For Swiss water firm Goba, small is beautiful, quality is everything and location is everything else.

It's a philosophy that has worked for many niche water retailers, who are showing more resilience than larger firms in a market squeezed by the global slowdown and financial turmoil.

Family-owned Goba has snared a lucrative section of the hotel and restaurant market in Switzerland -- beating heavyweights like Danone and Nestle -- for its Appenzell mineral water.

The water comes from a natural spring near Mount Saentis in the canton of Appenzell and is bottled in Gonten, a remote municipality of 1,382 people surrounded by hills.

"Upmarket restaurants buy our water because of our good image: small, confident and independent," said Gabriela Manser, a dynamic former nursery teacher and since 1999 the third generation of her family to run Goba.

Last year, Goba sold 14 million bottles in Switzerland, its only market so far, to earn 12 million Swiss francs (7.54 million euros).

That marked an increase from previous years but the pace of growth has slowed: sales were 11 million Swiss francs in 2006, 10 million in 2005 and 2.2 million in 1999.

Goba also produces soft drinks, including its signature Flauder, an elderflower-flavoured water that was inspired by Manser's memories of the elderflower syrup made by grandmothers when she was growing up.

The Swiss company may be a minnow in the global packaged water market -- worth around $85 billion a year according to Credit Suisse -- but its story reflects wider trends.

As consumers cut back on food and drink bills because of rising inflation, niche market players like Goba, who have built their brand names on exclusivity and purity of supply, have shown more staying power.

Nestle Waters -- which also owns Perrier and San Pellegrino -- saw bottled water sales volumes fall 3.1 percent in the first half of this year and Danone's water sales, which include Evian and Volvic, fell 0.8 percent in the second quarter.

However, Norway's Voss, which sells artesian water in sleek, cylindrical bottles, says business is still strong although growth in the United States -- which accounts for about 75 percent of annual revenues -- is slowing.

"It reflects to a certain degree the contraction in the banking sector," said Knut Brundtland, chief executive of Voss.

"We still see growth, but it is slower in this segment."

Marco Gulpers, an analyst at ING, says bottled water firms are moving away from middle-of-the-road products, placing the emphasis on premium or value brands.

"If you can highlight the naturalness of the water and highlight the quality benefits I think you can still charge a premium," he said. "But that will also be impacted, because in an economic recession people will eat out less. An economic recession would definitely have an impact."

Drinks consultancy Zenith International said in a report this month that global consumption of bottled water increased by 6 percent last year to 206 billion litres.

Analysts say premium bottled waters are benefiting from a growing demand for purity and exclusivity in a world becoming increasingly aware of environmental and health issues.

"'Green thinking' is on the rise," said Richard Veit, Managing Director Hamburg at Interbrand.

"Production conditions, transport routes and packaging are up for discussion and are openly communicated," he said.

"The regional origin is an excellent way to transport values such as quality, credibility or pure nature."

Michael Mascha, author of the book "Fine Waters" and founder of the website www.finewaters.com, says smaller companies have stepped in to fill this demand for greener, purer products.

"Big companies overlooked that trend and opened up a space for smaller companies."

Mascha said origin and purity are now prized differentiators in the water market -- a trend also seen with products like olive oil and vodka where provenance is increasingly important.

Twelve one-litre bottles of Appenzell cost around $11.70, more expensive than other Swiss brands but well below prices for Danone's Evian, Nestle's Vittel and Contrex, and Voss.

The Norwegian firm makes about $5 million a month by selling to hotels like the Four Seasons and the Ritz-Carlton, among others.

Twelve one-litre bottles of Voss water go for $38.50, according to online water store www.aquamaestro.com: the Norwegian firm has enjoyed average annual sales growth of 40 percent since it started seven years ago.

"It's a luxury product in a market which didn't have that segment before," said Voss CEO Brundtland.

Some producers have taken that luxury image to the limit -- Bling H2O, spring water from Tennessee, sells for $441 for 12 0.75-litre bottles which are decorated with Swarovski crystals.

During a lunch break at the Gonten bottling plant, the machines have fallen silent and a sweet-and-sour scent of roses and ginger lingers in the air.

Manser reflects on how she turned what was almost a cottage industry into a company with big expansion plans.

"The company was in a deep slumber," said the bespectacled 46-year-old with wispy short blond hair, a taste for bright red lipstick and startling green eyes.

Goba did not have any money for advertising so she got advice from local experts in return for a case of mineral water.

"Today, we pay them fees," she added quickly.

Goba began introducing flavoured water drinks, first Flauder -- local dialect for butterfly -- and then Himml and Wonder. And Manser started placing a bottle of Flauder on top of every case of mineral water sold -- boosting sales.

In 2005, she was awarded the Prix Veuve Clicquot, Switzerland's entrepreneur of the year. But she is not resting on her laurels.

She plans to launch a new flavoured water next year and is looking for new markets.

"When I look around from the top of Mount Saentis, I can see Germany and Austria," she said, and smiled.