Dive Brief:
- Cott Corp.'s stock, shares of which have returned 60% this year, is topping returns from its biggest North American competitors, PepsiCo Inc. with 2.5% returned and Coca-Cola Co. with 2.8% lost. "That’s more than six times the average for North American beverage makers worth more than $500 million and second only to the 65 percent return for Coca-Cola Bottling Co., the largest independent bottler of Coke products in the U.S," according to Bloomberg.
- Part of Cott's success comes from its shift away from soda and toward bottled water and water delivery. Its high returns are also attributed to the company's recent acquisition of water home delivery supplier DS Services of America Inc., which works with 1.5 million homes and offices.
- Cott will take its bottled water strategy further in coming years as it invests "as much as $20 million in acquisitions of smaller water and coffee delivery services to expand its distribution," according to CEO Jerry Fowden.
Dive Insight:
The soda industry can't be pleased with this news as Cott's success exemplifies the increased stronghold bottled water is having over today's more health-conscious consumers. After a decade of falling sales, soda is prediced to be overtaken by the bottled water industry by about 1.3% this year. In 2014, bottled water sales increased 7.3% while soda suffered still more sales volume losses.
For soda companies to improve, finding ways to reformulate their ingredients, reformulate their brand, and/or acquire the companies who can help adjust their brand for them could help in appeasing consumers. Coca-Cola and PepsiCo have already done so to an extent, particularly in the ready-to-drink tea category, where PepsiCo currently reigns supreme. As the bottled water market continues to grow, it wouldn't be surprising to see soda companies invest in more bottled water, and even water delivery services, in the future as well to capitalize on this trend.