DANNON WATER SPRINGS INTO U.S.;EVIAN PARENT PUTS $10 MIL AD BUDGET BEHIND LOW-PRICE SEGMENT ENTRY

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Tired of losing share to faster-growing, lower-price brands, Evian parent Danone Group is aiming its biggest gun-the Dannon brand name-at the U.S. bottled-water market.

Beginning this month, Paris-based Danone's Great Brands of Europe will roll out Dannon Natural Spring Water to most states east of the Rockies. Dannon water will be packaged in the same clear plastic bottles as Evian, but priced lower to match regional water brands such as Poland Springs and Arrowhead.

"It's no secret that Evian's growth is being outpaced by lower-price brands" in the $3 billion U.S. market, said Will Waggaman, group marketing manager at Great Brands. The Dannon brand will take Great Brands into the "heart of the market," he said.

The U.S. bottled-water market is splintered into several segments: sparkling, convenience-size non-sparkling and bulk non-sparkling.

10% GROWTH IN 1994

While the total water market grew at a 10% clip in 1994, the domestic convenience-size, non-sparkling market grew 32%. The segment also accounts for about 65% of total non-sparkling sales, whereas convenience-size imports such as Evian garner about 15%.

In choosing to go with the Dannon name-the leading U.S. yogurt brand-the marketer hopes to bring new users into the bottled-water category. Less than a quarter of Dannon yogurt users buy bottled water, yet more than half of existing bottled-water drinkers buy Dannon yogurt, according to Great Brands.

A PLACE CALLED DANNON

Grey Advertising, Dannon yogurt's U.S. agency and a worldwide agency for Danone, handles Dannon water. TV creative in the works is based on a print campaign used in test, with the tagline, "Water from a place called Dannon."

The ad budget for this year is about $10 million.

Great Brands plans to cross-promote Dannon water with yogurt, using trial coupons.

Separately, Suntory Group last week signed a deal to acquire Hinckley & Schmitt Bottled Water Group, creating the nation's second largest water seller behind Perrier Group of America.

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