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After building upscale Evian into a major brand, Paul Block knew there was a gap in the market for a middle-tier national bottled water to appeal to price-conscious consumers.

Thus was born Dannon Natural Spring Water, a bottled water brand created by Mr. Block, 41, and his team at Danone International Brands, a division of Danone Groupe, the food and beverage marketer that owns Evian and Volvic waters. Mr. Block is VP of the Dannon Natural Spring Water business unit of Danone.

Buoyed by the borrowed equity of the Dannon name-Dannon yogurt is a sister brand-and a TV advertising campaign launched during the Academy Awards last year from Grey Advertising, New York, that spotlighted the water's purity and trustworthiness, the water has taken off. According to consultancy Beverage Marketing Corp., wholesale-dollar sales tripled from $11 million in 1996, the first year out, to $35.7 million last year.

Several names were considered for the water, Mr. Block recounts, but Dannon was too good to pass up for a beverage segment where consumers are skeptical about the source of their product.

"We've brought an image of Dannon yogurt, which is about nurturing and caring for the health of the family," he says. "The category line extension from yogurt allowed us to position water as a big brand."

Cross-marketing is part of the strategy, with under-the-lid coupons for the water on yogurt containers.

"We know a very large part of Dannon yogurt users are bottled-water users," he says. "They are predisposed to Dannon brands."

A Danone spokesman says, "It's bringing in new users. Thankfully, there's no Evian cannibalization."

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