Anheuser-Busch Buys Sante Mineral Waters
Flavored mineral water, long overshadowed by soft drinks such as Coca-Cola and Pepsi, received a significant boost Monday as the nation’s largest brewer, Anheuser-Busch, announced that it has purchased Sante Mineral Waters of Santa Rosa, Calif.
“This acquisition is consistent with . . . (our) objective to expand to new products that have generated a high level of consumer demand and have long-term growth potential,” said T. Michael Carpenter, Anheuser-Busch group vice president.
The St. Louis-based brewer, which has developed a reputation as a tough, no-nonsense competitor in the beer industry, announced its purchase of Sante only three months after it acquired Saratoga Springs Mineral Water of Saratoga Springs, N.Y. The two acquisitions place Anheuser-Busch among the largest owners of the 40 brands of sparkling water currently marketed across the country.
Bottlers believe that sales of the flavored mineral waters, which range from water flavored with sweet fruit juice to unsweetened lime or orange-flavored drinks with little or no calories, will be helped by Anheuser-Busch’s entry into the market.
“The fact that Anheuser-Busch has entered the market proves that mineral water is indeed an exciting, viable market,” said Sheri Gross, vice president of IVI Inc., the Los Angeles-based importer of Victoria Springs. “It will be a plus factor for us. It should benefit the entire industry.”
Led by France’s Source Perrier S.A. and its U.S. subsidiary, Perrier Group, the sparkling water industry in the last decade has had great success convincing Americans that water, although available from the tap for next to nothing, is worth paying a premium for.
90% Sales Gain
In 1984, the latest year for which figures are available, marketers of domestic and imported water rang up $856.7 million in sales, up more than 90% since 1974, according to the International Bottle Water Assn., an Alexandria, Va.-based trade group. The group forecasts another 15% gain in 1985.
Carpenter said Anheuser-Busch has no immediate plans to change the 18-member work force of Sante Mineral Waters, which reported sales of $8 million in 1983. Company officials could not be reached for later figures.
Sante’s line of flavored mineral waters--orange, cherry, lemon, cola, lime and root beer--are currently distributed throughout California and the Pacific Northwest.
With net income of $392 million on sales of $6.5 billion in fiscal 1984, Anheuser-Busch has the financial wherewithal to expand that market. But some doubt that the brewer has the marketing know-how to succeed, particularly in light of the brewer’s failure in the 1970s to successfully promote its first two soft drinks--Chelsea and Root 66. They were dropped from production in 1980, said Anheuser-Busch spokesman Michael R. Fleming, who declined to give a reason for the move.
Beer, Soft Drinks Different
Jesse Meyers, publisher of Beverage Digest, characterized Anheuser-Busch’s previous run at the soft-drink market as “oblique.” Selling beer and soft drinks, Meyers added, “are two completely different things.”
But Gary Hemphill, managing editor of the trade publication Beverage Industry, believes that Anheuser-Busch’s experience with the two soft drinks is not indicative of its fate with flavored mineral water.
“They were ahead of their time,” Hemphill said, referring to Chelsea and Root 66. “At a time when there are more and more health-conscious or diet-conscious consumers, they (Anheuser) now have a product that appeals” to that growing group.
