Case | HBS Case Collection | January 2009
VOSS Artesian Water from Norway
by Youngme E. Moon, Gail J. McGovern, Daniela Beyersdorfer and Vincent Marie Dessain
VOSS is a Norwegian bottled water company that produces one of the world's purest drinking waters, sold at an ultra-premium price in a sleek cylindrical glass bottle of minimalist design. In the U.S. (the company's primary market), VOSS's high-end brand presence is strongest in on-premise locations-specifically, top-of-the-line restaurants, hotels, and clubs. The brand has only recently begun penetrating the off-premise channel. In June 2007, Ole Christian Sandberg, VOSS's founder and head of U.S. operations, is considering how to grow the brand. The key question is whether VOSS should increase its distribution in the off-premise channel. Will this diminish VOSS's high-end brand cachet? A related question is whether VOSS should begin expanding its portfolio by offering, for example, flavored water for the rapidly evolving U.S. bottled water market.
Keywords: Brands and Branding; Marketing Channels; Marketing Strategy; Product; Luxury; Food and Beverage Industry; Norway; United States;
According to Voss‘s Brand manual, Voss‘s ultra premium positioning has been attained and maintained by:
- Its sophisticated and untraditional design,
- Its unique quality profile,
- Its pricing strategy,
- Targeted markets,
- Targeted Distribution Channels.
As mentioned before, Neil Kraft‘s strategy was to create an eye catching iconic bottle
design that embodied the brand (component 1). Unique quality profile (component 2)
refers to Voss‘s extremely low mineral content. As part of it aura of exclusivity Voss
has given detailed consideration the impact price (component 3) has on the brand
image of a product. By pricing the product at the highest end of the range, Voss has
intentionally positioned itself as ultra premium. Voss has identified two distinct yet
complementary consumer segments as its target consumer base (component 4). The
first being connoisseurs, who generate the vast majority of sales volume, and covet
the brand for its high quality and pure taste, making it an excellent pairing with fine
wines and food. The second consumer group would be image consumers. Those
defined by Voss as being young, sophisticated luxury image conscious consumers
whose interest in Voss keeps the brand fresh and highly visible over time. For these
consumers, Voss‘s design evokes a sense of sophistication, – coolness‖, and
- Professional/college educated
- Higher Disposable Income
The final component of Voss‘s Ultra – Premium positioning is targeted distribution
channels (component 5). In order to reinforce the association of exclusivity necessary
for Voss as a luxury brand to flourish, Voss uses a – scarce, yet fully available
distribution strategy. Up to red‘s retail launch, this meant that the chosen channels
were top hotels and restaurants around the world, where bottled water is one of the
highest margin items on the menu.
Launch ofVossRed into the retail market.
The Mattson and Voss Water Store survey predated the actual launch of Voss Red
into the retail market. The intent is to see if
those results hold true, and to further expand upon the possible brand disconnect between the Red retail initiative and preexisting Voss glass packaging and limited On Premise distribution strategy.
As a means of investigation, a new survey was undertaken during the summer of 2007
outside the Whole Foods location in the Union Square area of New York City, NY.
This store was chosen for the relatively high volume of Voss Red being sold there
(monthly average 30 cases). Moreover, this location saw the shift from carrying Voss
glass to Voss Red. Whole Foods is a gourmet grocery store with a focus on Organic and premium foods and is more expensive than traditional grocers. As a result the clientele shopping there tend to be more discerning and affluent, than those who shop at – every day grocery and convenience stores.The survey was undertaken on three Saturdays: August 18th, August 25th, and September 1st. 21 shoppers were surveyed on August 18th as they exited the store. With the following, two weekends returning 19, and 25 participants.
The survey was spilt into three portions based upon the framework suggested by
Young (2006) for evaluating consumer perceptions of packaging, in which one cells is
questioned first after seeing first the name itself, with secondary cells questioned after
seeing the packaging. On August 18th consumers were questioned in regards to the
Voss brand itself, with the following Saturday consumers being questioned in regards
to Voss seeing it in its glass packaging. The third and final Saturday (September 1st),
consumers were questioned about Voss seeing it in its Red Plastic Packaging. All of
the consumers were questioned individually.