The Joy of Giving: For Euphoria Water Company, the competitive edge is charity
In 1982, Paul Newman launched Newman’s Own Oil and Vinegar Salad Dressing. The move surprised customers and industry experts alike with the famous proprietor’s promise to donate all profits and royalties after taxes for educational and charitable purposes. In the years since, that has amounted to over $150 million given to thousands of charities. The actor’s success did not incite a host of imitators, perhaps because for many capitalism and altruism did not seem a workable combination.
Until 2002 at a seminary school.Two rabbinical students, Dovy Ainsworth and Zalman Lipskar, thought it was the right time to create a product that would ‘give back’. Nothing was growing faster than bottled water. The socially conscious would-be entrepreneurs found willing investors, Bernard Werner and David Garfinkle, two Florida-based businessmen with strong track records in both the business and philanthropic communities. “This immediately struck us as so special—a way to bring charitable giving to a different level. We have other business ventures which are purely about profit, of course, but this meant we could be a part of doing good in a very visible way,” Werner recalls.
Shortly thereafter, Euphoria Water Company was born. The company’s philosophy: to create a business rooted in social responsibility, yet one that would operate profitably. Christening its entry into the bottled water category “Charity in a bottle,” Euphoria Water Company, based in Miami, Florida, was founded on a commitment to donate a minimum of 20 percent of the profits to charity. The new firm entered into mutually beneficial marketing agreements with several national charities including March of Dimes, City of Hope, Special Olympics and the Make-A-Wish Foundation. Every bottle of Euphoria Water proudly (and prominently) displays the charity’s logo and message in a special co-branding rights agreement. The concept and presentation takes donating to an entirely new level, proving that a business can seek to do well by doing good.
Euphoria Water is currently the fastest growing new bottled water in the western United States. Since its initial launch in Arizona in 2002, Euphoria has had explosive success and seen continued sales growth. To date, Euphoria has contributed more than $250,000 to charity—an achievement no other bottled water company can tout. Donations to its four charitable partners are based on an agreed-upon percentage of sales which approximates $.20 per case on average, with no limit on the total amount to be donated. As the company expands its distribution and sales, donations to charity will continue to increase.
“I would say the quality of water along with the charitable cause marketing element does make a significant difference with both retailers and consumers alike,” said Patrick Connors, vice president of marketing at Liquid Investments, a California distributor of Euphoria Water.
By partnering with well-known respected charities, Euphoria stands out in a crowded marketplace—over 900 brands of water at last industry count. Both buyers and consumers appreciate Euphoria’s unique cause-related business model and the brand is quickly replacing major competitors (with more money and distribution muscle) on store shelves. “I think cause-related marketing is clearly a competitive advantage for Euphoria,” Connors said.
The consumer recognition of the charities partnering with Euphoria is one of the reasons for Euphoria’s outstanding success. The charity partners’ mission statement and logo are prominently displayed on every bottle label. These charity organizations are recognized by more than 88 percent of all consumers and have over 13 million donors between them.
Market research has consistently shown that when the consumer feels an emotional connection to a brand they are more likely to purchase that brand over another. When consumers see that Euphoria actively participates in charities they are familiar with and widely respected by the community, they are more apt to purchase Euphoria over a competitor.
Moreover, consumers overwhelmingly prefer when a manufacturer of goods gives back to the community. In fact, according to a leading charity industry source, 81 percent of consumers will switch to a brand that has the same quality and price as their usual brand if there is a cause-related activity involved.
Euphoria has created a symbiotic relationship with its charity partners. The bottled water company and the charities both receive benefits from this partnership. While the charities accrue a percentage of Euphoria’s profits, Euphoria receives the marketing benefits of a partnership with a large scale, recognizable and trusted organization.
There are unexpected ‘bonuses’ as well—for example, Euphoria Water is now provided to players in the dugout at Giants Stadium in California. When the television cameras find them quenching their thirst, it’s the pink caps and ribbon logos on the bottle that grab the attention of the lens—and garner additional support for breast cancer research, according to Werner.
The charity partners have contributed to the relationship by spreading the word of the water’s availability to their supporters via email, newsletters, events, websites and other mediums. The relationship allows Euphoria to participate in public service announcements (billboards, bus shelters, media spots) normally reserved for larger corporations with extensive marketing budgets.
More than 2,000 events are held annually to promote the charity partners, creating heightened exposure for Euphoria, which has the opportunity to participate nationwide. Furthermore, Euphoria has been the exclusive water sponsor for a number of events including the Arizona Rock N’ Roll Marathon with approximately 18,000 attendees. Similar opportunities frequently arise because of Euphoria’s partnerships with the charities. Other forms of promotion used by Euphoria include radio and outdoor advertising, in-store demos and many other marketing vehicles and mediums to highlight the brand’s appealing competitive differentiation.
“Euphoria is one of the most user-friendly suppliers we’ve worked with. They’re always open to new ides and they’re very generous providing product donations to worthwhile causes,” Connors said.
According to the Beverage Marketing Corporation, a leading industry authority, total bottled water consumption in the United States has more than quadrupled from 1980 to 2002 to more than six billion gallons. Representing some $11 billion in retail sales, it is the fastest growing segment of the beverage industry. Since its introduction to the Southwest retail market in 2002, Euphoria’s annual sales have increased from 55,000 bottles in 2002 to a projected 20 million bottles by the end of this year.
The company’s cause-related business model has allowed it to build distribution and positive consumer awareness in several western markets, including Arizona, Nevada, New Mexico, Texas, Colorado and California. The brand has been selected by some of the largest and best-known distributors in the southwest including Mesa Distributing Company in San Diego, Sacramento and Santa Rosa; Mission Beverage in Los Angeles; Premium Distributing in San Diego and Pearce Beverage Company in Phoenix. Euphoria Water can now be found on the shelves of thousands of grocery stores, pharmacies, convenience stores, bars and restaurants including Osco’s in addition to leading retail outlets like 7-Eleven, Albertsons, Bashas’, IGA, Save Mart, ARCO am/pm and many others.
Euphoria’s products are priced competitively with Nestle, Sparkletts, Poland Springs and Crystal Geyser and slightly less than Dasani and Aquafina. Grocery and convenience store buyers seem to appreciate the diversification which Euphoria offers to the mid-priced water set and several of those outlets have authorized Euphoria to replace other mid-priced waters altogether.
The company offers both natural spring water, from sources located on the West Coast, and purified water created by reverse osmosis. The collar labels contain the phrase “an act of kindness in every bottle” and the customer is assured of great taste, purity and a product that exceeds FDA requirements for bottled water in the United States. Spring sources are identified on each label—Euphoria currently has production facilities in Commerce, Calif., Phoenix, Ariz, and Las Vegas, Nev, with plans to open two new operations in Austin, Tex and Montverde, Fla.
The members of Euphoria’s management team see continued growth in the future. The company’s projected strategy is three-fold: increase distribution, leverage its charitable partnerships and seek greater production efficiencies. Euphoria expects to launch their first penetration into East Coast markets before the end of this year. As sales grow and the brand achieves more widespread recognition, the company plans to expand into other states. By working with a number of packing facilities, the company aims to increase production efficiencies, which will allow it to offer buyers and distributors maximum price/margin benefits.
Recently, Euphoria Water was named the official water of the San Diego Sports Arena, supplying the company with year-round sampling and exposure to roughly 750,000 people. A two-year agreement provides Euphoria with exclusivity at the facility along with concourse signs that spread the brand’s message. “Having Euphoria in such a high-profile venue will give our charitable partners greater exposure, allowing us to help spread their messages and to increase sales and donations,” explained Werner, who today is proud to be CEO of Euphoria Water Company. David Garfinkle serves as Chairman.
Where are the two former rabbinical students? Dovy Ainsworth is the firm’s Vice President Marketing Director, responsible for managing the distribution network, retailer relations, product merchandising and marketing. Zalman Lipskar, as Vice President Development Director, handles product development, distribution and charity logistics.
What began as the desire of two rabbinical students to create a product that would give back has proven profitable—for both the charities and for Euphoria, strengthening customer relationships, driving increased sales, supporting important causes and creating brand loyalty.