Bottled Water on Track to Outsell Soda by 2017

NEW YORK — U.S. bottled water volume grew 7 percent last year, putting it on pace to outsell soda by 2017, according to Beverage Marketing Corp. forecasts. Retail sales of bottled water reached $18.82 billion last year, compared to $36.87 billion for soda sales, according to a Wall Street Journal report.

In particular, Nestlé SA's water brands, which include Pure Life and Poland Spring, outsold Dr Pepper Snapple Group's soda brands, making it the No. 3 nonalcoholic beverage company in the country.

The Coca-Cola Co. and PepsiCo Inc. still control approximately two-thirds of the higher-margin U.S. soda market, but while per-capita bottled water consumption jumped from 16.74 gallons to 34.2 gallons between 2000 and 2014, soda fell from 53.17 gallons to 39.92 gallons during the same time period.

While Coca-Cola owns the water brand Dasani and Pepsi owns Aquafina, water brings in fewer dollars as the wholesale price for a gallon of water fell from $1.63 to $1.23 over the last decade, while soda rose from $3.05 to $4.05.

"The philosophy is stack it high and sell it low,'' Bill Sipper, a beverage consultant at Cascadia Managing Brands, told the news outlet.

Environmental concerns are a strike against bottled water, with major national parks banning its sales and protestors speaking out against the use of California's water supply during an extended drought. Despite this, new bottled water brands continue to hit the market, with some attempting to set themselves apart through specialized filtering or the inclusion of vitamins.

Advertising for this beverage segment is also on the rise. While soda brands collectively spend much more on ads, bottled water brands spent an estimated $84.5 million last year, according to Kantar Media, and this year Fiji Water alone plans to spend $30 million on its first U.S. television campaign.