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PepsiCo to enter premium water market with ‘Om’

July 26, 2013

NEW YORK (AP) — PepsiCo plans to jump into the premium bottled water market with a drink called Om, following the popularity of Coca-Cola’s Smartwater.

The soda and snack food company, which also makes Aquafina bottled water, plans to launch the line next year, according to the trade publication Beverage Digest. PepsiCo Inc. has so far been on the sidelines when it comes to the premium water segment, which includes brands such as Evian and Fiji.

A representative for PepsiCo, based in Purchase, New York, declined to comment or provide any details.

Coca-Cola and PepsiCo have been diversifying their drink portfolios as Americans cut back on soda. Bottled water in particular has been growing in popularity over the years, but the problem for companies is that the bulk cases of bottled water sold in supermarkets typically aren’t as profitable as other branded drinks.

Premium bottled waters are different, however, because people are willing to pay more for them. Whether there’s any difference in the quality of various bottled waters is up for debate. For example, Coca-Cola’s Smartwater and its cheaper Dasani water are both made from municipal sources, or tap water. But the Atlanta-based company says Smartwater, which comes in distinct cylindrical bottles, is purified differently.

Sales volume for Smartwater is up 16 percent for the first half of the year, according to Beverage Digest.

Notably, Coca-Cola and PepsiCo aren’t the biggest players in the bottled water category. That distinction goes to Nestle, which owns brands including Deer Park and Poland Spring, and has nearly a third of the market.

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