Bottled water soon to be most popular drink
Consumers picking more sparkling, still varieties over soda, juice, alcohol
Plain old water, nature’s original soft drink, is on the verge of breaking the country’s obsession with pop.
Bottled water has emerged as the drink of choice for a society that has opted to guzzle sweetened beverages. A new report from Beverage Marketing found bottledwater consumption grew 120% from 2000 to 2015.
That rapid rise has occurred as carbonated beverages have slowly fallen out of favor, going down 16% in the same time period. Increasing concerns over health impacts of high-sugar beverages and a general trend toward diets filled with more natural foods and drinks have helped push bottled water toward the top of the pack.
But it’s not just replacing carbonated beverages. Bottled water, both sparkling and still varieties, has become an alternative for juice, tap water and even alcoholic drinks, said Michael Bellas, CEO of Beverage Marketing.
Bottled water “is both a tap-water replacement and a refreshment beverage,” he says. “It was really one of the very first beverages to start to be consumed for health reasons.”
Bellas expects consumers to be drinking more water than pop by early 2017. Bottled-water consumption already exceeds that of tap water, according to Beverage Marketing.
Major beverage manufacturers such as Coca-Cola and PepsiCo have been shifting their portfolios away from carbonated beverages to capitalize on health and wellness trends while hedging against falling sales of pop. They have big stakes in bottled water. Pepsi owns Aquafina. Coke owns Smartwater and Dasani, two of the brands that helped it achieve a 7% increase in still-beverage volume in the first quarter this year. The two beverage giants don’t break out financial results of bottled-water sales.
Still, the fact that we’re increasingly quenching our thirst with water is not necessarily a welcome trend for major beverage companies. The problem: Customers are not nearly as loyal to water brands as they are to pop varieties, says Joseph Agnese, an equity analyst with S&P Global Market Intelligence. Or 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.
Bottled water also isn’t as profitable.
“The margins of the business and the loyalty issues make it not nearly as attractive as ... carbonated soft drinks,” Agnese says.
“(Bottled water) was really one of the very first beverages to start to be consumed for health reasons.” Michael Bellas, CEO of Beverage Marketing.