Coke Launches Carbonated Smartwater In Expanded Sparkling Water Push

By Mike Esterl 

Soda giant Coca-Cola Co. is wading deeper into the small but fast-growing sparkling water category as it tries to compete with popular brands like Perrier and LaCroix.

The maker of Coke, Sprite and Fanta said Wednesday it will begin selling a carbonated version of its smartwater brand this month in some restaurants, hotels and stores in New York City, Los Angeles and Miami. It plans a broader rollout next year.

The move follows a decadelong decline in U.S. sales volumes of traditional flavored sodas industrywide. Americans have been scaling back on regular soda amid obesity concerns. More recently they've been dropping diet soda to avoid artificial sweeteners.

But consumption of bottled water is rising rapidly--especially if it has bubbles. Although it remains a niche category, carbonated bottled water sales increased 10% to $786 million last year in the U.S., according to industry tracker Euromonitor International.

Coke and chief soda rivals PepsiCo Inc. and Dr Pepper Snapple Group Inc. have some catching up to do. Nestlé SA is the industry leader in carbonated bottled water, with four of the five top-selling brands in the U.S. last year, led by Perrier and S. Pellegrino. National Beverage Corp.'s LaCroix was the No. 3 brand, according to Euromonitor.

A PepsiCo spokeswoman said Wednesday the company plans to launch new flavored sparkling waters under its Aquafina brand in the U.S. next year, but declined to share more details. It recently stopped selling Aquafina FlavorSplash, a line of flavored sparkling waters it rolled out in 2013.

Dr Pepper Snapple said its unflavored Schweppes and Canada Dry sparkling waters are posting strong growth. The company also is broadening U.S. distribution of Penafiel, a Mexican sparkling water brand.

Coke's carbonated, unflavored smartwater will have a suggested retail price of $1.99 for a one-liter bottle, similar to its noncarbonated smartwater. Smartwater is one of Coke's fastest-growing brands with actress Jennifer Aniston as a pitchwoman. The company also has positioned it as a premium brand by adding electrolytes and likening its vapor-distilled purification to the formation of clouds.

Smartwater isn't Coke's first foray into sparkling water. The company launched flavored sparkling waters under its Dasani brand in late 2013 and sells unflavored Seagram's carbonated water. It plans to launch a carbonated version of its Minute Maid with 6% juice content early next year.

Write to Mike Esterl at [e-mail]

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(END) Dow Jones Newswires

November 18, 2015 17:27 ET (22:27 GMT)

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