Competition in the Bottled Water Industry

Topics: Water, Drinking water, Water supply network Pages: 2 (384 words) Published: March 27, 2011
Bottled water was distributed to the large grocers and clubs directly by the producers whereas they use third parties like bear and wine distributors to make sales and deliveries to stores, restaurants & delis Coca-Cola and PepsiCo enjoyed the advantage of their vast distribution channels. It was easy for them to distribute Dasani and Aquafina with their deliveries of other beverage. They also negotiated contracts with sports stadium, universities, school systems. These two giants have exploited the popularity of their other branded products in persuading grocery accounts to purchase DASANI and AQUAFINA. They have to pay slotting fees beside offering lower price to the supermarket and discount stores sellers as these accounted for 43.5 percent of US industry sales. They also pay rebates of 25 cents per case to secure convenient space in the store. SUPPLIERS TO THE INDUSTRY

Suppliers are:
Municipal Water Systems, Spring Operators
PET (Polyethylene Terephthalate) & HDPE (High Density Polyethylene) manufacturer Plastic Caps, Label Printers, Secondary Packaging Suppliers
Bottled water was available from many sources
Larger buyers like Coca Cola and PepsiCo would have to give 5 cents per bottle whereas smaller buyers such as regional or local sellers would have to pay more than 15 cents per bottle. •Basic bottle-filling line at $125,000

Large state-of-the art bottling facility at more than $100 million •Spring Water System Equipments $300,000

Key Compititive Capabilities
Did not enjoy the brand loyalty of the soft drinks, beer, and many other food and beverage products Still 10 to 25 % consumer look for brands and this percentage is increasing day by day Global companies having vast global brand images became the major sellers Maximizing the number of deliveries per drive

On time delivery and responsive customer service
High utilization of large scale plants
Recent Trends
Offering discounts on 12 and 24...
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