The water war: Nestlé and Minalba team up to face Coca-Cola

A new giant in the market of mineral water comes out of the paper on Monday. As of today, 284 employees of Nestlé Waters in Brazil will join the 2,731 employees of the Division of waters of the cearense Edson Queiroz group, owner of the trademarks Minalba and Alka. The deal closed in March, was approved by Cade, the competition Council, a month ago. The new company gets a new name, Minalba, and Brazil will meet the production, marketing and distribution of all 11, eight operations in waters, one in soda (Soda brand), a mixed drinks (Citrus) and a third of energy drinks (Night Power). Once the integration is over, probably next year, the company will launch new products in the market like flavored waters, niche that is fever in Europe and the United States. The portfolio of waters, the brand of the Edson Queiroz now add up other six: São Lourenço and Petrópolis, that have been fully acquired, purity Vital that was licensed, and the imported premium Perrier, s. Pellegrino and Acqua Panna, of which Edson Queiroz acquired the right of distribution in the country. In addition to the four factories that had, also join other two purchased from Nestlé (one in Rio de Janeiro and the other in Minas Gerais). Edson Queiroz group already has four other plants in the States of Ceará, Bahia, Paraiba and São Paulo. The goal is to be the leader in water in Brazil. In packages of up to 15 liters, today Coca-Cola, which holds the Crystal Mark, is the largest, with almost 20% market share, according to research firm Nielsen. With the purchase of Nestlé Waters of Brazil, Edson Queiroz reaches 19% share. "We took the first step, which is to increase the portfolio. Now, Let's expand the operations in Brazil ", says Antonio Vidal, Superintendent of Minalba Brazil. With the brands incorporated, the company takes a leap in distribution, especially in the capital and interior of São Paulo, Rio de Janeiro and Minas Gerais, strong of Nestlé. The new company is born to enjoy a spectacular moment of the mineral water market, on the rise in Brazil and in the world. Of 2013 here grew up in Brazil nearly 30% by volume sold (in 2017 were 8.23 billion liters of mineral water) and 60% in billing (8.88 billion reais last year), according to market intelligence company and Mintel data analysis. The expectation of continued growth in the coming years, against the soft-drink market, which lost ground with the consumer search for healthier products. The next step of the Edson Queiroz group is advancing in new market niches, such as flavoured and flavorizadas water, a whooping cough in Europe and the United States. Is a sector in which Brazil is still crawling. While in the United States sales of still or sparkling water with flavor grew 67% between 2012 and 2017, compared with a 27% advance of mineral water. In Brazil, the sector of flavoured water advanced 46% over the same period, while the mineral water advanced 118%. The world average of advancement of flavoured was 54%, according to data from market intelligence firm Euromonitor. Global race growth of flavored waters has triggered a race between major global companies. The most recent was the purchase by Pepsico of SodaStream International, Israeli manufacturer of machinery for aerating beverages, homemade by 3.2 billion dollars in August. At the beginning of the year, Nestlé launched the Sparkling, your brand of flavored carbonated water. Coca-Cola was one of the first to invest in this market-invested 4.1 billion reais in 2007 by Vitaminwater, manufacturer of water plus vitamins and minerals and with taste. Here in Brazil, launched at the end of last year the Crystal Sparkling, made with carbonated water and natural flavours lemon and Chamomile, and Tangerine and lemon grass. "We believe that the sale of mineral water will continue to grow in Brazil, especially because the per capita consumption is still very low, 70 litres per capita per year against 150 litres in Europe. But, we are also attentive to what the consumer wants, which are less commoditized and more personalized, "says Vidal, Superintendent of Minalba Brazil. Invest in flavored water is also a defense against a movement that should gain strength – the consumers who require less plastic packaging in everyday life. In this sense, consumers of developed countries have exchanged bottled water by purified water. Last year, the Edson Queiroz group developed with a partner a packing with 40% less plastic and already works with a lower Cap. Much of the premium portfolio also uses glass bottles instead of plastic. Still, Vidal admits that it is difficult to find a replacement for the plastic bottle. If the justified concerns about sustainability of fact put a brake on the advancement of bottled mineral water, it is too early to tell. But the Minalba Brazil tries to anticipate. The problem, for the company, is that other Giants are treading the same path.