Bottled Water Rages Fierce Amongst Beverages

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Feb 22, 2002
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The most brutal battle in the beverage industry is the one for dominance of bottled water, reports Fortune. With the niche growing at a 30 percent annual clip, bottled water will likely catapult ahead of coffee and beer to become the second-best-selling beverage — just behind soft drinks — by 2005. Currently bottled water is barely ahead of number-five milk. Consumers typically buy water in more expensive single-serve packages; for sodas, they wait for the six-packs to go on sale. And unlike Western Europeans, who gulp down 17 to 18 cases apiece on average, the average American drinks only ten cases of bottled water a year. That represents a lot of room for growth, especially if concerns about terrorism deter them from drinking from the tap.

Moderator Comment: As competition for share of the
bottled water category increases, do you expect to see a manufacturer price
war?

The appeal of the bottled water category for retailers
is its profitability. Recent announcements from Danone and others suggest that
manufacturers intend to hold the line on prices. How much lost market share
will it take before one of the companies decides a different strategy is required?
[George
Anderson – Moderator
]

Winning in the Water Fight – Fortune

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