June 22nd, 2008

Nestlé Joins Gaming World to Sell Water

By Claude Brodesser-Akner
Advertising Age

In a clear shift in marketing strategy for a consumer brand aligning with a video-game title, Nestlé Waters’ Aquapod (a natural spring water that appeals to kids with its rocket-shaped bottle) has signed on as a strategic partner for the launch of “Active Life: Outdoor Challenge.” The title is a casual video game for the Nintendo Wii that Namco/Bandai will launch in September.

In an unusually strong commitment to a casual game, Namco is readying half a million copies for sale by the end of the year.

Until now, consumer brands have been leery of associating too closely with a video game’s launch, largely because the titles whose sales make them worth associating with also usually contained so much gore and violence that any marketing benefit would be negated. For instance, while it’s true that “Grand Theft Auto IV” sold more than 6 million copies in its first week, it’s also a game wherein players can actually burn a hooker to death. Games such as “Grand Theft Auto” and “Halo” also require skill and large investments of time. Casual games are video games developed to be played by anyone, even those who’ve never played a game before.

Of course, the beverage industry hasn’t had an easy go of it in recent years, either. Under pressure from high-powered politicos and medical authorities to help end childhood obesity, it voluntarily removed all high-calorie soft drinks from American schools in 2006.

Get in the game
By doing so, marketers likely headed off a hornet’s nest of regulation and legislation at the pass, but they suddenly had to answer a difficult question: Having spent billions to get children to crave their sugary-sweet, colorful drinks, “how do we get kids to prefer water?” asked Jorge Torres, a senior director of youth marketing at Nestlé Waters, who steered the company into the “Active Life” deal.

An answer to Mr. Torres’ question seems to be video gaming—specifically, casual gaming.

The Nestlé/Namco deal on “Active Life” seems as much geared toward moving product as toward insulating the video-game and beverage industries from criticism that they contribute to childhood obesity.

Unlike so many sedentary, violent games, “Active Life” forces players to actually leap about, performing physically vigorous feats such as logrolling, jumping rope, stomp-a-mole and river rafting.

“We’re limiting the amount of calories kids take in [with Aquapod], and offering kids a chance to expend calories via the game,” said Mr. Torres.

Good timing
Nestle Waters rolled out Aquapod just two months after former President Bill Clinton and then-Arkansas Gov. Mike Huckabee announced the voluntary ban of sugary drinks in schools in May 2006. It was an orb lobbed squarely in the direction of families with kids aged 6 to 11.

So far, Aquapod has been a success story, even as the bottled-water industry braces for a slowdown. Beverage Digest reports retail sales of bottled water grew only 9% last year, compared with 16% in 2006.

Mr. Torres noted that while Nestlé Waters North America accounted for about one-third of all bottled-water sales in the U.S. last year, more than any other bottler, its top three brands—Poland Spring, Arrowhead and Nestlé Purelife—came in third, fourth and fifth, lagging behind No. 1 seller Dasani, from Coke, and No. 2 Aquafina, from Pepsi.

“Obviously, we want to be No. 1,” said Mr. Torres.

His deal with Namco might go a long way toward achieving that. According to the Casual Games Association’s 2007 market report, 74% of paying casual-games customers were female, and 72% of them were women over 35. That means the mothers who learn of “Active Life” through the 1 million bottles of branded water coming to stores this fall are more likely to be receptive to Aquapod’s healthful qualities and to appreciate the video game’s aerobic benefit to their kids. They may even pick up “Active Life” themselves. In return, coupons inside boxes of “Active Life” will offer a reduced price on a pack of Aquapod.

The growth of consumer brands’ interest in the casual game segment has also changed Namco’s approach to marketing. Andrew Lelchuk, exec VP-sales and marketing at Namco explained: “As we first see design documents for a game, we now start to think about what kind of partner can be drawn into that game.”

But don’t look for ads in “Active Life” or any other Wii casual title his company makes. “We tread somewhat lightly on the inclusion of third parties into our games,” Mr. Lelchuk said, adding, “We don’t want to turn this into a commercial experience; it’s not meant to be.”

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