The market's sudden growth, however, is forcing Perrier, the granddaddy of imported water brands here, to defend itself with a new ad campaign for its newest Valvert line. The new brand is aimed at deflecting not only established Japanese brands, but a slew of competitors in the $77 million imported segment.
According to Fuskao Hori, VP-Perrier Japan, sales by volume for domestic producers has increased by four times since 1986-when a ban on unpasteurized mineral water was lifted-and imports have expanded 65 times by volume.
Until then Perrier, a naturally carbonated water, had a lock on the import market.
Japan's booming mineral water segment is dominated by two Japanese brands: House Food Industrial Co.'s Rokko no Oishii Mizu (Delicious Water from Rokko), which holds 21.3% of the market, and Suntory's Minami Alps no Tennensui (Natural Water of the Southern Alps), with 12.9%. Suntory also distributes Perrier.
The two waters take different approaches in their advertising. Rokko's TV spots, by Hakuhodo, stress the brand's high quality. Minami's TV and print advertising, by Dentsu, also emphasizes its safety and depicts a clear stream of mountain water. Neither company would disclose its ad budget. Part of the growth is due to the Japanese turning away from popular soft drinks. In 1993, sales by volume of carbonated drinks dropped 3% to 2.8 million kiloliters; juice drinks fell 6% to 1.9 million kiloliters and sports drinks plunged 7% to 785,000 kiloliters, compared to 1992. Mineral water sales, meanwhile, were up 20% in volume.
Another factor is Japan's water system-which lacks sufficient pressure in high-rise apartment and office buildings to get it past the second floor. Therefore, taller buildings pump the water into rooftop tanks, which could be a breeding ground for algae. Fueling mineral water sales are diet-conscious young Japanese women, who scoot out of their offices at noontime to pick up a box lunch, and, according to Ms. Hori, more and more, a bottle of mineral water.
But while the category's taking off, Perrier's share hasn't. The Perrier brand holds only a tiny 0.1% share of the total market, so the company is pinning its marketing hopes on Valvert which, al though it hit Japan only this year, already has a 2.4% share of the total market.
Despite its early entry into Japan, Perrier's corporate share trails that of Danone Ltd.'s 11.7%, comprised of Volvic 7% and Evian's 4.7%. Nestle's total share is 5.4% including its Contrex, Vittel and Arrowhead brands.
To stake claim to a larger share, Perrier is promoting Valvert as the "new face." The TV ad strategy, created by FCB Japan, pairs Valvert with Jublio Iwata J. League team member Mashashi Nakayama. A 30-second TV ad started in March shows Mr. Nakayama lying in tall grass wearing his soccer uniform when a female hand appears with a bottle of Valvert. Mr. Nakayama tries to read the label but has trouble saying more than "Val...Val..." A pretty woman gives him help and says "Valvert."
In outdoor ads by Dentsu, Ms. Hori says the message is also "A new face," but doesn't feature Mr. Nakayama.
One thing that won't change among imported mineral waters is price. Ms. Hori said French brands are avoiding getting into a price war with domestic producers because they are stressing "quality." Valvert and Volvic are both priced at $2.30 for a 1.5 liter-bottle while domestic produces are now selling at $2 per 2 liters.