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Bottled Water Persists as the Fastest Moving Major Category

NEW YORK - U.S. bottled water volume and dollar sales increased even more vigorously last year than they did in 2000, according to new data from New York-based Beverage Marketing Corporation.

The volume of bottled water in 2001 swelled to more than 5.4 billion gallons, an increase of 10.6 percent over 2000 - significantly higher than in 2000 but slightly behind the growth recorded in 1999. Wholesale dollars increased even more dramatically, advancing by 11.5 percent to nearly $6.5 billion in 2001. One year earlier, sales grew by 9.3 percent, down from 13.9 percent in 1999.

Since the mid-1990s, producers' revenues have consistently increased more quickly than gallonage, reflecting the particularly strong showing of the retail PET segment comprised of water in 1.5-liter and smaller clear plastic bottles, the data shows. High-margin single-serve packages have enjoyed exceptionally high growth, maintaining solid double-digit rates over the course of a decade. The segment's share of the bottled water market has increased from less than one-tenth in the early 1990s to approximately one-third of total volume in 2001, when volume enlarged by 30 percent. Michael Bellas, Beverage Marketing's chairman, has dubbed PET water "the perfect beverage category" because of its unparalleled performance.

Per capita consumption of bottled water has been growing by about one gallon annually -- more than doubling in a decade. In 1991, the U.S. absorbed the equivalent of 9.3 gallons for each resident. By 2001, per capita bottled water consumption approached 20 gallons.

Perrier Group of America (PGA) and Danone Waters of North America (DWNA) stand as the largest bottled water purveyors in the U.S. In 2001, PGA's wholesale dollar sales increased by 23.5 percent, surpassing $2 billion. Its sales have more than doubled over the course of five years. Its share of U.S. bottled water sales increased from roughly one-quarter in 1996 to nearly one-third by 2001.

While DWNA's growth slowed considerably in 2001, its sales of nearly $880 million were sufficient for it to retain its number-two position. While its 13.6 percent share of sales stood significantly higher than it was five years earlier, it was a notable decline from 2000, when it claimed a 14.7 percent market share.

Pepsi-Cola and Coca-Cola have become the third and fourth largest bottled water companies, respectively, when measured by dollar sales. Pepsi and Coke have gone from owning no U.S. bottled water brands just a few years ago to holding the two best-selling brands with respective shares of 10 percent and 8.6 percent in 2001. They have pulled off this feat even though they are active in just one segment of the diverse bottled water industry -- the retail premium PET segment. Wholesale dollar sales of Aquafina reached $645 million in 2001. Sales of Coke's Dasani have more than doubled each year since its introduction in 1999, and its wholesale dollars totaled approximately $560 million in 2001.
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