Competition

The market of soft drinks is very competitive where sparkling water has a great potential of development since consumers are more and more attracted. This market is very concentrated with "a production of 90% in France" by the groups Danone (Badoit, Salvetat), Nestlé Waters (Perrier, Quezac, and San Pelligrino), and Alma (Saint-Yorre, Rozana, and Vichy Celestin). 

There are, however, four major national brands that have an oligopoly within restaurant, cafés and hotels, that are: Badoit, Saint-Yorre, Perrier, and San Pellegrino. In addition, there is a new entrant called St-Amand who has lot of difficulties since it lacks of innovation. So, we can see that competition is very rude and that those brands have to constantly innovate in order to differentiate themselves from each other and to gain more market share.

 

Strategies of the key competitors in the market

In this part, we will see the strategies of the four brands that have an oligopoly in the French market.
San Pellegrino is a challenger and have gleaned market share of the Giant of sparkling waters Badoit. The brand focuses on too strategies that are: acquisition strategy (presence all over the world), and alliance and cooperation strategy as for example its partnership with the jeweler Bulgari that both jointly launched a limited edition bottle, which gives a new visual identity. Additionally, the brand took on a new challenge of modernizing the packaging that is more impacting and is following a policy of communication and transparency. Besides, the brand concentrates more in the R&D and technology in order to satisfy the customers' demand.

Badoit:

Badoit is the market leader and is well positioned in terms of distribution and marketing in France with a market share of 32.5% in 2011. Badoit tends to accentuate the perception of sparkling water especially the red Badoit and this by focusing on its authentic identity. Moreover, Badoit establishes an aggressive policy to conquest restaurants by strengthening the sparkling water side. As well, Badoit tries to innovate and recently launched a range of flavored water without sugar and natural fruit flavors.

Perrier:

Perrier is a leader in the international side since it focuses on an expansion strategy by penetrating many markets such as USA and Japan. Meanwhile, the brand gives a strong importance to the design of its packaging (glass, cans, fluorescent) in order to show the purity of its product and the festive aspect. Perrier targets mainly young segment so that they gain the loyalty of their customers in the long-term. Besides, Perrier wants to preserve an efficient communication through TV, press, posters, radio, cinema. As well, the brand uses non-media with direct marketing, sponsorship (Tour de France, Rugby), and promotion at the point of sale, and also it uses major events such as Roland Garros broadcasting audiovisual and advertising signs around the field.

Saint-Yorre:

St-Yorre positions itself on the health sector. It follows a strategy that fights against aging and bad digestion and also tries to differentiate itself by diversifying its products and thus by lunching energy drinks. In addition, St-Yorre created a bottle of collection for the festive season. However, St-Yorre is a follower and has to innovate more and establish strategies in order to be more competitive in the market of sparkling water.

San Pellegrino:

Competition is fierce; therefore, companies play on innovation card and focus on new advertising campaigns. They think to constantly renew types of consumers in order to keep or have the leading position. However, those brands have to consider the threats of substitution such as sodas. Therefore, their major indirect competitors are Coca, Cadburry Shweppes and Pepsico, which are giants that constantly innovate and diversify their products.