Will PepsiCo Benefit from Its LIFEWTR Brand?

Expanding non-alcoholic beverage portfolio

In Part 1 of this series, we mentioned PepsiCo’s (PEP) launch of LIFEWTR—a premium bottled water brand. PepsiCo and its non-alcoholic beverage peers are expanding their non-carbonated beverage portfolio to cater to consumers’ growing need for healthier beverages.

Will PepsiCo Benefit from Its LIFEWTR Brand?

Bottled water

With the scheduled launch of LIFEWTR in February 2017, PepsiCo will be strengthening its position in the bottled water market. PepsiCo’s Aquafina brand enjoys considerable popularity in the bottled water category. Other leading bottled water brands are Dasani made by Coca-Cola (KO) and Nestlé Pure Life manufactured by Nestlé Waters North America—a business unit of Nestlé (NSRGY).

According to Beverage Marketing Corporation, the US bottled water volume grew 7.9% in 2015. The volumes of carbonated soft drinks, the largest liquid refreshment beverage category in the US, fell 1.5% in 2015. The top two categories in terms of volume growth in 2015 were ready-to-drink coffee and energy drinks with growth rates of 16.5% and 9.8%, respectively.

According to Beverage Marketing Corporation, the per capita consumption of bottled water rose 7.1% to 36.5 gallons in 2015—compared to growth rates of 6.4% in 2014 and 4.0% in 2013.

The rapid rise in bottled water consumption indicates consumers’ preference for sugarless and no-calorie drinks that provide hydration. The alleged ill-effects of soda, like obesity and diabetes, will likely move more consumers to purchase healthier non-soda options.

PepsiCo’s focus on bottled water and innovations in other healthier snack food and beverage options will improve its top line.

For more updates, visit Market Realist’s Nonalcoholic Beverages page.