Are More People Turning on the Tap Than Opening Their Wallets?

After more than 10 years of growth, bottled-water sales are declining – the victim of a recessionary economy and increased environmental concerns over plastic containers, says an article in today’s Wall Street Journal.

According to the Journal, in the first quarter of 2009, “bottled-water brands sold for an average of $1.35 a gallon in the U.S., down more than 30% from $1.94 in 2001…. Some analysts predict the price of bottled water could fall even further by next summer.”

The major bottled-water manufacturers, including PepsiCo, Coca-Cola and Nestle, say that they are reducing the amount of plastics in their bottles, that they expect sales to pick back up once the economy is on more solid footing, and that lowered water prices are, in some cases, simply a strategy to drive more traffic into stores, the article notes.

Water isn’t the only beverage that is experiencing a price war. Coffee companies have been ratcheting up the battle for consumers’ hearts, minds and caffeine addictions ever since Starbucks entered the market in the early 1970s. The current recession has only increased the competition. Starbucks continues to adjust its business model – see the Journal’s recent Heard on the Street column — as does Dunkin’ Donuts, McDonalds and 7-Eleven, among others. For insights into how companies tried to corner the coffee market in earlier times, see an article in Knowledge at Wharton titled, “The Coffee Wars Heat Up: New Strategies to Jolt the Caffeine-Conscious Consumer. “