BIZMOLOGY — While carbonated soft drink sales in developed economies continue to decline, bottled water sales continue to pick up and could become the biggest nonalcoholic beverage category by 2015, according to a recent forecast from Canadean. Fueling the surge in packaged water sales is increasing demand from Asia, which already accounts for about a third of bottled water sales. Per-person consumption of bottled water in countries like the Philippines and Vietnam is well below the global average, which leaves a lot of room for growth. Meanwhile, packaged water sales in India are forecast to increase more than 20 percent a year.
Rising sales of bottled water, along with increased demand for functional drinks (sport drinks, vitamin water, and ready-to-drink teas), could help nonalcoholic beverage sales grow from $500 billion to $600 billion by 2015. Increasing consumer interest in those categories could be good news for manufacturers like Coca-Cola and PepsiCo, which are seeing their carbonated drinks sales slowly dissipate in the US and Western Europe. This could also be a positive trend for public health as carbonated soft drinks are widely believed to contribute to high obesity rates in many countries.
Along with the opportunities for growth, this trend could also present a number of challenges to the world’s beverage manufacturers. Water scarcity is a problem in many developing countries, which means beverage makers and regulators will likely need to work together in order to find the best way to use these resources in the most responsible manner. There is also the issue of waste created by all the additional beverage packaging needed to fulfill the increased demand. Coke, Pepsi, and other manufacturers are focused on reducing their use of plastics and innovating new biodegradable materials.