priced Con: Consumers are unlikely to accept a price increase at this time.

As this chart shows, if Fiji entered this growth market of enhanced water, under a differentiated positioning, that is in line with consumer trends, and is inclusive of brands that have failed to lead in this brand positioning, Fiji water could have an opportunity to win market share leadership of the healthy enhanced bottled water segment by leveraging its existing resources, and brand. As consumers look for healthier options in their intake consumptions, from their food and beverages, Fiji water can position as the healthiest bottled water option for them. This would involve developing a new product that contained vitamins, no sugars, and no flavors. Additionally, Fiji water could also consider taking solutions from strategic option #2 in order to further meet consumer demands and strengthen is position as healthiest. For instance, Fiji Water should attempt to switch to non-plastic packaging material, and publish results from a 3rd party water test. As more and more consumers become concerned with BPA leakage of plastic water bottles, a switch to a safer material, such as corn or plants, could strengthen their positioning, increase credibility, and allow for faster consumer adoption of their new product. These measures have little risk and could decrease chances of negative consumer reactions to the brands changes. In the end, this strategic option offers the best chance of success, by leveraging strengths to take hold of opportunities, and by mitigating weaknesses to avoid threats. Marketing Strategy: Marketing Objective - To grow increase brand equity of the new product that can

strengthen positioning of the healthiest bottled water and create large sales volumes. Positioning The healthiest bottle of water. Affordable, high quality, all natural, 0 calories, vitamin enhanced bottle of water. 4 Ps: Product Clean water, enhanced with vitamins that help keep people healthy, and a new packaging of plastic to ensure no harmful chemicals are leaking into the water. Place A mixed distribution channel of wholesalers, retails (with a focus on securing shelf space in natural and organic markets such as whole foods, wild oats, etc.), and straight to consumer. Promotion Messaging Descriptive, memorable and likable phrases that can effectively grow brand equity, specifically brand image. Most importantly, Fiji Water marketing communication should derive from the strategic position as the healthiest bottle of water, while also establishing a differential position in the consumer minds from all other enhanced waters in the health segment. Messaging should help build a brand image that is based on the Fiji Water Complete value proposition. Value proposition A simply, pure, and clean source of daily vitamins. This value proposition differs from SmartWater, which is enhanced with only electrolytes. Electrolytes hydrate humans, however water is already hydrating. Therefore, the typical consumers of Smartwater are individuals who need extra hydrating, such as athletes. This is a different value proposition offering that Fiji Water Complete will supply to consumers. Fiji Water Completes value proposition a dose of a persons recommended daily vitamins, without extra additives that are unhealthy. This is different than SmartWaters value proposition, as well as the bottled water brands in the health segment (VitaminWater, Propel, and Lifewater). Direct competition for Fiji Water Complete are the heath segment brands. The brand will have promote its value proposition difference from these brands, by educating consumers through marketing communication messaging. The competitors do the following messaging: VitaminWater Drink better water and hydrate responsibly Propel Flavor to hydrate, vitamins to nourish Lifewater a thrillicious taste experience that's good for your body

The value proposition difference between these brand and Fiji Water Complete enhanced water, is the reality behind their messaging; the products ingredients: VitaminWater This water has calories, carbohydrates, sugar, and not a complete list of vitamins per bottle. Propel This brand has calories, sodium, carbohydrates, sugar, and a limited amount of vitamins in each bottle. Lifewater There are calories, sodium, carbohydrates, sugars, and limited vitamins in each bottle of this water. Therefore, Fiji Water should tailor its marketing communication messages around the realities of these brands. By doing so, the Fiji Water Complete brand equity, as the healthiest bottled water, can be built. The messages themselves should be implemented in the marketing tactics and brand element.

Tactics - Cost efficient, while also effective in growing brand equity, especially brand awareness. ! PR Outreach to health and green reporters of newspapers and magazines who share a similar audience as the consumer target market that Fiji Water Complete it attempting to reach. ! Outdoor Advertising Post print ads on bus stops, near retail stores that sell Fiji Water Complete, by health food stores, by health clinics and organizations (yoga studios, etc) and neighborhood parks. ! Print Advertising buy ad space and promote new positioning in health, green, and food & beverage related magazines and newspaper sections that share a similar target market. ! Social Media This is a free tactic where Fiji Water Compete can engage with consumers, and encourage a viral spread of the new brand. This can be attempted by creating a presence on social networks, YouTube (post internet commercials that promote the positioning), and participating in blog outreach (attempt to get bloggers with large audiences to talk about the Fiji Water Complete brands differentiation). Branding Use brand elements to implement the marketing communications messages. The new brand elements should help build brand equity, establish positioning and create differentiation among competitors and consumers. ! Brand Name Fiji Water Complete; By keeping the original title, Fiji Water, the brand value and equity that is associated with that name can be transferred to the new brand. Additionally, by adding the word Complete to the end of it, consumers will know that this is a different product; a different kind of water. Furthermore, the word complete means total, not lacking, organic and whole, which can support the positioning of healthiest water you can drink. ! Slogan Completely healthy; This slogan relates to the differentiation from competitors in the health segment who are not as healthy as Fiji Water Complete. It describes to the consumer audience that this water is 100% healthy for them, and therefore does not include calories, sugars, carbohydrate or sodium. ! Logo A heart shaped globe; This speaks to the products ability to keep people healthy (their hearts), and how it is a healthy product for the world (the bio-degradable packaging and social sustainability projects in Fiji). ! Tagline Vitamins, with the other stuff., Healthy water, completely simple., and A full does of vitamins, in 100% water Take your vitamins with water, not something else., Vitamin water, without the additives.

As explained in the book, Strategic Brand Management; Building, Measuring and Managing Brand Equity by Kevin Lan Keller, the criteria for choosing brand elements is strategic. I have chosen each brand element so that they build brand equity, but also so that at least one brand element is meaningful (descriptive), memorable (easy to recall), and likable (fun and interesting). Each brand element eludes the following criteria: Brand Name Slogan Logo/Character Meaningful X Memorable X X Likable X X

Tagline

Price - The pricing of the this new brand will be $3.13-3.15 per 1 liter bottle. In relationship to competitors (direct and indirect), this pricing is 13.4% higher than SmartWater, but only 1.62% higher than direct health segment competitors VitaminWater and Propel, and 20.4% lower than Sobes Lifewater. Since the positioning of the Fiji Water brand has always been and will continue to be affordable high quality bottled water, this pricing level (in additional to promoting the quality of the product in comparison to the other brands) will supported the new brands place among competitors, without risking neglect from economically affected price sensitive consumers.

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Financial Projects: Currently: (Source: Shah, 2008 & FijiWater.com) Size Cost/bottle Revenue/bottle Profit/bottle 330ml $0.07 $1.32 $1.25 500ml $0.11 $1.56 $1.45 1 liter $0.22 $3.13 $2.91 1.5 liters $0.33 $4.17 $3.83 Compared to Smartwater: Smartwater sales Volume price 1 liter, 12 bottles $16.00 1.5 liter, 12 bottles $24.25 Gross Margin 94% 93% 93% 92%

Fiji Water sales price Difference $37.50 134% $50.00 106%

Fiji Water Costs: Variable Vitamins Nutricap Labs is a producer of raw vitamin powders and liquids. Their pricing is: $.20/16ounces (or 32 tablespoons) of powder multi vitamins. 1 liter bottle of water should have 1 tablespoon of the powder sustains. Therefore, 1 liter bottle worth of vitamins would cost $.00625.

Plastic Naturalworks LLC is the largest manufacturer and seller of biodegradable plastics. Dr. Richard Bopp, Material Scientist at Naturalworks states that their pricing of PLA (corn derived plastic) is: .80/lb PLA (or 453.60 grams). This is $.12 more than PET (petroleum based plastic, which is about .$68/lb. However, it is important to note that Dr. Bopp claims that the price of PET is unstable and changes regularly. Therfore,1 gram would cost .00176 (453.60/$.80) , and since water bottles weight 25.94 grams each (Bialik, 2007), 1 liter bottle of PLA plastic would cost $.046 ($.00176*25.94). This is Which is $.007 more than original Fiji Water (1 bottle of PET plastic would cost $.039). Shipping - For 1 liter bottle of water: Asia to Fiji takes 2.3g of fuel & Fiji to USA takes 81g of fuel (a total of 83.3g). 1 barrel of fuel costs $60, and holds 159 liters of fuel. There are 850g/liter, and therefore, 135,150gs (159*850) per barrel. Which means that 1 liter bottle of water costs $.037 in fuel (83.3 / 135150 = .00062*60 = .03698112). (source : Paster, 2007)

The additional Variable cost that these recommendations would require is outlined in this chart, which shows cost increase of $.013 per liter bottle. Vitamin Cost Plastic Cost Shipping Cost 1 liter Bottle Variable Cost Fiji Water $.039 $.037 $.076 Fiji Water $.00625 $.046 $.037 $.089 Complete Since variable Cost + fixed Cost = total Cost, 1 liter of Fiji Water variable cost of $.076 + X = $.22. So the fixed costs are $.144 per liter bottle. Since fixed costs do not change, the total cost of 1 liter of Fiji Water complete would be $.013 more. Additionally, if Fiji water is worth 1% of the industrys value, or $150m, and only sold 1 liter bottles (hypothetical for analysis purposes), they would have to sell 51,546,392 ($150/profit bottles. This chart shows the breakdown of these cost in detail: 1lt Bottle 1lt bottle 1lt bottle Total cost of Variable Cost Fixed Cost Total Cost ~51.5m 1 liter (Total Cost (Variable cost + bottles Variable Cost) Fixed Cost) Fiji Water $.076 $.144 $0.22 $11,340,206 Fiji Water $.089 $.144 $0.233 $12,010,309 Complete Difference in Cost $.0130 $670,103

Selling Fiji Water complete would cost just over half a million dollars more, if sales volume remains the same. To protect against this loss, Fiji water will have to either: 1. Make lower gross profit margins Brand Size Cost/bottle Revenue/bottle Profit/bottle Gross Margin Fiji Water 1 liter $0.22 $3.13 $2.910 92.971% FW Complete 1 liter $0.23 $3.13 $2.897 92.556% Difference -0.415%

2. Transfer additional costs into sales price Brand Fiji Water FW Complete Difference (Breakeven difference) 3. Sell more bottles at same price Brand Fiji Water FW Complete Difference Since this is a new venture, and there is uncertainly of how consumers will react, choosing option #3; consumers purchasing over 2 hundred thousand more bottles of Fiji Water Complete than prior years of Fiji Water original, could be unrealistic and risky the company to depend on. Additionally, option #1 involves monetary loss, which could be ok for Fiji Water since it is owned by an independently wealthy CEO (worth $2b), or it could mean more layoffs and potential bankruptcy. Therefore, even though increasing the price a slight .4% could risk a decrease in consumer demand, if option #1 would greatly negatively effect the companys stability, it may be the correct risk to take for Fiji Water Complete. The risk is high purchasing volume retailers in the distribution chain switching to lower priced competitors, and consumer choosing lower priced water such as tap or private label. However, the price increase per unit is very low, and consumer may not even notice the .4% increase. Another option is , if Fiji Water Complete gains consumer demand and positive sales, the retailers will be forced to carry the product. Therefore, I recommend that the price be set at $3.14-$3.15 per 1 liter bottle of Fiji Water Complete. Action programs / Implementation strategy: 1. Manufacture a. Buy vitamins and PLA. b. Train staff about vitamins and PLA and how to use them in production. c. Fix Equipment to work with new ingredients. d. Produce bottles and prepare cases for shipping. 2. Schedule promotion and launch with resources 3. Take to market a. promote using marketing tactics b. distribution management with transportation and retailers. c. Manage and sell Size 1 liter 1 liter Cost/bottle Revenue/bottle $0.2200 $0.2330 $3.13 $3.13 Profit/bottle $2.910 51,777,701 $2.897 231,309 Sales Volume to make equal Profit of $150,000,000 51,546,392 Size 1 liter 1 liter Cost/bottle $0.2200 $0.2330 Price/bottle $3.1300 $3.1430 $0.0130 .424% Profit/bottle $2.910 $2.910 Profit of ~51.5m Unit Sales $150,000,000 $150,000,000

Measurement/Controls: 4. Quantitative = sales, market share, brand awareness in comparison to past Fiji Water sales and competition, such as SmartWater. 5. Qualitative = customer feedback, brand image Maintain and Improve: 6. Use Quantitative results to benchmark and improve sales. 7. Use Qualitative feedback to improve product and consumer relations. Contingency plan: Best case The best case scenario for this Fiji Water new product plan is that the company will be successful. The new product will sell, and revenue will be more than cost. The generated profits could be used to rehire staff, invest in consumer wanted cause marketing, and saved for future potential recessions and customer trend changes Worst case The worst case scenario for this new product is that consumers will not accept it, will not archive strong brand equity, or competitive advantage in the enhanced water segment of bottled waters. In this case, sales would not generate enough revenue to cover costs, and the project would have to be revenant, or canceled. At this worst case point, Fiji Water would have the option of returning to their core product, exiting the industry, or attempting to reposition with a different new product. References: ! ! ! ! ! ! (http://www.roll.com/about-us.php) Advertising Age, Readers present picks for Advertising Age's Annals of Marketing Disasters, 5/18/2009, Vol. 80 Issue 18, p6-6, 3/5p ANA NIUMATAIWALU, Water filters for residents, Fiji Times Online, August 2009 Anna Lenzer, Fiji Water: Spin the Bottle, Mother Jones, September/October 2009 Issue Anonymous. Beverage Industry. New York: Jul 2009. Vol. 100, Iss. 7; p. SOI8 (1 page) Anonymous. Primo Water: . Primo Water Corporation; American Grown Bottle, Made From Plants, Lifts Bottled Water Sales Ecology, Environment & Conservation. Atlanta: May 29, 2009. p. 398 Anonymous. Wireless News. Coventry: Aug 24, 2009. Beverage Industry, Fiji Water acquired by Roll International. Dec2004, Vol. 95 Issue 12, p8-8, 1/6p http://0web.ebscohost.com.library.ggu.edu/ehost/pdf?vid=6&hid=102&sid=86d55491-4a374d78-9eb1-22f79292cf3e%40sessionmgr110) Chris Bolwig, Fiji government yields to bottled water company pressure, IceNews, July 2008 Christopher Palmeri and Nanette Byrnes, Bottled Waters Lose Their Effervescence, BusinessWeek, January 2009 Christopher Palmeri and Nanette Byrnes, Business Week, Coke and Pepsi Try Reinventing Water, February 19, 2009

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David Lazarus, L.A. business tries to make Fiji Water a star, San Francisco Chronicle (CA); 01/21/2007) Fiji Green Blog, FIJI Water Responds to Mother Jones Article, August 2009, http://blog.fijigreen.com/2009/08/fiji-water-responds-to-mother-jones-article/ Finding Your Next CORE Business Chris Zook. Harvard Business Review. Boston: Apr 2007. Vol. 85, Iss. 4 First Research, Industry profile, Beverage Manufacture and Bottling, 10/12/2009 http://www.answers.com/topic/fiji-water-llc http://www.elle.com/Life-Love/Society-Career-Power/ELLE-s-2008-GreenAwards/%28imageIndex%29/13/%28play%29/false http://www.oracle.com/us/corporate/press/017541_EN http://www.statsfill.gov.fj/Releases/tourism _earnings.htm http://www.wttc.org/bin/pdf/original_pdf_file/fiji.pdf Kenneth Hein. Advertising: Fiji Water Ups Ad Spend Pours Forth 'Eco' Message. Brandweek. April 14, 2008. Martin Roll, Asian Brand Strategy: How Asia Builds Strong Brands, Palgrave Macmillan, New York, NY 2006) http://www.venturerepublic.com/resources/Fiji_Water__The_exotic_water_brand.asp MAURA JUDKIS, Fiji Water Chimes In on Bottled Versus Tap, US News & World Report, July 2008 Mintel Oxygen, America's Changing Drinking Habits - US - February 2009 Mintel Oxygen, Bottled Water - US - December 2008 Mintel Oxygen, Consumer Choices in the Beverage Aisle - US - April 2008 Mintel, Fruit Juice and Juice Drinks - US - January 2009, Market Size and Forecast Mintel, Functional Beverages - US - September 2009 Segment Performance Mintel, Packaging Trends in Food and Drink - US - March 2009, Sustainability: Innovation and Innovators Natalie Zmuda, Zico: an America's Hottest Brands Case Study, Advertising Age, Nov 16 2009. Research and Markets Adds Report: Future Opportunities in Bottled Water Valerie Bauerlein. Bottled-Water Price War Heats Up as Demand Falls, Wall Street Journal (Eastern edition). New York, N.Y.: Aug 31, 2009. p. B.1 What the Hell Is 'Market Oriented'? Shapiro, Benson P.. Harvard Business Review. Boston: Nov/Dec 1988. Vol. 66, Iss. 6; p. 119 (7 pages) Ylan Q. Mui. Bottled water sales see a drought. Latimes. August 14, 2009. Pablo Pster, MBA Sustainability Engineer, Whats the True Environmental Cost of Fiji Water?, triplepundit, Feb 2007. Sukhdev Shah, The true cost of water, Fiji Times online, Jan 2008. ELIZABETH ROYTE, "A Fountain On Every Corner", New York Times. Find A Fountain, May 23, 2008. Claudia H. Deutsch. For Fiji Water, a Big List of Green Goals. New York Times (Late Edition (East Coast)). New York, N.Y.: Nov 7, 2007. p. C.3 Carl Bialik, Water Bottles Slim Down, Wall street journal, Dec 2007

Table 1: Pricing over time (from Mintel Oxygen, Bottled Water US December 2008. Competitive Context): 2005 2006 2007 2008 % change 2005-08 $/gallon $/gallon $/gallon $/gallon

Aquafina Dasani Poland Spring Private labels

2.25 2.99 1.88 1.60

2.17 2.53 1.76 1.55

2.09 2.36 1.79 1.47

2.02 2.12 1.72 1.41

-11.4 -41.0 -9.3 -13.5

Table 2: U.S. new non-alcoholic beverage introductions, 2003-07 (from Mintel Oxygen, Consumer Choices in the Beverage Aisle US- April 2008). Beverage category 2003 2004 2005 2006 2007 Change 2003-07 # # # # # % All channels RTD juice and juice drinks Carbonated beverages Sports drinks Energy drinks Bottled water RTD iced tea Total 289 84 17 24 65 28 507 564 212 31 67 116 69 1,059 391 153 29 64 107 48 792 313 146 12 70 99 52 692 306 118 36 30 106 58 654 5.9 40.5 111.8 25.0 63.1 107.1 29.0

Table 3: FDM* sales and forecast of bottled water, 2002-12 (from Mintel Oxygen, Consumer Choices in the Beverage Aisle US- April 2008). Year Sales at current prices Index Index $million % change 2002 = 100 2007 = 100 2002 2003 2004 2005 2006 2007 2,884 3,194 3,485 4,130 4,744 5,183 10.8 9.1 18.5 14.9 9.3 100 111 121 143 165 180 56 62 67 80 92 100

Table 4: Non-alcoholic beverage sales volume 2003-2008 (from (Mintel Oxygen, America's Changing Drinking Habits - US - February 2009). 2003 $million Total soda Regular soda Diet soda Milk Fruit juice and juice drinks Bottled water 13,735 9,311 4,425 10,793 9,961 3,197 2005 $million 13,475 8,596 4,879 11,503 9,658 4,148 2008 $million 13,072 8,268 4,804 12,758 10,182 5,072 Change 2003-05 % -1.9 -7.7 10.3 6.6 -3.0 29.7 Change 2005-08 % -3.0 -3.8 -1.5 10.9 5.4 22.3

Table 5 (Mintel) FDMx sales of leading bottled water companies, 2007 and 2008

52 weeks ending November 4, 2007 $million Nestl S.A. (Switzerland) Coca-Cola Co. PepsiCo Inc. Crystal Geyser Water Co. Subtotal Private label Other Total 1,478 1,254 857 153 3,741 1,076 367 5,184

% 28.5 24.2 16.5 3.0 72.2 20.8 7.1 100.0

52 weeks ending November 2, 2008 $million 1,392 1,252 770 153 3,567 1,112 430 5,108

% change 2007-08 % 27.2 24.5 15.1 3.0 69.8 21.8 8.4 100.0 -5.8 -0.2 -10.1 0.0 -4.7 3.4 17.0 -1.5

Table 6 (Mintel) Total U.S. sales and forecast of fruit juice and juice drinks at current prices, 2003-13 $million % change Index (2003 = 100) Index (2008 = 100) 2003 2004 2005 2006 2007 2008 (fore) 2009 (fore) 2010 (fore) 2011 (fore) 2012 (fore) 2013 (fore) 16,767 17,553 15,891 16,371 15,461 15,408 15,437 15,326 15,129 14,808 14,436 4.7 -9.5 3.0 -5.6 -0.3 0.2 -0.7 -1.3 -2.1 -2.5 100 105 95 98 92 92 92 91 90 88 86 109 114 103 106 100 100 100 99 98 96 94

Year

Table 7 (Mintel) FDMx sales and forecast of enhanced water, 2004-14 Sales at current prices Index $million % change 2004 = 100 208 335 514 758 828 773 793 857 983 1,132 61.1 53.4 47.5 9.2 -6.6 2.5 8.0 14.8 15.1 100 161 247 364 398 372 381 412 473 544

Index 2009 = 100 27 43 66 98 107 100 103 111 127 146

2004 2005 2006 2007 2008 2009 (est) 2010 (fore) 2011 (fore) 2012 (fore) 2013 (fore)

2014 (fore)

1,286

13.6

618

166

Table 8 (World travel and tourism council) Travel and Tourism Fiji: - US$ mn 2004 2005 2006 2007 2008E 2009F 2019F Personal Travel & Tourism: 112.5 124.5 119.1 133.4 160.9 149.3 278.8 Business Travel & Tourism: 42.6 48.6 50.5 57.6 67.5 59.3 86.4 Corporate: 37.7 43.2 44.9 51.3 60.3 53.0 76.2 Government: 4.9 5.4 5.6 6.3 7.2 6.3 10.2 Government Expenditures Individual: 16.5 17.6 18.6 20.1 23.6 22.2 33.4 Visitor Exports: 584.3 675.6 636.7 648.2 693.9 588.5 1,097.4 Travel & Tourism Consumption: 755.9 866.3 825.0 859.2 945.9 819.3 1,496.0 Government Expenditures Collective: 37.9 40.4 42.6 46.0 54.2 50.9 76.5 Capital Investment: 199.9 204.3 234.8 253.4 301.8 280.5 415.0 Other Exports: 18.4 18.5 19.4 20.8 21.5 22.4 38.3 Travel & Tourism Demand: 1,012.2 1,129.5 1,121.9 1,179.4 1,323.5 1,173.1 2,025.9 Table 9 Total U.S. sales and forecast of bottled water at current prices, 2003-13 $million % change 2003 2004 2005 2006 2007 2008 (est) 2009 (fore) 2010 (fore) 2011 (fore) 2012 (fore) 2013 (fore) 8,526 9,170 10,007 10,858 11,706 12,174 12,566 13,353 14,173 15,006 15,872 7.5 9.1 8.5 7.8 4.0 3.2 6.3 6.1 5.9 5.8

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