Danone, Kirin to push bottled water brands

Danone, the diversified French food and drink group, has formed a new joint venture with the Japanese brewer Kirin and its compatriot Mitsubishi Corp which will see the European firm strengthen its position in the bottled water market.

The agreement is designed to accelerate the penetration of the Volvic brand into the Japanese market, as well as encouraging growth in the bottled water market as a whole.

The new company is 51 per cent controlled by Kirin, one of the leading beverage groups in Japan with interests in beer, spirits and soft drinks, with Danone taking 25 per cent and Mitsubishi 24 per cent.

The venture will be responsible for the importation, marketing and sales of Danone's Volvic brand in Japan, but will also handle Alkali Ion, Kirin's bottled water brand.

Danone claims that it is the market leader in Japan in terms of value, dominating the premium sector with Volvic and Evian, the top two brands in this segment. MItusbishi has been the distributor of Volvic in Japan since 1993, while Evian has been handled by the Calpis Group since 1986.

The new venture will allow Danone to build on its long-term relationship with Mitsubishi and to take advantage of the Kirin distribution network, the third largest in Japan. In particular the deal will allow Volvic to double its sales through the vending machine channel, where it has had a limited presence until now.

For its part, Kirin will benefit from Danone's technological and marketing expertise to help develop sales of Alkali Ion, launched by the company in 1999.

The bottled water market in Japan is growing strongly, and Danone said that the combination of the two complementary brands would allow both of them to take advantage of the opportunities there.

Japan is an important market for Danone, whose dairy products have been sold there for over 20 years via a joint venture with Ajinomoto and Calpis.