Why the marketing genius who made Perrier a household word has fizzled as a small-business consultant.
Why the marketing genius who made Perrier a household word has fizzled as a small-business consultant.
TO BRUCE NEVINS, IT WAS JUST another day in the limelight. Nineteen seventy-nine had been a good year for him, and he had become a regular on the media circuit, profiled in newspapers, mentioned in gossip columns, interviewed on radio and television. With his polished good looks, he had both the appearance and the demeanor of a celebrity. Now he found himself in the studios of KABC Radio in Los Angeles, waiting to go on the air to talk once more about the things that had made him famous.
Comfortable as he was in this setting, he was by no means a typical talk-show guest. He was not plugging a movie; he had written no books. Rather, his fame came from water -- a particular kind of water, one that bubbled up out of the ground in Vergeze, France. There it was put in attractive green bottles and shipped to the United States. It was called Perrier.
Thanks largely to the efforts of Nevins, Perrier had become the toast of the American leisure class. A new generation of health-conscious, upwardly mobile young professionals were drinking it by the truckload, convinced that it was as special as the marketing campaign suggested. Admittedly, other carbonated waters cost less, but they lacked Perrier's natural minerals and its unique taste, or so the faithful claimed.
There were skeptics, however, and one of them happened to be KABC Radio's Michael Jackson, the host of the popular talk show on which Nevins was about to appear. Jackson was so skeptical, in fact, that he had planned a little surprise for his guest. Soon after the show began, he challenged Nevins to a blind taste test. If Perrier were truly distinctive, Jackson suggested, Nevins of all people should be able to taste the difference. Taken aback, Nevins agreed to give it a whirl.
Jackson proceeded to place seven paper cups on the table -- six filled with club soda, one with Perrier. Nevins tried them all and chose one. Wrong, said Jackson; that was club soda. Nevins picked another. Wrong again. A third choice. Wrong once more. In all, it took him five tries to pick out the water from France -- a result that gave Jackson no end of satisfaction.
Nevins, for his part, took the episode in stride. After all, the water was only part of Perrier's appeal. "It's hard to tell the difference between seltzer, Perrier, and club soda," he admits, "but in a restaurant, they don't just bring you a glass of water; they bring you a bottle. As a customer, you respond to the shape of that bottle, the feel of it in your hand, the design of the label. There's something to that, a panache. It becomes something you can identify with."
The water, in other words, was a commodity. The genius was in the marketing.
Marketing is hot these days, and its popularity has spawned a new breed of consultant, the professional "marketeer." Scores of them can be found roaming the business landscape, offering their services to companies, especially small ones, that lack the in-house expertise to win the battle for shelf space in an increasingly competitive marketplace. Many of these specialists come with hefty credentials. Seasoned veterans of such consumer product giants as Beatrice, Dart & Kraft, and Pillsbury, they tell war stories of big-time marketing campaigns for products ranging from Prestone Anti-Freeze to Green Giant vegetables. Some have been spun loose in corporate restructurings and cutbacks. Others have simply decided to strike out on their own. Whatever their reasons for leaving the Fortune 500, their backgrounds suggest a level of real-world marketing experience that would impress even the most hard-bitten of small-company presidents.
And perhaps the most impressive of the lot is Bruce Nevins.
Nevins is an acknowledged master of product positioning, a reputation built largely on his success with Perrier in the late 1970s. Since then, he has done a nice job of positioning himself as well. A 49-year-old bachelor, he drives around in a white Jaguar XJS and is often spotted at trendy watering holes in the company of beautiful women, including Shelley Hack, of "Charlie's Angels" fame, and Margaret Trudeau, the estranged wife of the former Canadian prime minister. When he is not traveling, he lives in an elegant rooftop apartment just off Fifth Avenue in Manhattan. On summer weekends, he can usually be found at his house in East Hampton.
Nevins came to his present position via a circuitous route. A West Point graduate, he spent four years in the service -- one year as a Green Beret in Southeast Asia. He then enrolled in the Stanford Business School and took an immediate liking to advertising and marketing. After business school, he did a two-year stint with Benton & Bowles Inc., the Manhattan advertising agency, before moving on to Levi Strauss as merchandising manager for international operations. Seeing growth opportunities in the Asia-Pacific region, where the company was doing less than $1 million in sales, Nevins set up shop in Hong Kong. By the time he returned to California in 1973 to become Levi's head of corporate planning and new business development, international sales overall, which had been a mere $10 million, had soared to $400 million.
But Nevins was becoming frustrated with corporate life. He soon left Levi Strauss to pursue other opportunities. For a while, he worked with a French apparel company and with the small Canadian manufacturer of Pony athletic shoes. Then came his big break. On a trip to Paris in February 1976, he met with a Pony investor named Gustave Leven, who happened to be chairman of Source Perrier. Leven invited Nevins to become president and part owner of Perrier's U.S. distribution company. Nevins accepted.
The challenge was certainly a formidable one. At the time, American sales of the beverage amounted to less than $600,000, and all signs pointed to a narrow niche. True, Perrier was available at fancy restaurants, but few stores carried it, and you could not build sales of a product that people could not buy. Clearly, Nevins had to expand distribution. The problem was that most major distributors were reluctant to tie up their own resources on an unproven product.
To solve the problem, Nevins proposed to promote Perrier like crazy, on the theory that a massive advertising and public relations campaign would pull consumers into the market and create an incentive for distributors to sign on. He had statistics to bolster his theory. Market research showed that a growing number of Americans were looking for an alternative to alcoholic beverages, on the one hand, and sweet, artificially flavored soft drinks, on the other. Perrier was the ideal beverage for these consumers, Nevins contended. His French sponsor bought the argument, agreeing to commit the millions of dollars required to support the campaign.
With the money in hand, Nevins went into action in the spring of 1977, promoting Perrier under the slogan, "Naturally sparkling from the center of the Earth." He advertised. He flew a planeload of journalists to the Perrier "source" in Vergeze. He hired clean-cut young people to stand in stores and serve chilled samples. Within two years, Perrier was available in supermarkets all over the country, but Nevins had just begun. He arranged for Perrier to sponsor running events. He helped municipalities build more than 100 Perrier exercise courses. He persuaded distributors to splash the Perrier logo on the sides of their delivery trucks. And he put Perrier umbrellas on sidewalk tables across America.
The program was bold. It was innovative. It was lavish. And it worked. In 1979, the third year of marketing, Perrier sold about $60 million of imported water in the United States, a mere drop in the beverage bucket perhaps, but more than double Nevins's five-year projection. Most impressive, he had established a whole new product category, one that was already attracting a host of competitors.
The Perrier launch was the stuff of marketing legends, as successful as they come. But in October 1980, Nevins abruptly called in quits and sold his interest of less than 10% in the American import company. It was time to move on, he says. His five-year contract with Perrier was up, and the "water wars" were threatening the product's future growth. Besides, he was hankering to get involved in other entrepreneurial marketing efforts. Managing a large company, he says, "wasn't nearly as much fun as getting out there and doing it."
So, with Jim Stevens, his senior vice-president of marketing and sales from Perrier, Nevins formed a company, Premium Products Sales Corp., located in Greenwich, Conn. Together they began looking for small companies with promising ideas. Their plan was to come in as a marketing team and do for their clients what they had done for Perrier. For a piece of the action, they were even willing to invest in the businesses they advise. With their know-how, their contacts, and their capital, they were bound to hit some winners, and everybody could get rich and famous in the process. It seemed like a sure thing.
Nevins's first project was a new line of Italian table wines, to be sold under the name "Bollini" and priced at less than $5. The idea came from an Italian investor, who thought it a natural for the wizard of Perrier. Nevins himself was enthusiastic enough to put up his own money, but he soon discovered that introducing a new wine was nothing like opening up a new product category. For one thing, he was competing against a lot of established brands. To build a name, he had to rely heavily on special promotions and coupons, techniques that would motivate distributors motivated. It was an interesting market, he says, but one in which it was hard to make money.
Undaunted, Nevins and Stevens continued to look for opportunities, and they found one in February 1981. Through Nevins's friend Tucker Frederickson, the former New York Football Giants running back turned investment banker, they met a pair of entrepreneurs named Richard LaMotta, a former CBS video engineer with a law degree, and Sam Metzger, a lawyer. Their product seemed like a winning field goal waiting to be kicked. Called the Chipwich, it was a slab of premium-quality ice cream between two large chocolate chip cookies rolled in imported chocolate chips. The previous fall, LaMotta and Metzger had introduced the Chipwich at a street fair in Manhattan's Little Italy, and sold 25,000 in a single week. Now they were gearing up for a major product launch in May, when they would flood the sidewalks of New York with 60 street carts attended by college kids wearing safari clothes and bow ties. Their aim was to sell 25,000 to 30,000 Chipwiches a day, all of which would be made by hand at a storefront in Queens.
For Nevins, the Chipwich was love at first sight. He could see that LaMotta and Metzger scarcely realized what they were onto. Oh, Nevins gave them credit all right -- LaMotta for inventing the product and Metzger for finding the money to get it to market. And the cart program, he thought, was just a super idea. But ice cream was a $4-billion category and growing. Ice cream novelties constituted about a quarter of that, and most of the existing products were commodities.Chipwich had the potential to become a major brand.
But to accomplish that, Nevins said, they would have to get the Chipwich into supermarkets and support the product with an imaginative marketing program. He and Stevens offered to supply the expertise. For $6,000 a month, they would coordinate the rollout in the New York area. Once the program was off the ground, they would charge a sales management fee of 14%. They also agreed to invest about $100,000 of their own money in the company.
LaMotta, Metzger, and their board were delighted. "We were so focused on our cart program," recalls LaMotta, "that it wouldn't have occurred to us to go into the supermarkets."
It soon became clear, however, that the new marketing plan would necessitate other changes in the operation. With the carts rolling all summer, LaMotta and Metzger had their hands full keeping up with demand. At the storefront in Queens, about 50 Chipwich makers were busy slapping together up to 25,000 units a day, but all of those were usually gone by the end of the next Manhattan lunch hour. Obviously, more capacity would be needed to produce enough Chipwiches for the frozen-food cases of supermarkets in the area. After exploring the possibility of farming out production on a contract basis, the company elected to expand its own production facilities, opening up a Chipwich factory in a 20,000-square-foot warehouse in Lodi, N.J. There they would install semiautomated equipment and lick the capacity problem once and for all.
But who was going to get the plant up and running? Neither LaMotta nor Metzger had that kind of experience. Nevins was pushing hard toward a December supermarket rollout. The more they thought about it, the more Jim Stevens seemed the natural choice. Although his background was in sales and marketing, first for PepsiCo, then for Perrier, he seemed to be savvy about operations. So Stevens was put in charge of operations and appointed president, for which he was paid additional fees.
But their problems continued to multiply, and -- as December drew near -- LaMotta and Metzger became increasingly nervous. It seemed to them that there were too many projects under way, too many expensive projects. Nevins, for example, had hired a major advertising agency to do the TV commercials. "He spent about $125,000 just to produce it," says LaMotta. Then there was the plant in New Jersey, which LaMotta says was budgeted for around $600,000. "It came in at more than $1 million."
By March 1982, LaMotta and Metzger concluded that they had made a big mistake. The supermarket program was up and running and generating sales, but expenses were rising even faster. Moreover, the marketing consultants seemed oblivious to the company's precarious financial situation. "We had $100,000 to $200,000 in the bank," says LaMotta, "and Nevins was talking about spending $3 million to build a brand, the way you'd do it at Perrier." They couldn't afford the television ads. They couldn't afford the cost overrun on the plant.Come to think of it, they couldn't afford the services of Nevins and Stevens. So they terminated the relationship.
It took Chipwich four years to dig itself out of its hole. LaMotta and Metzger raised some new money privately and almost did an initial public offering for $5 million to $7 million in January 1983. (The preliminary forms had been filed with the Securities & Exchange Commission, which challenged certain accounting details, and it was never sold.) By the middle of 1984, Chipwich had arranged to license the production and distribution of its product to four large companies. But that summer, Nevins's company joined with the ad agency in a petition to force Chipwich into Chapter 7. Twelve days later, the company itself filed for protection under Chapter 11. It finally emerged from reorganization last January with 40% of the stock owned by a Swedish company.
Some people might look back on such an experience as a cause for introspection, but -- to hear Nevins tell the story -- it was simply a case of getting mixed up with the wrong people. "These guys weren't businesspeople, they were lawyers," he says. "You hope you have management in place that understands you and what you can do for them, and [that] can run a good part of the business. . . . But the expertise I thought was there wasn't. We find that people [often] begin to rely on you for everything, because you've done it before. They see very quickly that they have limitations, and you have talent." Instead of focusing on marketing, "my partner, Jim, [had to spend his time] running around with engineers. We were running the company. . . . It was Murphy's Law -- every problem imaginable." Once he and Stevens were fired, "nobody knew what the hell was going on. They were better off in bankruptcy."
As the Chipwich saga was unfolding, Nevins and Stevens had other irons in the fire -- a fire that was being stoked with hickory. Nevins had a friend named Greg Cummings, who was selling hickory wood chips and cooking logs by mail order from his farm in upstate New York. Advertising in the New Yorker and other upscale publications, he was getting orders from all over the United States. In the spring of 1981, he began talking to Nevins about the prospects for selling his Hickory Cookin' Logs through stores.
Nevins soon warmed to the idea. Hickory had a nice flavor; it was cleaner than charcoal; and it didn't require the use of lighter fluid. All in all, the timing seemed right for a hickory rollout. Of course, the product category wasn't nearly as large as ice cream: the total market for charcoal, Nevins figured, was only around $150 million a year. But unlike Chipwich, the Hickory Cookin' Logs were ready to roll. "Cummings had done a lot of the up-front stuff himself," says Nevins, "and his packaging was great." Nevins saw the potential for $20 million of sales in five years.
So he and Stevens agreed to become Cummings's selling agent. They would buy product from him and sell it to supermarkets in New York, New Jersey, and Washington, D.C. They also invested more than $100,000. To get the program under way, Nevins bought ads in grocery publications and The New York Times Magazine.
But a funny thing happened on the way to the first $1 million. The logs shrank. State officials, making routine checks of grocery products, discovered the problem at a supermarket in the New York area, less than six months after the logs first appeared in stores. According to the package, the weight was seven pounds; the actual weight, officials found, was often less. Apparently, some of the logs had been packaged before they had fully dried. As the moisture evaporated, the packages got lighter. As soon as the problem surfaced, supermarkets began yanking the product off the shelves, effectively killing the program.
Cummings would just as soon forget the whole experience. "It was a costly mistake," he says, and he places some of the blame on Nevins and Stevens for taking the product into the mass market prematurely. Nevins's forecasts were much too optimistic, he says. What sales they had were disappointing. "He had a real New York attitude," Cummings says, "and sometimes New York isn't the best barometer for the rest of the country." Then again, he also believes that Nevins and Stevens botched the rollout. "They should have been in the market by December, and they waited until April." Cummings is now successfully selling Natural Wood Smokin' Chips through mail order and in stores.
Nevins and Stevens see things a little differently, of course. Stevens says that Cummings "wasn't what I'd consider a strong business type. . . . He was naive about what it took to make the manufacturing side happen." Nevins, for his part, suggests possible sabotage. He thinks a large charcoal manufacturer may have played a not-so-passive role in getting the state regulators to examine the new product. "There was concern in the [charcoal] industry," he says -- a concern that was heightened, he adds, "when they saw who was behind [the product]."
So another opportunity had bit the dust. It was, without doubt, a disappointment. Lesser men might have given up after two such ignominious failures, but Nevins and Stevens were not to be denied. While they continued to look for a big score, they did some consulting work for a variety of large companies and for a business acquaintance of Nevins's who was developing a line of salt-free condiments. Then, in the fall of 1982, they were approached by an investor with an idea that had the glimmer of another Perrier.
The investor's name was Steve Adams, and he owned some property in California's Napa Valley. He was interested in bottling the spring water from beneath his land. Nevins and Stevens, whose noncompete clauses with Perrier had just run out, flew to Aspen, Colo., in November 1982 to discuss the project with Adams and some other investors. They discouraged the investors from getting into the bottled-water market. Instead, they proposed that the group puts its money in the next growth segment of the beverage business: soft drinks containing fruit juice. Such a product, they argued, would appeal to the same people who now drank Perrier, but who wanted more flavor.
The investors agreed to put a few million dollars into a start-up called Adams Natural Beverage Co. Nevins and Stevens, who committed more than $100,000 to the company, were hired to run the business for the first 18 months or so. The plan was to launch the product on the West Coast, then roll it out nationally, and eventually sell the business or take it public.
To develop the product, Nevins and Stevens hired a well-known formulation consultant. They also arranged to have the beverage produced at a large bottling plant in Sacramento. Meanwhile, they had retained an advertising agency and were plotting their distribution strategy. After a year of careful planning, Napa Naturals was finally ready for its debut.
The rollout began in northern California in March 1984, and it was picture perfect. Customers were wild about the product, which came in four flavors, each containing 67% fruit juice and no preservatives. It was billed as the "world's first natural soft drink." That summer, Nevins told reporters that Napa was breaking Perrier's sales record for the first six months.
Then the cans began to explode.
Nevins remembers getting a call in September, reporting that cans of Napa Natural were bulging ominously and, in some instances, blowing their lids off. What he heard next was "the sound of my jaw hitting the table." It turned out that the beverage was fermenting because of the high juice content. Nevins says that the trouble should have been discovered before the product was released. He blames the formulation company for not doing its job. "They said they did things they never did."
Be that as it may, Nevins and Stevens were forced to recall thousands of cases of Napa Natural and then did not ship any product for a period of two months, during which time the product was reformulated and the juice content reduced from 67% to 51%. When shipments finally resumed, some supermarket chains, including Safeway, refused to take the product back. In 1985, it was introduced in Oregon, Washington, and Arizona, and last January was reformulated yet again with 30% juice. The new formulation was launched with an advertising campaign featuring O. J. Simpson as the company spokesman.
Meanwhile, the market had grown more competitive. PepsiCo has come in with its own juice-based beverages called Slice, containing 10% fruit juice. As a result, Nevins has had to concentrate on differentiating Napa Natural and making sure the company is not constantly going head-to-head with PepsiCo. In some areas of the country, that has meant switching from warehouse distribution to store-door delivery, in order to get better coverage. In others, it has meant turning to beer distributors. "It's a matter of trial and error," says Nevins. "You look at your costs and you do what works."
To date, Napa Natural has cost plenty. Most of the original $8 million is gone, including about a quarter of a million dollars invested by Stevens and Nevins. The business is close to breaking even on sales of just over $5 million, says Nevins, but it hasn't been easy. Both he and his partner have had to stay in the business far longer than they had planned. Stevens, in fact, has been running it out of Sacramento on a full-time basis for about two years.
Nevins makes no bones about wanting to get out. Last September, he says, they were "90% down the road" on a deal to sell the business to Schweppes, but the latter backed out at the last minute. "We'd like to go national as soon as possible," says Nevins, "but until we do another round of financing or find a partner or acquirer, we need to limit our spending to make sure we can continue." In the meantime, Nevins and Stevens are stuck with the company.
On a sunny day in July, Nevins sits by the pool outside his house in East Hampton. He is dressed nattily in white pants, a faded blue shirt, and Italian loafers without socks. Lunch is over, and he is reflecting now on his experiences since he left Perrier. Things clearly have not worked out as he planned.The money ran out; the supermarkets balked; the logs shrank; the cans exploded. Not that he blames himself. "You want to believe everything's in place," he says. And maybe in big companies, it is. Then again, big companies may simply have the resources to cover their mistakes. That is seldom the case in small companies, as Nevins's experience bears witness.
There is, no doubt, a lesson in all this, a lesson about expectations. Many entrepreneurs have fantasies of bringing in a hot-shot consultant to work miracles and make dreams come true. But success rarely happens that way. The most brilliant marketing program in the world can't make a product any better than it is, or let a company go on spending more money than it has. In the end, all you have to fall back on is your own resourcefulness.
As for Bruce Nevins, he's had it with trying to find the next Perrier. He's sick of prodding distributors and retailers into pushing products. He's tired of worrying about the quality of the things he sells. So, after five years, he is winding down his marketing business and moving on to something he thinks will be more manageable. Car washes.
He's going to work for a company in Philadelphia that has already set up 21 streamlined facilities, called White Glove Car Washes. It was started by one of his classmates from West Point. Nevins will be an operating partner, helping to expand the business across the country. He's excited about the possibilities. The time is ripe, he says, for a more sophisticated approach to car washes, and White Glove has a well-developed system that will allow it to take advantage of marketing opportunities not available to mom-and-pop operations.
"The people who wore Levis in the '60s are into images," he says. "They want to look good. They're smart. They're willing to spend money to keep a car looking good so they can keep it longer. They think about the economics of their cars."
It is not just the market that appeals to him, however. "The beauty of a car wash," he says, thinking perhaps of his other recent ventures, "is you don't have to go through two or three levels of distribution. You can take your product directly to the customer. I like that. . . . If you blow it, it's just you that's blown it."