BOTTLED WATER VOLUME SURPASSES BEER, MILK, COFFEE 2004-04-26 (2)

JON SPRINGER

NEW YORK -- Bottled water volume in the U.S. increased by 7.5% during 2003, and its total category volume now exceeds that of beer, milk and coffee, according to the Beverage Marketing Corp.

Bottled water today trails only carbonated soft drinks among all beverages consumed in America, said BMC, which will publish its findings in a new report. Soft drinks still have more than twice the volume sales and average intake of bottled water, but consumption has dipped slightly for several years, while water consumption per capita has been gaining at a rate of around a gallon annually for five years.

Total U.S. category volume approached 6.4 billion gallons in 2003. Its growth came on top of a 10.8% increase a year earlier. During the five-year period from 1998 to 2003, bottled water's compound annual growth rate was 9.1%. Similarly sized milk, beer and coffee markets remained fairly steady over the same period, BMC said.

Per capita consumption of bottled water reached 22.6 gallons in 2003, up from 21.2 gallons a year ago. Wholesale dollar sales surpassed $8.3 billion in 2003, but did not grow as quickly as volume, reflecting the impact of price promotions during the year. The report noted that price promotions were once a West Coast marketing practice, but has since spread to the rest of the United States.

Single-serve packages of domestic non-sparkling water drove most of the growth, with brands from Nestle Waters North America, Coca-Cola and Pepsi Cola combining to claim 58% of the overall market. Pepsi's Aquafina was the largest-selling single brand, accounting for sales of $936 million and 11.3% of the overall market. Nestle Waters, which makes three of the nation's top five brands -- Poland Spring, Arrowhead and Deer Park -- remained the largest bottled water company in the United States, with sales of nearly $2.7 billion in 2003.

LEADING BOTTLED WATER BRANDS

Wholesale Dollar Sales, Share & Growth, 2002-2003

Millions of Dollars: Share of Sales: Percent Change

Brands: 2002: 2003: 2002: 2003: 2002-03

Aquafina: $838.0; $936.0; 10.8%; 11.3%; 11.7%

Dasani: 765.0; 834.0; 9.8%; 10.0%; 9.0%

Poland Spring: 621.5; 649.4; 8.0%; 7.8%; 4.5%

Arrowhead: 456.4; 546.1; 5.9%; 6.6%; 19.6%

Deer Park: 311.1; 356.5; 4.0%; 4.3%; 14.6%

Crystal Geyse: 270.0; 335.0; 3.5%; 4.0%; 24.1%

Ozarka: 209.6; 236.1; 2.7%; 2.8%; 12.6%

Zephyrhills: 202.1; 215.2; 2.6%; 2.6%; 6.5%

Ice Mountain: 166.3; 206.7; 2.1%; 2.5%; 24.3%

Evian: 191.1; 145.0; 2.5%; 1.7%; -24.1%

Source: Beverage Marketing Corp.