Bottled Water from the Rainforest

With competition from Voss and Fiji and a growing bad rap for bottled water, can a startup make it selling luxury water from the Amazon rainforest?

by Ernest Beck

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Is there room on the market for yet another high-priced water in a designer bottle? How about one whose source is in a pristine but ecologically threatened environment? Florida businessman Jeff Moats believes so. Early next year, if a factory and production line are completed on time, his $12 million privately financed startup plans to start selling a superpremium brand of water called Equa in upscale restaurants and trendy food stores like Whole Foods Markets (WFMI). While environmentalists might be concerned, the allure to consumers, Moats believes, will be Equa's purity and minimalist bottles shaped like rain droplets. His source? Brazil's Amazon rainforest, which Moats calls "probably the last place on Earth that holds boundless mystery and mystique."

Smart design and marketing and an exotic pedigree have worked well for bottled-water brands before. After all, the torrid growth of the $10.8 billion U.S. bottled-water industry—part of the estimated $60 billion global market—is due in part to the savvy marketing message that bottled water is inherently better than tap. Drinking it defines us as sophisticated and sexy. It might even help us lose weight, some bottled-water ads claim.

Moats, 54, is no stranger to doing business in Brazil. A former sales executive for the former Digital Equipment Corp., and a World Bank consultant to Brazil, he has in the past tried to export exotic fish and a type of cocoa bean from the region, but both enterprises eventually failed. Ten years ago, while looking for an alternative to cocoa beans, he stumbled on a spring near the equator that is now Equa's source. Moats found the water so pure he claims, "Science will be rewritten based on the natural purity of this artesian spring."

Heavyweights Crowd the Market

Purity, of course, is a major selling point for most waters. Equa's origins in the Amazon will be emphasized, since top-selling premium bottled-water brands come mainly from Europe and the U.S., as well as Fiji. "These brands evoke images of far-off places that contribute to the image and offer a point of difference in a crowded market," explains Gary Hemphill, managing director of Beverage Marketing, an industry research and consulting company in New York.

That's a lot more exciting than buying a two-gallon jug of Poland Spring at Costco (COST). Yet it's mass market brands like Poland Spring, Dasani, and Aquafina—owned by industry heavyweights Nestlé, Coca-Cola (KO), and Pepsico (PEP), respectively—that are crowding the middle market for bottled water and battling it out on the price front. Appealing to bulk buyers has helped push global per-capita consumption of bottled water to a record 27.2 liters, up from 12.6 liters per capita in 2006, according to Beverage Marketing. But it has made the segment difficult to enter for newcomers.

By comparison, Equa will compete in the more rarefied high end of the market, where consumers seek waters that not only quench their thirst, but also convey a sense of style. Priced at around $2 or more per liter, brands such as Fiji (unusual square bottle, tropical South Pacific source), Jana (origins in the "picturesque Croatian village of Saint Jana"), and Voss (slim, cylindrical bottle, water from "the wilderness of Norway") are designed to be savored rather than swigged after a gym workout. With luxury waters, "it's about making a statement," says Barry Nathanson, publisher of Beverage Spectrum, a beverage-trade publication in New York.