As consumers increasingly seek healthier lifestyles, the flavored sparkling water category has been on the rise over the last few years.
The category is dominated by giants PepsiCo and Coca Cola, so Kathy Maurella, chief marketing officer of challenger brand Waterloo Sparkling Water, is on a mission to compete on flavor in what she calls the “better-for-you sparkling water category.”
“You’d be surprised at the number of people that say, oh, I love you guys. I’ve known you forever versus the ones that said, I tried you for the first time last week,” says Maurella.
“It just reiterates there’s so much upside. That’s the exciting part about being an emerging brand in a $7 billion sparkling water category. Sixty-seven percent of households in this country buy some form of seltzer, club soda or sparkling water. We don’t have 67% household penetration.”
Founded in 2017, Waterloo Sparkling Water is focused on the breaking through on flavor and showing up culturally. “How do I get a full flavor better-for-you sparkling water?,” explains Maurella. “The vision is really this whole concept of, we’re encouraging healthy living, but creating these multi-sensorial moments of wow.”
“When you pop a can of Waterloo and it says peach on the front, you smell the peach, you taste the peach,” says Maurella. “Consumers repeatedly tell us that everything we brought to the market tastes like it is supposed to. And they use it as a break in their day, a treat in the afternoon, a drink with their dinner – a replacement to something else. Waterloo is about driving healthy living, but bringing multi-sensorial wows throughout the day.”
Brand Innovators caught up with Maurella from her office in Austin, Texas to talk about how the challenger brand is breaking through and.. This interview has been edited for length and clarity.
Can you talk about how your mission shows up in your creative?
We really want to be the undisputed leader in the full flavor, better-for-you sparkling water category and potentially beverages overall, long-term. As we think about how we communicate with consumers, innovation becomes extremely important. It’s in the DNA of everything we do.
Our Water Down Nothing ad campaign is emblematic of this. The campaign came not just from this full flavor, better-for-you product, but a cultural dynamic of an emerging brand really in an ultra competitive sparkling water category. We go all in on everything we do as a brand and don’t chase the shiny toys. We stay really consistent with what we are best at and what we’re known for from our consumers. Water Down Nothing was really about our target consumer who goes out and lives life how they want to, which is typically more on a healthy lifestyle.
How are you thinking about showing up in the culture?
It’s really finding and meeting our consumers where they are. Not talking to them but meeting them where they are. After multiple years of 3x category growth and now reaching 10% household penetration nationally, we said, let’s make sure we’re finding consumers where they are in their lifestyle. We just hired Dentsu as a social agency of record.
We had a very strong partnership with one Mr. Guy Fieri last year. The idea was this cultural dynamic of culinary fits into everybody’s lifestyle. Whether they were staying home with their family or going out to find the latest and greatest restaurant that fits their lifestyle, there was a culinary overlap. We also show up at a lot of music festivals, finding consumers where they most enjoy life. You’ll see us at Beach Life this year. We’ll be at the Gov Ball in New York City over the summer. We are at SXSW. It’s trying to be relevant where our consumer already is versus trying to have the consumer come find us.
Tell me about how you break through as a challenger brand in the massive category of sparkling water?
We’ve been pretty methodical on innovation. The idea of building case studies – this brand was built one distribution point at a time. We’ve really made sure as we partner with retailers, whether that is shopper marketing plans or aligning with them on overall trade plans. We really think of them as a partner in conversation and continue to make sure we’re staying relevant as we continue to grow and move forward with them.
We’ve always been pretty methodical on foundational research. Twice a year we do brand tracker studies and household penetration studies to make sure that we’re not just talking to ourselves. You don’t want to get lost in the proverbial headquarters up there in the ivory tower.
Even as we partner with retailers, being able to tell a really pretty consistent, solid story and maintain the relevancy of the brand to help drive the category. We are consistently outpacing the category three to four times growth multiple years in a row, which they realize is a consistent pattern. We’re probably not going to come to the table with the marketing budgets of some of our major competitor budgets, but we do quite all right with what we have and look to optimize as we go.
Talk to me about your background and how your experience in other brands and leadership helps you in this role.
I started my career at Nabisco. (It’s now Mondelēz ) I was there when Kraft purchased Nabisco and so went through some of the best training there. A lot of focus on rigor around analytics and Nielsen and Circana and IRI and whatever data market research that fuels it. I spent multiple years at Kraft and then moved on to Atkins Nutritionals during the low carb boom, after the low carb boom and everything in between. That was game changing for me.
The CEO of Waterloo and I worked together at Atkins Nutritionals. Our CRO worked there too. So we have a strong contingency and crew that we met there. Then I went on to do independent consulting for about 13 years in CPG, retail and direct-to-consumer space. Clients included: Panera CPG, Avon, as well as a division of LVMH. Gaining experience outside the CPG space was extremely relevant on some of the core basics – target consumer, research, brand positioning.
Where do you see the opportunities in the market?
Consumers continue to want to try and try and try. As you do research, no matter what category you’re looking at, it’s like, “yeah, I would try that.” The idea of continuing to evolve the brand so that it does not get stagnant in a world where you’re like, “it’s working, let me keep doing it.”
The idea is how do I do it, but with a twist every single year, because if you can sit back and say, it’s working, don’t touch it, you get yourself in trouble. How do I take in a world of social media and leverage our creator partnerships to make it even more relevant to where that consumer is? When you look at a marketplace, think about a relationship, not just the platform – a SXSW or a Beach Life is a great example.
It’s continuing to build and grow and broader with all of our partnerships. There’s a lot of noise in the space, a lot of emerging brands. We have a team at Expo West and it’s flooded with brands. You have to keep moving forward and pivot. You can’t be afraid to rip the Band-Aid off and say, I’ve been doing it this way, but it’s time to change. We kind of gut check ourselves.
As a small team, we bounce ideas off of each other all the time. It’s not just Kathy, stick to your marketing lane. I have daily conversations with our head of sales to make sure we’re staying on the same page. Our COO and I have touch bases all the time to make sure I understand what he’s seeing from an innovation standpoint and from a manufacturing standpoint that could impact us.
