Why Bottled Water Manufacturers Are Worried That People Are Drinking More Bottled Water
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As we've reported in the past, sales of bottled water will top that of soda in the very near future, likely by early 2017 if not sooner.
You'd think this would make the world's largest bottled water sellers happy. Instead, it's cause for great concern. Why?
Joseph Agnese, an S&P Global Market Intelligence analyst, told USA Today that consumers aren't very loyal to any particular brand of water. "In other words, water is water, and doesn't spark the same kind of heated debate that often comes up between lovers of Pepsi vs. Coke," the article explained.
The world's best-selling bottled water isn't Dasani (owned by Coca-Cola), Aquafina (PepsiCo), Poland Spring (Nestle), or any other major brand you can think of. Instead, it's the vague category dubbed "private label," the all-encompassing term for generic "store" brands.
This makes sense, of course: Water is water. It's supposed to be bland, basic, and essentially flavorless. Generally speaking, you don't want it to taste different or special. So why pay extra for some "special" brand? (Whether or not you should pay for bottled water at all, given tap H2O is nearly free and there are serious environmental questions raised concerning the practice of bottling, transporting, and selling water, is an entirely different discussion.)
Outside of the worries that consumers will increasingly turn to generic brands, big beverage manufacturers are concerned that the profit margins on bottled water are lower than soda. What's more, while bottled water sales are indeed rising—reportedly up 7% in 2014—the category will topple soda more quickly than expected because soda sales have been fizzling out.
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So bottled water manufacturers are upset that 1) consumers aren't particularly loyal to any brands and are likely to buy whatever water is available and cheap; and 2) when consumers are buying more water, they're buying less soda. And because soda is more profitable, the Coca-Colas and Pepsis of the world would really rather be selling you soda.