The Wall Street Journal (and the Globe and Mail) report today that, “Bottled-water makers have stepped up a months-long price war this summer to win back customers who have turned on the tap to save money and reduce environmental waste.”
“Sales of bottled water have suffered as environmentalists urged boycotts of the product. In 2007, environmental groups intensified campaigns to persuade consumers to reject bottled water as wasteful. Several city governments and restaurants stopped stocking it.”
THE SELLING PRICE OF BOTTLED WATER REDUCED
“In the first quarter of 2009, bottled-water brands sold for an average of $1.35 a gallon in the U.S., down more than 30% from $1.94 in 2001, according to the consulting firm (Beverage Marketing Corp.).”
“This month, PepsiCo Inc.’s Aquafina brand sold at some grocery stores for as little as $2.99 for a 24-pack of half-liter bottles — less than a penny an ounce and about half of its typical price.”
PROFITABLE?
“It isn’t clear whether beverage and bottling companies make any money on bottled water at these prices, beverage analysts say.”
“The bottling companies rely on single-serve bottles sold in vending machines and coolers for much of their profit margin on bottled water, but with those sales down, they are also struggling to make water profitable, (Bill Pecoriello, CEO of ConsumerEdge Research LLC) said.”
BOTTLED WATER SALES ARE DECLINING
“The price slashing comes as bottled-water sales are declining after more than a decade of blockbuster growth. For the year ended July 12, U.S. sales of bottled water dropped 6% to $7.6 billion, according to Chicago-based market-research firm Information Resources Inc., whose figures don’t include sales from Wal-Mart Stores Inc.”
“Coke and its bottlers are reluctant to slash prices for Dasani… Coke’s refusal to lower Dasani prices has come at a cost: The brand’s U.S. sales volume slid nearly 26% in grocery and other stores, excluding Wal-Mart, in the 12 weeks ended Aug. 8, according to a report by J.P. Morgan Chase & Co., which cited data from Nielsen Syndicate Market Data. Aquafina’s sales fell a less-steep 13.8% over the same period, helped by a 5% price cut. Sales of Poland Spring, owned by Nestlé, fell 8.9% while its prices sank 11.3%.”
LESS PLASTIC TO COUNTER CRITICISMS
“Coca-Cola Co., Pepsi and Nestlé Waters North America Inc., a unit of Swiss food giant Nestlé SA and America’s biggest bottled-water maker, have been reducing the amount of plastic in their bottles in response to public criticism. Pepsi’s ‘Eco-Fina’ half-liter bottle contains less than half the plastic of its 2002 half-liter bottle. Coke has promised to begin using a bottle made partly of plant-based materials late this year.”
COMPANIES EXPECT SALES TO RETURN
“Brandon Leck, director of Coca-Cola North America’s water brands, said the company expects bottled-water sales to improve with the economy.”
The full article is at http://online.wsj.com/article/SB125167502443470973.html%3f
To read about the Council of Canadians campaign against bottled water, please go to www.UnbottleIt.ca.
