Consumers ditch bottled water and tap into free drink

By Jenny Wiggins in London
Published: September 14 2008 23:29

The ubiquitous plastic water bottle, long the bane of environmental campaigners, is being ditched by consumers in the US and Europe as incomes slump and people return to the tap for a free drink.
Sales of the world’s best known brands, including Aquafina and Volvic, have been tumbling in some countries as weakening economies take a toll on household incomes and consumers become more concerned about the environmental impact of throwing away the plastic packaging of a liquid that can be drunk for free.
In the US, where people drink more bottled water than any other country, supermarket sales are running at their slowest rate since bottled water started becoming popular a decade ago.
Total sales volumes are up only 1 per cent this year (including recently popular water brands such as Glaceau, which are “enhanced” with vitamins and fruit infusions), according to US soft drinks newsletter, Beverage Digest.
This compares with growth of 11 per cent over the same period last year, and more than 21 per cent in 2006.
“The bottled water industry has slowed dramatically this year,” said John Sicher, editor of Beverage Digest. “With the challenging economy for many consumers there’s been some increase in tap water and some trading down to less expensive beverages [such as supermarket own-label water brands].”
PepsiCo’s Aquafina brand has had a particularly bad year in the US, with supermarket sales volumes down 12.7 per cent year to date.
In the UK, sales volumes have slid 4.7 per cent and sales revenues have fallen 5.1 per cent in the 12 months to mid-August, according to research group Nielsen. This includes a 2.5 per cent drop in sales volumes of Evian, and a 7.4 per cent drop in sales volumes of Volvic.
The slump in bottled water sales, which are worth some €70bn ($99.5bn) annually, is hurting revenues at owners of the world’s biggest brands.,
At Danone, where brands such as Evian, Volvic, and Aqua contribute one-third of total group sales, revenues from bottled water dropped 0.8 per cent in the second quarter to €1.1m.
At Nestlé, where brands including Vittel, Perrier and Poland Spring contribute 10 per cent or SFr4.9m ($4.4m) to group sales, revenues dropped 1.1 per cent in the first half of the year.
Copyright The Financial Times Limited 2008