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PepsiCo to disclose water supplier: tap

The labels on its Aquafina bottles will state that the content is from a public source.

July 27, 2007|From Reuters

NEW YORK — PepsiCo Inc. will spell out that its Aquafina bottled water is made with tap water, a concession to the growing environmental and political opposition to the bottled water industry.

According to Corporate Accountability International, a U.S. watchdog group, the world's No. 2 beverage company will include the words "public water source" on Aquafina labels.

"If this helps clarify the fact that the water originates from public sources, then it's a reasonable thing to do," said Michelle Naughton, a Pepsi-Cola North America spokeswoman.

Pepsi's Aquafina and Coca-Cola Co.'s Dasani are both made from purified water from public reservoirs, as opposed to Groupe Danone's Evian or Nestle's Poland Spring, so-called spring waters shipped from specific locations that the firms say have notably clean water.

Coca-Cola said it would start posting online information about the quality-control testing it performs on Dasani by the end of summer or early fall.

"Concerns about the bottled-water industry, and increasing corporate control of water, are growing across the country," said Gigi Kellett, director of the "Think Outside the Bottle" campaign, which encourages people to drink tap water.

San Francisco's mayor banned city employees from using city funds to buy bottled water when tap water was available. Ann Arbor, Mich., passed a resolution banning commercially bottled water at city events.

Critics charge that the bottled water industry adds plastic to landfills, uses too much energy by producing and shipping bottles across the world and undermines confidence in the safety and cleanliness of public water supplies, all while much of the world's population is without access to clean water.

But industry observers said such opposition was unlikely to drain U.S. sales of bottled water, which reached 2.6 billion cases in 2006, according to Beverage Digest. The industry newsletter estimated that U.S. consumers spent about $15 billion on bottled water last year.

"Consumers have an affection for bottled water. It's not an issue of taste or health, it's about convenience," the newsletter's publisher, John Sicher, said.

Dave Kolpak, a portfolio manager at Victory Capital Management, said the environmental objections would have little effect on the bottom line for Pepsi or Coke, although he acknowledged that it could slow the market's growth.

"Pepsi and Coke do not make a lot of profit" on bottled water, Kolpak said.

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