Nestlé Tries to Overcome Deep-Rooted Habits
By DEBORAH BALL
Staff Reporter of THE WALL STREET JOURNAL
May 23, 2005
MILAN -- Italians drink more bottled water than anyone else in the world does -- but they don't drink it on the go. Italian mothers tell their children that it's bad manners to eat or drink anywhere but at the table. Strict licensing laws make it nearly impossible to sell food or drinks at places like newsstands.
Now Nestlé SA, a giant in the bottled-water business, is trying to build a new market here by changing deep-seated Italian habits.
"If you ask me whether I can envision Italians walking around with a cup of coffee in their hand, I don't think so. But if it's water, I think that's possible," says Fabio degli Espositi, head of distribution for Nestlé Waters.
So Nestlé has designed a new bottle top with a membrane to prevent leaking into leather handbags. To create excuses for Italians to drink water outside, Nestlé managers are organizing pickup soccer games and aerobic sessions on Italian beaches -- and making sure to pass out Nestlé water.
Eating and drinking on the street violate two cardinal rules in Italy -- looking good and eating well. "It gives me goose bumps to even think of it," says Nicoletta Schlechter, a 47-year-old Milan lawyer.
Italians drink an average of 189 liters of bottled water a year, the highest consumption in the world. By contrast, Americans drink only 69 liters, according to Canadean, a U.K. market-research group.
Though tap water in Italy is perfectly fine to drink, about 265 different water brands are sold in the country. Since Roman times, Italians have believed in the curative properties of mineral waters. And some small towns pipe spring water into public fountains.
But Italians drink just 12 liters a year on the move, half what Americans do, according to Canadean. Nestlé consumer researchers found that just 9% of Italians drink water in the car, for instance.
Italians can buy water in a liquor bar, or at a kiosk near a tourist attraction like the Colosseum in Rome, but it isn't easy to find on the street. After aggressively pushing individual bottles of soda for three years, Coca-Cola Co. says on-the-go sales represent just 5% of its Italian sales, compared with about 50% globally.
A gelato or a slice of focaccia is basically the only food Italians enjoy on the street. Italians are often taught that eating or drinking while walking causes indigestion. And many shops and other businesses still close for two hours between 12:30 and 2:30 in the afternoon so people can enjoy a leisurely meal.
Nestlé, a Swiss company and the world's largest food maker, started its push among Italians on the go with Acqua Panna, a brand aimed at young women. TV ads for the squeezable hourglass-shaped 75 cl (25.4 oz.) bottle, known as Panna 75, last year featured a fashionable cartoon character named Lulu who carries a purse containing Acqua Panna, tipped over to show that it doesn't leak. Nestlé hired designer Roberto Cavalli to create a limited-edition label for the water and a small plastic purse to hold Panna 75 that was given out at his recent fashion shows here in Milan.
Edmunda Insam, owner of a café in central Milan, says she drinks at least a liter of water a day for its health benefits but won't drink while walking and is nervous about stashing a bottle in her purse. "If I'm really thirsty, I might buy a small bottle, but I look for a place where I can stop and drink it, like in a park," she says.
Nestlé researchers found that Italian mothers believe that fizzy drinks and ice aren't good for kids. So, to target children, Nestlé came up with a brand of still water called Issima -- an Italian suffix used in superlatives -- that it sells in 11.2 oz. bottles. Nestlé marketers handed out free samples to mothers in supermarkets and explained that the squeezable bottle fits neatly in lunchboxes, and is neither fizzy, nor cold, nor a soda.
Nestlé held contests for kids on its Issima Web site with prizes such as radios and flashlights. The site lets kids play a game following the adventures of Issimo, a skateboarding cartoon character who is also featured in TV ads. Nestlé signed a deal with Autogrill, Italy's largest roadside restaurant chain, to include Issima in its kids' meals.
For kids, "we wanted to come up with something that didn't make them feel like babies in front of their friends," says Federico Galimberti, head of consumer research for Nestlé Waters.
As a publicity stunt, in recent months during ski season, Nestlé set up plexiglass and aluminum igloos on the mountaintops of popular ski resorts with lounge chairs nearby, and flags marking the areas as "Silence Zones." Inside the igloos were books on mountaineering, along with herbal teas and chocolate. Nestlé hired young women, dressed in matching white ski outfits, to pass out more than 2,000 water bottles each weekend.
One weekend in late March in the Alpine resort of Courmayeur, the Nestlé women cajoled skiers to stop and try the new waters and fill out postcards with their reflections on the mountains. Several men scribbled their phone numbers for the women.
As her two children, Sofia, age 4, and Giorgio, 10, lounged by the igloo and played with Issima bottles, Barbara Gatti, who is from Pavia, outside Milan, said she didn't plan to change her water-buying habits. She buys big bottles of water for her family, and she isn't brand-loyal.
As Sofia pestered her to open the Issima bottle, Ms. Gatti said, "The kids like them, but I buy what's cheapest at the supermarket."
With all these efforts, Nestlé has inched up its share of the $3 billion Italian water market to 29% last year from 25.8% in 2003, almost all of the increase attributable to smaller bottles.
To intensify its efforts, Nestlé recently brought over Pietro Marta to run its sales team. His 20 years of food experience includes four years selling Nestlé ice cream and candy in vending machines. Mr. Marta's job is to place 7,500 Nestlé branded coolers filled with its new waters in bars before summer. Because newsstands can't sell drinks, Nestlé figures people will buy water-to-go from bars. Since March, Mr. Marta and his team of 200 salespeople have placed 1,000 coolers.