VOSS Case Analysis
VOSS, though only in business for roughly nine years to date, has done an exceedingly
well job on identifying their target consumers. The chosen cliental for VOSS Water as stated in
the VOSS Artesian Water from Norway Harvard Business School case study is that of “high-end
restaurants, hotels, and clubs.” VOSS originally received its “big break” from a manager at the
high-end hotel of the Four Seasons in New York, who stated the possible desire of high-end
retailers wanting to sell high-end bottled water in their establishments. With that, the VOSS
concept and target market was chosen.
The flagship product was that of VOSS Glass. The target consumer in this case was aimed
at top hotels, restaurants, and clubs around the world. These consumers did not mind spending
the large amount of money it took to bring in the bulk orders of VOSS Glass. The perceived
value and the fact that the establishment could mark-up the price five to eight times for what they
purchased it for, made doing business with VOSS well worth the expense.
The secondary target market for VOSS is focused on high-end hotel mini bars. VOSS Silver
was brought into production because of the power of the purchasers. VOSS’ consumers in the
high-end hotel market needed a version of VOSS Water that was easier for stalking mini-bars
and was in packaging that was allowed around pool areas. Though VOSS Silver went against the
original “look” of the product, the company had to meet the needs of their consumers and create
what they were demanding.
The newest cliental VOSS is trying to reach is that of the high-end gourmet retail segment.
The introduction of VOSS Red into the off-premise market will mainly be in affluent
neighborhoods in states such as New York, Florida, and California. Once again the consumers
will be paying a fair percentage more for the prestige of owning and drinking VOSS Red, but
that is essentially what the consumer is looking for. Selling VOSS Red gives the gourmet retailer
a certain level of stature, and the end consumer feels an amount of superiority by purchasing it.
The following table is a basic analysis of the three types of customers VOSS is currently
holding accounts with:
Benefit Demographics Behavior Psychographics Favorite Brands Segment
High-end Highly successful Their customers Status oriented, VOSS Glass, hotels, professionals, go out often, hedonistic Bling H20, restaurants, trust-fund babies enjoy the finer Canaqua, clubs things in life, like Glacial, Tau
to see and be
High-end Bar-hoppers, Their customers Status oriented, VOSS Silver, hotel mini-young enjoy the night active Evian bars professionals life and hanging
Gourmet Affluent families Enjoy status and Status oriented VOSS Red, Fiji, retailers and single people the finer things in Evian
Dare to be different. This is the mantra that Christian Sandberg, founder of VOSS of
Norway has upheld when it comes to creative decisions regarding this artesian water. The idea of
a high quality, expensive water came to mind when he noticed people began carrying water
around as a fashion statement. Sandberg saw this as the perfect opportunity to build a high brand
image of water that the world had yet to see. VOSS was one of the world’s purest drinking
waters from the Norwegian Valley and Sandberg wanted it to be known and displayed
throughout the creation of VOSS. The water is sold at an ultra-premium price in a sleek cylindrical glass bottle as shown in exhibit one from the text, and is the original bottle most known. The design of this bottle was created with the belief that it conveyed “a new way to think about water. Beyond refreshing…to beautiful.” VOSS’ first market was in New York and was to
only be sold at high-end accounts such as restaurants, clubs, and hotels. The main goal was to establish a high quality brand image that was only sold exclusively to the best places, with the price that resembled that. In order to appeal to different markets and create the profits Sandberg had desired for his company, they decided to launch brand extensions and create new packaging sizes. When it comes to water, many different trends have occurred throughout the water industry. Sandberg took notice of this and hoped to achieve the same ideas, but in a more sophisticated manner all while keeping the high-end, exclusive image of VOSS. The different extensions that have become popular are flavored water, energy and diet water, mini-size water bottles for kids, enhanced water with sports caps for athletes, and recycled environmentally friendly water bottles. This was a course that was difficult for the VOSS Company to take because they worried about their image being lost or altered in the market. However, they remained adamant that with their high-end accounts, unique value proposition, and the fact that they did not give away products or discounts, they would continue to grow. In addition to the VOSS Glass, two more product lines were introduced: VOSS Silver and VOSS Red. VOSS Glass is the original and considered the icon of the brand and was primarily sold on-premise locations and exclusive to the top locations around the world. VOSS Silver was introduced specifically for hotel mini-bars, packaged in a PET plastic bottle with a silver stripe that was more convenient for the hotel workers and people consuming them on vacation and around pools. VOSS Red is the most recent that was introduced for the off-premise gourmet retail segment in a limited number of states including New York, Florida, and California. The main reason for the
PET plastic bottle was that VOSS did not want to take the iconic glass bottle off-premise, so they developed new packaging to protect the image and price point. Even after the release with these brand extensions, VOSS was still not seeing the profit they needed. Sandberg learned that the U.S. high-end market for glass on-premise was a smaller universe than expected, and it is just not that profitable. The only option Sandberg saw was to follow market trends in the water industry and develop a series of flavored waters for off-premise distribution. Along with this, VOSS is considering enhanced versions and packaging extensions such as multi-packs of VOSS Red and small-size bottles that can easily fit into a woman’s purse. VOSS has many
developments in the works, and throughout their progress in the market they have maintained their goal of high-quality water that people are willing to pay for.
The market for bottled water is very broad. It ranges from flavored to sparkling, and
includes enhanced, diet, and still. Many of these categories overlap with company’s hopes to expand and differentiate their products. Bottled water is also sold in many distribution channels. Some companies focus their product on selling in convenience and grocery stores. Others concentrate on being exclusive to hotel chains and upscale restaurants. Pairing a specific product with the correct distribution channel is very important when trying to achieve and uphold a particular brand image. For VOSS, it is also important for consumer justification of premium pricing. In the premium bottled water market, there are many competitors. Some include Perrier, Evian, San Pellegrino, and Fiji. These consist of sparkling and still. These companies careful positioning has allowed them to stay competitive in this premium market.
France’s Perrier was introduced to the United States in 1976 and by 1988 was responsible
for 80% of the imported water market. It is a sparkling water that was acquired by Nestle in 1992. They use their traditional green glass bottles as a strength for brand recognition, only recently converting to some green plastic bottles and adding flavors to expand their line. Evian is also
originated from France, and has the strength of being distributed by the popular brand, Coca Cola. This still water was one of the first to launch plastic bottles nationwide, but still produce the classic glass product. Evian is considered a “cachet” brand, producing designer styled bottles for high-end nightclubs. San Pellegrino is also part of the Nestle group. This Italian sparkling water was naturally aimed for fine dining, great for Italian restaurants. This brand’s market has expanded to more common restaurants, hurting its original premium image. The most recent to the market is Fiji, an exotic still water from the Fiji Islands. Fiji has the broadest of distribution channels ranging from convenient stores to resorts. From its widespread availability, it has grown to be the second largest imported water in the market. On the other hand, its accessibility may be a weakness for their brand image in the long run. Their heavy promotions of discounts and give-a-ways make Fiji a tough competitor.
The context that is associated with VOSS affects its total success as a company. Though,
in the material given there were some factors that contribute to the context, they were factors that were out of the control for VOSS to manage. Therefore, as a company they had to play around the external conditions and adapt their internal decisions on how the context of the industry is. Context that affects VOSS from an external point are the environment, society trends, and the technology.
The external environment that VOSS operates in has reacted well with the products
that they offer. Though they are in a niche market that provides premium water, countries around the world are still consuming bottled water. The top total water consumer is the U.S. with 4.73 billion gallons in 2000 and 7.54 billion in 2005. The second consumer is Mexico with 3.28 billion in 2000 and 4.96 in 2005. The last total water consumer is Spain with 1.11 billion in 2000 and 1.56 in 2005. As we can see from the numbers stated, water is a product that people purchase; even though, it may be smaller amounts in different countries. On the other hand, the
consumption per capita is highest in Italy with 42.2 gallons in 2000 and 50.5 in 2005. The second
is United Arab Emirates, with 30.1 gallons per capita in 2000 and 47.7 gallons in 2005. In last
place is the U.S. with 16.2 gallons in 2000 and 26.1 gallons in 2005. As a result, the U.S. is the top total consumer, but is the last per capita consumer when it comes to bottled water. This
represents that even though people are consuming less water individually in the U.S., they are
still consuming more bottled water overall. Moreover, for the water bottle industry companies
they rave to sell in the U.S., but they are not the top per capita consumer and companies like
VOSS still manage to make large revenues.
To continue with another external factor, the society trends and fashions contribute enormously to the bottled water market. As stated in the case study, they are college students that walk around campus with French Evian water bottles as if they were fashion accessories. Let’s
face it, college students and other fashion conscious consumers know that if they have a hard-to-
get product such as VOSS premium water, they know that people will believe they are wealthy.
Moreover, even though the consumer may not have a large amount of money, they still want to
perceive themselves to be ahead of the crowd and be cool, because they are walking around
campus or streets with exclusive water. By having a product that is as sleek and unique like
French Evian or VOSS, people’s heads turn and wonder, “What is that? Water or alcohol?” The
consumer of premium water in the bottled water industry are people that like to be fashion savvy
and want to make a statement.
Technology also takes a role in the bottled water industry. Innovations that have
recently been added to water have been flavored varieties, functional varieties, and sports
packaging. These ways of technology have enhanced the ways to satisfy the consumer’s needs.
For instance, there are consumers that do not like to drink water and would prefer a flavor added
to the water, so that they consume it more. By adding flavor to the water, it meets the need of the
consumer. There are also waters that have functional varieties, which are waters that have
vitamins, nutrients, stimulants and other enriched additives. By doing this, consumers who do
not have the time to take their vitamins or nutrients can drink these types of water and it will
fulfill their dietary need. Another is sport packaging, the technology that creates water bottles
friendly to fitness people. An example would be to have an easy to squeeze bottle with a sport
cap to drink the water easier while running or being active in a sport. In regards to the external
conditions of the water bottle industry, there are many contributing factors that affect the way
companies can run their business. Factors such as environment, society trends and technology all
affect the designs, sales and distribution of a product.
? Total number of sales and number of accounts are increasing on a yearly basis since its
inception since 2002.
? Their market share is increasing year over year since the offering of new variations of
? VOSS has been seen in the hands of many celebrities during the Golden Globe Awards
and Emmy Awards, creating awareness to the public.
? VOSS is being sold within high status areas such as Hotels and Restaurants, due to this
only a select group of people can purchase VOSS.
? They are not doing much marketing and instead are relying on managerial instinct as well
as monthly gathered data from their distributers.
? No promotional or discounted incentives are given to the various customer accounts.
? The price is gearing mainly to a specific customer segment thus narrowing their customer
? They have opportunities to take a step into the flavored water market.
? Their reach has endless possibilities when going over seas to countries they aren’t
? From the retail side of selling VOSS, they could broaden their reach beyond the current
23 states that they are in.
? Customers have a choice of five other types of bottled water at a much lower cost per
? Within only the U.S. market there are over 50 brands to choose from and most offer
different types of water.
? Other companies can gain the business of accounts over VOSS from on-premise and off-
VOSS has been able to take advantage of its increasing market share since their introduction in 2002 to the United States. Some of this increase has been due to viewers of award shows
seeing free advertising through different celebrities. Another reason for their strong presence has
been through the market for bottled water of all types rising over the years. Their strength has
come from the strong core of “daring to be different.”
A main weakness that seems to stand out from the rest has to do with VOSS and how they do not market their product the same way as their competitors do. VOSS, instead, offers
their product to the high-end hotels and restaurants. Because they do not do much marketing,
they have to rely on monthly data gathered from their distributers in order to see who is buying and who is not. The high price of VOSS is also detracting a large customer base from making a
purchase, and instead pricing themselves to a select customer segment.
Opportunities that await VOSS deal with expansion into other states in the U.S. as well as
countries around the world. As of right now, VOSS is only available in 23 states in the U.S. The other states as well as other countries would help VOSS in its mission of increasing their market share. Also, a recent trend of flavored water could help VOSS with their product reach both in
the hotel and restaurant industry as well as in their retail side of business.
As with a new entrant into an already established market, VOSS has a lot to compete with in the U.S. for bottled water. Customers have five different types of bottled water to choose from at much lower prices. From these five types, there are over 50 different brands of bottled
water to select as well as all the other beverage choices available. These different brands of
bottled water also allow the brands to do business with the distributors, thus taking any possible collaboration with VOSS.