Bottled water is more popular than soda
- Bottled water consumption is expected to surpass soda for the first time this year, but consumers' declining interest in soda isn't the only reason.
- Lead contamination in the drinking water of Flint, MI; Washington, D.C.; and Newark, NJ, have raised concerns about the safety of tap water and reliability of American water infrastructure.
- Consumers have turned to bottled water as an alternative they deem to be safer, which has also boosted sales and consumption of the category in recent years.
Increased consumption of bottled water has its own concerns, namely environmental. Producing the bottle requires three times more water than what's ultimately contained inside of it, according to data from the Pacific Institute. And only about 30% of those plastic bottles are recycled, per estimates from the National Association for PET Container Resources.
Transparency also is key for bottled water makers. As with other ingredients, consumers will be curious where the manufacturer pumped the water from. This could be for safety reasons, but it could also be environmental, as Nestle has faced over the past year with a questioned permit to pump water out of the San Bernardino National Forest in California.
Still, bottled water offers something that soda doesn't: a better-for-you beverage that offers hydration without high amounts of sugar or high fructose corn syrup. But consumers still desire flavor and functionality from their beverages, so bottled water makers have innovated with flavored, sparkling and even caffeinated water.
And while soda makers are seeing their sales steadily decline, many of them are also the leading U.S. bottled water producers, so growth in that segment has offset many losses seen in soda. Dr Pepper Snapple's water category grew 25% in the latest reported quarter, led by strong growth in Bai Brands, Aguafiel and Fiji.