Marketing in Action Case Real Choices at Nature On Tap Sometimes innovation is less about invention and more about just noticing what's around you. That's what organic water company Nature On Tap learned when it created its company's flagship product. Product developers there discovered something that consumers considered new and different, even though it had been around for more than a thousand yearstapped birch water. If you're a frequent purchaser of brands like Dasani or Aquafina, it's probably no surprise to you that bottled water is big business. U.S. per capita consumption of bottled water is now over 44 gallons per year, 7 gallons higher than the amount of carbonated soft drinks we consume. Selling over $34 billion of a ubiquitous product (water) that is readily available almost for free is an impressive marketing feat. Of course, available almost for free is an impressive marketing feat. Of course, bottled water consumers are not just buying a commodity. They are willing to pay a premium for what they regard as the health benefits they'll get from how the water is filtered and/or sourced. a Enter Nature On Tap with an innovation. For centuries people have tapped the waterlike sap of the birch tree for refreshment and health. According to the University of Maryland Medical Center, the slightly sweet beverage contains a high level of manganese-a quite efficacious mineral that, according to experts, can help to regulate blood sugar, fight "free radicals," and support bone structure through calcium absorption. To add to the value proposition, birch water also contains trace amounts of xylitol, a natural sugar alcohol that the California Dental association says can help prevent tooth decay. Birch water fits into a product category known as "alternative water," with the category's most famous formula being the very popular coconut water. Sales of that beverage were projected to reach over $4 billion worldwide by 2020. Nature On Tap realized that consumers were looking for that next "superdrink," and the company concluded that birch water was "it," especially given the lower sugar content (and calories) versus coconut water. In addition to the benefit claims noted earlier, birch water also contains saponin, which may have anti- inflammatory benefits and can lower cholesterol. Nature On Tap has taken full advantage of the storytelling opportunities that the nature of its product affords. It readily offers up imagery of the beautiful birch forests of Finland, where farmers tap the trees for a truly unique beverage that is "pure, hydrating, cleansing and straight from the tree." The package is also unique-a cylinder made of 75 percent wood- based paperboard that looks like a portion of a birch tree. But while Nature On Tap is riding a birch high, the truth is that birch is not the only plant in the forest. Other companies are busily pursuing their own versions of wonder water. Maple, bamboo, olive, artichoke, and even cactus are all vying for a place on water connoisseurs' palates. And closer to home, it has competitors right in the birch water segment, such as Sibberi, Sapp, BelSeva, TreeVitalise, and Treo. Beyond the growing competitive challenges, Nature On Tap has a unique production and supply chain quirk due to the short two-week window its product can be harvested! This circumstance highlights the criticality of very accurate sales forecasting and precise distribution targets. And like all the products in the category, birch water marketers must deal with often confusing and contradictory claims and counterclaims regarding product benefits. For example, one dietician notes that a cup of oats has about the same amount of manganese as a bottle of birch water and costs about $0.21-far less than the over $3 notes that a cup of oats has about the same amount of manganese as a bottle of birch water and costs about $0.21-far less than the over $3 you're likely to pay for a bottle of Tapped Birch Water. a Nevertheless, as a small player in a niche market, Nature On Tap has a great product story, gets generally positive press, and has built a distribution network that includes leading retailers such as Sainsbury's in the U.K., Whole Foods, and Amazon. Its ability to excel over competitors and continue to grow will depend on how well it keeps up the product innovation and creative marketing that is the hallmark of its story so far. 38 8-30. What kind of innovation is Tapped Birch Water- continuous, dynamically continuous, or discontinuous? Why? 8-31. What other innovations should the company pursue to continue growing? 8-32. Perhaps you, like many consumers, may have just become aware of tapped birch water. What could the company do to move consumers higher in the adoption pyramid