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September 2006 Dave and Pam Bolin Receive Ralph Keeling Award

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THE POWER OF BOTTLED WATER<br />

by Ron Schroder<br />

Recently a woman who works<br />

for a local radio station was<br />

st<strong>and</strong>ing in the bottled water<br />

section at a Hy-Vee grocery<br />

store. Another woman came up to the<br />

section <strong>and</strong> looked over the options for<br />

bottled water, <strong>and</strong> noticed Swiss Valley’s<br />

Icy Springs br<strong>and</strong>. She said “I didn’t<br />

know Swiss Valley made water. But with<br />

their name on it, you know it has to be<br />

good”. She proceeded to buy several<br />

bottles.<br />

What a great testimonial to<br />

the quality of our products <strong>and</strong> the<br />

reputation of our company! Consumers<br />

around the Midwest trust Swiss Valley to<br />

make consistently great tasting foods <strong>and</strong><br />

beverages that they can be confident in<br />

serving to their families. That reputation<br />

will become increasingly important as<br />

our competition becomes stronger <strong>and</strong><br />

more diverse.<br />

Particularly in the beverage category,<br />

we now have competitors coming at us<br />

from every direction. Who would have<br />

thought 20 years ago that something<br />

we can get for free from the tap would<br />

become a multi-billion dollar industry?<br />

It’s true. Bottled water is now the second<br />

best selling beverage of any kind in the<br />

U.S., behind only carbonated soft drinks.<br />

That means bottled water outsells milk,<br />

coffee, tea, beer <strong>and</strong> fruit juice.<br />

The two leading br<strong>and</strong>s in the<br />

bottled water industry are from soft<br />

drinks companies, with Aquafina® from<br />

Pepsi <strong>and</strong> Dasani® from Coca-Cola. Our<br />

Icy Springs br<strong>and</strong> continues to grow,<br />

but remains a small part of our business.<br />

Focus throughout the organization is<br />

appropriately on dairy products, <strong>and</strong> it is<br />

a challenge to gain shelf space <strong>and</strong> sales<br />

when competing against large, profitable<br />

companies like Coke <strong>and</strong> Pepsi when they<br />

are pouring millions of dollars into the<br />

development of their water businesses.<br />

Bottled water is a great example<br />

of what can happen to the sales of a<br />

food or beverage when it is offered to<br />

consumers in a convenient form. Now<br />

it is considered cool for kids from grade<br />

school through college to grab bottled<br />

water as their drink of choice, whereas<br />

in the past that was never the case for<br />

the “boring” water from the tap. This<br />

is similar to what the milk industry has<br />

done with single serve milk during the<br />

past 15 years.<br />

In this challenging competitive<br />

environment, we need to continue<br />

working hard on all aspects of our<br />

business, so that we maintain our hardearned<br />

reputation.<br />

SEPTEMBER <strong>2006</strong> page 7

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