Popping Our Bubbles
12/21/2012 12:01:00 AM
So I'm at CVS last night and notice there seems to be more shelf space allotted for Perrier, the French brand that sparked the sparkling water invasion in America, to then only become something of a pariah in the very market it helped to create. Flash back to 1977 when the invasion began. Perrier became an instant hit among the hip crowd and soon appeared in movies and all the cool places. The brand had actually been on something of a roll since 1863 when Napoleon III granted rights to use its spring source for drinking water and bathing.
In 1898, Dr. Louis Perrier acquired the site, which legend says even Caesar brought his troops to to quench their thirst.
By 1908, Sir John Harmsworth of England purchased the operation and named it after Dr. Perrier. The legend of French elegance isn't new and Sir Harmsworth sold those Les Bouillans (bubbling waters) for all it was worth. The brand was more famous outside of France than inside and used by English gentleman as the perfect water for mixing drinks. It was considered pure and the ultimate marriage of fresh spring water that merged with volcanic gas creating its mythical bubbly blend.
That myth was shattered in February 1990 when traces of benzene were discovered in the water in North Carolina. Back then management, which argued it was a natural element in water, launched a voluntary recall. Soon it was a global recall of 160,000,000 bottles and maybe not so voluntary. In the process, it was discovered the water was gassed through machinery at the source which forced the company to remove its "purity" label. It took a while to clean the filters and get the product back in the mix.
Back then, there wasn't any real competition for Perrier which lead the parade followed by many not-so-household names:
* Deer Park
* Deep Rock
* Evian (ranked seventh with 1.7% market share)
The brand has been crawling back since then, but I think it may make a strong trust soon. The company, now owned by Nestle, launched its first television advertising last year after a 14-year hiatus. The ads and website go after hipsters, which is an improvement from its product placement decision in 1995 in Golden Eye where a Perrier delivery truck was crushed by a tank.
The product was also seen in Talladega Nights with the arrogant French character.
So, why bring all this up? I used to say Perrier was a cautionary tale against voluntary recall. Having created the category, the brand had 57% market share in 1988 and 45% when the recall began. The next year its share was fifty percent less. There is another moral to the story, however. Taking greatness, or the facade of greatness, for granted is a huge mistake. Stepping away from glory under the assumption it will always be there has led to disaster for countries, individuals, and cool sparking water.
As the fiscal cliff debate drags on, it is clear the final deal will not address the key problem of spending more money than our government has. The internal conflict for Republicans seems to have been answered - give President Obama most of what he wants and watch the nation suffer. The assumption is a collective epiphany that will send the masses running back, through rubble and debris and into the open arms of the GOP. It's something of a pipedream. Sure, higher debt combined with lower cultural and educational standards will take a toll but the timing is difficult.
But beyond politics, can the nation afford to pull a Perrier-like move?
How long can we sidestep a legacy of greatness and fiddle around with policies that punish and discourage individual success and still bounce back on top? You see what Boehner is doing is akin to that benzene water recall. At stake is the continued campaign that says Americans were never rugged overachievers but lived in a giant commune and simply didn't recognize it. Our "purity" of success could be removed from the seal of our hearts and pride in our souls.
Economically we could fold into protectionism and money printing to create a feeling of wealth, all while the debt mountain tickles the clouds and aims for the stars.
America isn't going to collapse overnight, but we would be wise to learn from Perrier. At this point, Boehner has no choice as he gave up the spending fight out of the gate. A deal is imminent. It will not refresh, taste good, or go down smoothly. An Englishman decided to market Perrier as the champagne of water... our fiscal cliff deal will simply be a potent potable that only the stock market likes and politicians can spin.