BOTTLED WATER SALES DECREASED
Reality show star Kim Kardashian West showed her followers home in an Instagram post earlier this year. Kardashian's water-only fridge then caused bottled water sales to explode worldwide. According to the news in the Financial Times, this effect will not last long. People who closed their homes during the Corona virus outbreak received less bottles of water. Danone, the third largest player in the industry, predicts that third quarter water sales will drop by 30 percent.
There is another important factor in the sales of bottled water decreasing: Plastic… Published reports about environmental pollution caused by this substance have created awareness among people. The epidemic also helped people better understand the importance of the environment. Martin Deboo, analyst at Jefferies, said: “People are saying bottled water is the new tobacco. That’s the tenor of the debate.”
BOTTLED WATER HAS A LOW MARGIN
Although water is cheap, packaging and transportation costs are high. When price competition is added, a bottle of water in the US costs 20 cents.
According to Jefferies, the largest in the industry, Swiss Nestle provides a 10.5 percent operating margin from water. This is the lowest figure in all sectors in which the group operates. French Danone's margin is 13 percent. Danone CEO Emmanuel Faber, at a conference he attended in June, defending bottled water despite everything, said, “Pollution and the population will rise. The need for clean water will also increase. If you want absolutely pure water, you should find a way to bring it in an ecologically responsible way. ”
BOTTLED WATER IS SEEN AS 'DEVIL'
According to the experts, bottled waters started to be seen as "evil" in people's eyes with the increase of water scarcity. Danone achieved weak growth in the water section. "Performance in the water category is not what we want," said Coca Cola in October.
Investors put pressure on companies to do something about plastic. The industry's biggest, Nestle, Danone and Coca Cola, are working towards sustainability concerns. All three companies aim to use recycled plastic in 50 percent of bottled water by 2025. Some companies started selling their water in metal or cardboard boxes and bottles.