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Coca Cola's Plan: Just Say No - To Drinking Tap Water
Published on Sunday, September 2, 2001 in the New York Times
Going Backwards
'Just Say No to H20'
(Unless It's Coke's Own Brew)
by David F. Gallagher
 
In this age of branding, even plain old milk needs a big ad campaign and celebrity endorsements. But another popular beverage, tap water, has no such support a tactical misstep that has left it vulnerable to aggressive competitors like the Coca-Cola Company.


The Associated Press
Coca-Cola's entry in the bottled-water sweepstakes.
Coca-Cola offered a glimpse of its battle plan against tap water in an article on one of its Web sites headlined "The Olive Garden Targets Tap Water & WINS." Aimed at restaurants selling the company's fountain drinks, the article laid out Coke's antiwater program for the Olive Garden chain as a "success story" for others to emulate.

The article was posted three years ago but went unnoticed until this summer, when Rob Cockerham, a graphic designer in Sacramento, Calif., stumbled across it. It then spread through Internet circles until Coca-Cola started fielding questions about it and took the entire site down. A spokeswoman said the company was concerned that the site, which was due to be dismantled anyway, might be misinterpreted by consumers.

The article follows, along with other examples of the company's campaign to address the water problem.

The Situation

Water. It's necessary to sustain life, but to many Casual Dining restaurant chains it contributes to a dull dining experience for the customer. Many customers choose tap water not because they enjoy it, but because it is what they always have drunk in the past. In response, some restaurant chains are implementing programs to help train crews to sell alternative choices to tap water, like soft drinks and noncarbonated beverages, with the goal of increasing overall guest satisfaction. Because of its own successful campaign against water, the Olive Garden has recently sent a powerful message to the entire restaurant industry less water and more beverage choices mean happier customers.

The Plan

Olive Garden restaurants, like many other Casual Dining locations, were facing a high water incidence rate. They wanted their restaurant crews to emphasize the broad array of alternative beverage selections available, with the hope of reducing tap water incidence. Olive Garden's goal was to influence customers to abandon their default choice of tap water and experience other beverage choices to improve their dining experience.

The Olive Garden asked Coca-Cola USA- Fountain (CCUSA-Fountain) to help them create their beverage plan. CCUSA-Fountain stepped up to the plate and suggested a tap water reduction program named H2NO.

The Plan Details

H2NO is a crew education kit containing information about beverage suggestive selling techniques (a technique used when a server suggests a profitable beverage in place of water to the customer during the ordering process). It matched perfectly with what Olive Garden had envisioned. Restaurant managers and servers use the kit to emphasize the wide range of beverage selections available, including soft drinks, non-carbonated beverages and alcohol. As a side effect, overall check averages should increase, and remember, increased check averages mean higher profits for the restaurant and more cash in servers' pockets.

Olive Garden restaurants embraced the program and even took it to a higher level. H2NO was incorporated into the restaurant chain's schedule of monthly skill sessions where sales managers (store managers) led the crew through training exercises. In addition, The Olive Garden developed an employee incentive contest linked to H2NO with CCUSA-Fountain called "Just Say No to H2O."

Olive Garden sales managers set beverage sale store goals and server goals in connection with the contest. All restaurants that reached the combined goal had a chance to win an all-expense-paid trip for servers and the management team to Atlanta. Other prize packages containing Coca-Cola merchandise were awarded.

The Win

When the contest was completed, almost all participating restaurants realized significant increases in beverage sales and reduced levels of tap water incidence a strong indication that Olive Garden restaurants succeeded in enhancing the customer's dining experience. And perhaps most importantly, Olive Garden expects to see this trend continue as the skills learned become part of the crew's everyday interaction with restaurant customers.

Dull dining experiences are clearly an issue, but another article on the same site, titled "On the Waterfront," was less circumspect about the real problem with tap water: it's free. Research by Coca-Cola found that some restaurants were shooting themselves in the foot by serving patrons tap water they had not even requested.

Some 20 percent of consumers drink tap water exclusively in Casual Dining restaurants and 17 percent drink it in Family Style restaurants. And, according to the latest findings, these numbers continue to grow. This trend significantly cuts into retailer profits. . . . Research was conducted to better understand why tap water consumption is so prevalent and why consumers are making this beverage choice. . . .

The most important research findings may be the simplest consumers choosing tap water may not have been given a choice at all. Many respondents said they were served water without being asked. Likewise, they were unaware of value offers, like free refills, which can positively influence a beverage decision in favor of a soft drink. . . .

Research shows why consumers drink tap water, and clear alternatives exist in each case. It is possible to make other beverage choices more relevant to consumers in an attempt to increase the number of soft drinks sold and boost additional profits. Water conversion can be a win for consumers too their meal will always be enhanced by a quality beverage choice. . . .

Twenty percent of tap water drinkers at both lunch and dinner say they "choose" water "because it's there." Conversion strategy: Encourage servers to influence the beverage ordering process to increase consumer awareness of other choices. For instance, offer water to consumers only upon request; highlight value or refill menu messages . . . and train servers and hosts to use suggestive selling techniques or point out beverage choices on the menu. . . .

Approximately 15 percent of lunchtime water drinkers, and 21 percent at dinner, choose tap water out of habit. Conversion strategy: Previously mentioned conversion suggestions can subtly influence consumer purchase decisions in this case. However, research showed that those who drink water out of habit are the least likely to convert.

While researchers delved into the mysterious attraction of tap water, Coca-Cola's marketing side was coming up with a way to sell it. Dasani, a bottled water Coca-Cola introduced in 1999, sits on store shelves next to waters from distant mountain springs, and can cost just as much. But, like Pepsi's Aquafina water, its origins are more humble, as evidenced by these excerpts from the "Understanding Dasani" Web page at www.dasani.com:

Q. What is Dasani?

A. Dasani is a purified water enhanced with minerals for a pure, fresh taste. It comes in light blue-tinted, recyclable bottles. Dasani is The Coca-Cola Company's first bottled water in North America.

Q. What does the name Dasani mean?

A. People are having a lot of fun guessing the origin of the name Dasani. One Coca- Cola executive jokingly said it sounded like a `Roman god of water.` Actually, the name Dasani is an original creation. Consumer testing showed that the name is relaxing and suggests pureness and replenishment.

Q. Where does the water for Dasani come from?

A. To create Dasani, Coca-Cola bottlers start with the local water supply, which is then filtered for purity using a state-of-the- art process called reverse osmosis. The purified water is then enhanced with a special blend of minerals for a pure, fresh taste.

Coca-Cola now seems eager to promote water, just not the free kind. In April, the company teamed up with a Web site called Ideas.com, a kind of marketplace for idea-seekers, to solicit input from the public on ways to simplify the drinking of branded water. By the time the "idea quest" ended in July, 2,090 people had offered suggestions. From the Ideas.com site:

Idea Quest:

Encouraging People to Drink More Water

Buyer:

The Coca-Cola Company

Description:

Many doctors have suggested that people should drink eight glasses of water a day. What ideas can you think of, that would make it easier for people to drink more water? Your idea can include Coke's current water brand, Dasani, or a new brand. It can include current products, or newly created ones you've invented yourself. It can even include new devices for the home, office, school or person on the go.

Payout:

$5,000 will be awarded to the best idea submitted.

The company says it has yet to choose a winner.

Copyright 2001 The New York Times Company

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