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In the next few years, bottled water will likely overtake carbonated soft drink sales. Surprisingly, that could be good news for soda giants — and bad news for consumers.
“Bottled water is the marketing trick of the century,” writes John Jewell in The Week.
Companies selling bottled water, he argues, have managed to convince Western consumers that buying water is a healthier choice than sugary soda.
However, the comparison is a case of false equivalence. Bottled water isn’t simply an alternative to soda — it’s an alternative to the much more inexpensive and eco-friendly tap water.
"The purchase of bottled water allows us to communicate our uniqueness and the care we have for bodies and the environment," writes Jewell.
This nutrition-minded and independent sense of self is exactly what soda giants like Pepsi and Coke are currently trying to tap into.
In 2014, the volumes of major water brands including Nestle’s Poland Spring, Coca-Cola’s Dasani, and PepsiCo’s Aquafina grew 7% to 9%. For comparison, Coke and Pepsi’s volumes fell close to 3% in the same time period.
Consumers’ thirst for bottled water is only growing — on Thursday, major European bottling company Coca-Cola Enterprises, Inc. reported that total water volume increased 12% in 2015.
“We’ve had some substantial investments in R&D that have allowed us to put out more new products,” Al Carey, CEO of PepsiCo Americas Beverages, said at Beverage Digest’s Future Smarts conference in December. “Not all of it is skewed toward healthy, but very much healthy and very much single serve.”
Bottled water’s manufactured status as the healthiest beverage around is exactly the reputation that Coke and Pepsi want to earn. In recent years, the company has been plagued by sugar-related concerns that drove soda sales down and negative headlines up.
However, while bottled water costs as much as 2,000 times as much as tap water, the beverage yields surprisingly low profit margins for companies. So, these beverage giants are not only investing in simple bottled tap water — the most straightforward marketing trick in existence — but also new, pricier takes on the classic H2O.
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In 2016, Pepsi is debuting new sparkling Aquafina flavored waters. The drinks will be the “official hydration sponsor of New York Fashion Week” this spring, a glitzy title that continues the elevation of the most basic beverage. At the same time, Coca-Cola is rolling out sparkling Smartwater, with actress Jennifer Aniston acting as spokesperson.
Bottled water is a $13 billion business that, logically, doesn’t need to exist.
Jewell sums up his piece on the industry saying that bottled water is a symbol of a “disposable culture” that values branding over the environment. Coke and Pepsi would likely disagree with that sentiment — but if there is one thing these soft drink giants can do, it is market a beverage.