Tariman, Annadel L. February 14, 2011 Case Title: Competition in the Bottled Water Industry in 2006

Bottled water was among the world’s most attractive beverage categories. The growing popularity of bottled water in the United States was attributable to concerns over the safety of municipal drinking water, an increased focus on fitness and health, and the hectic on-the-go lifestyles of American consumers. Bottled water markets were dominated by food and beverage producers like Coca-Cola, PepsiCo, and Nestle. In 2006, competitive rivalry continued to ratchet upwards as sellers launched innovative product variations, lowered prices in developed markets, used strategic agreements to strengthen positions in established markets, and acquired smaller sellers to gain footholds in rapidly growing emerging markets.

Convenience and portability were two of a variety of reasons US consumers were increasingly attracted to bottled water. Bottled water consumers frequently claimed that drinking more water improved the appearance of their skin and gave them more energy. In 1993, consumers became concerned over the quality of drinking water because residents of Milwaukee, Wisconsin, became ill with flu-like symptoms and many died of waterbone bacterial infections. And during 1990s-2000s there were many reports of cases on municipal water contamination because many residents of Washington, D.C., became ill after the city’s water filtration process caused elevated levels of suspended materials in the water. Many consumers complain about the purity of municipal water because it’s tap water was centered on the chemical taste of tap water that resulted from treatment processes that include the use of chlorine and other chemicals such as fluoride. However, there are positive attributed to the chemical added to tap water, because chlorine was needed to kill any bacteria in the water and fluoride had contributed greatly to improved dental health. The FDA required bottled water producers to test at least weekly for the presence of bacteria and to test annually for inorganic... [continues]

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