Abstract
Nestle and Danone are the two main players in the bottled water segment market in the world, competing against each other in certain markets, whereas differentiating from each other in others.
Before discussing the environment in which these two companies are evolving, first will shed light on the two leaders of the water industry in the world and their runners-up, Coca-Cola and Pepsico.
To begin with, we will explain about Danone:
After a merger between two French glass makers, BSN was founded in 1966 and produced flat glass and packaging. Then, BSN diversified into food business, and acquired Kronenbourg brewery, Evian, and the Societe Europeenne de Brasserie. In 1975, BSN merged with Gervais Danone, which was at that time the leading French food manufacturer. In 1994, the group was renamed DANONE.
In 1997, the group decided to concentrate its business on 3 core activities:
-fresh dairy products (yoghourts, desserts and children's food), accounting for 47% of the turnover
-drinks (bottled water), accounting for 27%
-cereals and biscuits, accounting for 23%
So, the company decided to sell off non core businesses (withdrawal of glass packaging operation and sale of the beer business).
Today, Danone is the world leader in terms of sales (in volume) in the bottled water market. It owns 2 of the 5 leading brands, Evian and Volvic, and the top selling brand of bottled water in Indonesia.
Its global market shares in bottled water rise 11%, which accounts for 16.3 billion litres of water sold in a year. Its global turnover for the year 2002 was 13.5 billion euros.
