The future of Coke and Pepsi depends on the 'marketing trick of the century'

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As soda sales fall, Coke and Pepsi are looking to bottled water to boost business.

Bottled water sales have more than doubled in the US in the last 15 years, with Americans buying 11.7 billion gallons of the beverage in 2015.

However, critics are questioning if the apparently healthy adjustment is as positive as it seems.

"Whereas municipal water utilities must share their treatment methods and contaminant-testing results with consumers annually, bottled water companies are not required to disclose this information," Paul Pestano, Environmental Working Group's senior database analyst, told Men's Journal in August. "So with bottled water, we don't know what treatment or filtration techniques were used or what residual contaminants are still in the water."

In other words, while bottled water is often marketed as the better, safer option, companies do not have to share the same basic information that all tapped water suppliers do.

In fact, in a 2008 study, the EWG found 38 pollutants in 10 brands of bottled water. Two of the 10 brands tested were chemically indistinguishably from local tap water.

man drinking water bottleSmartwater

With such strong similarities between the two, why does anyone buy bottled water? The answer: great branding.

"Bottled water is the marketing trick of the century," John Jewell wrote in The Week in 2014.

Companies selling bottled water, he argues, have managed to convince people that buying water is a healthier choice than sugary soda.

RELATED: Coca-Cola through the years

18 PHOTOS
Coca-Cola through the years, Coke soda
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Coca-Cola through the years, Coke soda
The Atlanta based Coca-Cola Co., announced in New York Tuesday April 23, 1985 file photo a change in the 99 year old secret formula for the soft drink. This collection details the history of shapes of the soft drink's bottles. Sold at fountains in Atlanta at the start it was first bottled in Vicksburg, Mississippi. (AP Photo)
UNITED STATES - CIRCA 1950s: Teenaged girl with bottle of Coca-Cola. (Photo by George Marks/Retrofile/Getty Images)
(GERMANY OUT) *23.03.1912-16.06.1977+Physiker, Raketenforscher, D/USA- Porträt mit Coca-Cola-Flasche- 1963 (Photo by ullstein bild/ullstein bild via Getty Images)
The bottles of Coca-Cola are shown May 5, 1986. (AP Photo/Joe Holloway, Jr.)
FRANCE - MAY 01: Centenary of Coca-Cola In France In May, 1986. (Photo by Didier CONTANT/Gamma-Rapho via Getty Images)
The bottle used by Coca-Cola for export to France, stands by the prototype of the very first Coke bottle shown May 5, 1986 in Atlanta, Ga. (AP Photo/Joe Holloway, Jr.)
BOHOL, PHILIPPINES - 1988/01/01: A lemur clings to a coke bottle. . (Photo by Roland Neveu/LightRocket via Getty Images)
Bottles of Coca-Cola, Tab, and Sprite on the shelf of a grocery store in New York City, USA, September 1988. (Photo by Barbara Alper/Getty Images)
SAN FRANCISCO - JANUARY 16: Bottles of Coca-Cola are seen on the shelf at Tower Market January 16, 2004 in San Francisco, California. Coca-Cola is being investigated by U.S. regulators over allegations raised by a former employee that it had inflated its earnings. (Photo by Justin Sullivan/Getty Images)
SAN FRANCISCO - JANUARY 16: Cans of Coca-Cola are seen on the shelf at Tower Market January 16, 2004 in San Francisco, California. Coca-Cola is being investigated by U.S. regulators over allegations raised by a former employee that it had inflated its earnings. (Photo by Justin Sullivan/Getty Images)
UNITED STATES - OCTOBER 20: Bottles of Coca-Cola and Diet Coke are displayed on a shelf in an Associated Supermarket in New York Thursday, October 20, 2005. Coca-Cola Co. said third-quarter profit surged 37 percent, the biggest gain in more than a year, as sales rebounded in the U.S. and demand for Powerade sports (Photo by Ramin Talaie/Bloomberg via Getty Images)
PARK RIDGE, IL - NOVEMBER 07: 2-Liter bottles of Vanilla Coke as seen in a grocery store November 7, 2005 in Park Ridge, Illinois. Atlanta-based Coca-Cola Co. has said it plans to discontinue its Vanilla Coke in the US by the end of the year. (Photo by Tim Boyle/Getty Images)
NEW YORK - FEBRUARY 19: A general view of the new aluminum Coca-Cola bottle at Mercedes Benz Fashion Week Fall 2009 Collections at Bryant Park on February 19, 2009 in New York City (Photo by Donald Bowers/Getty Images for The Coca Cola Company)
Bottles of Coca-Cola Co.'s Coke brand soda sit on a shelf behind the bar at Smith & Wollensky in New York, U.S., on Monday, Feb. 22, 2010. Coca-Cola Co., the world's biggest soda maker, agreed to buy the North American operations of bottler Coca-Cola Enterprises Inc., more than six months after PepsiCo Inc. moved to bring its bottlers in-house to cut costs. Photographer: Daniel Acker/Bloomberg via Getty Images
A Coca-Cola bottle is displayed during a preview of the High Museum's new exhibit, "The Coca-Cola Bottle: An American Icon at 100", Wednesday, Feb. 25, 2015, in Atlanta. The exhibit, opening Feb. 28, explores the iconic design and creative legacy of the familiar soda bottle as art. (AP Photo/Branden Camp)
A piece by artist Andy Warhol, left, is displayed next to a case of Coca-Cola bottles at the High Museum's new exhibit, "The Coca-Cola Bottle: An American Icon at 100", Wednesday, Feb. 25, 2015, in Atlanta. The exhibit, opening Feb. 28, explores the iconic design and creative legacy of the familiar soda bottle as art. (AP Photo/Branden Camp)
LONDON, ENGLAND - MARCH 19: Rita Ora attends photocall to celebrates 100 years of the Coca-Cola Contour Bottle at the Coca-Cola Contour Centenary Bar on March 19, 2015 in London, England. (Photo by Mike Marsland/WireImage)
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But the truth is, the comparison is a case of false equivalence. Bottled water isn't simply an alternative to soda — it's an alternative to the much more inexpensive and eco-friendly tap water. By buying bottled water, consumers aim to establish themselves as savvy and health-conscious, even though they could simply drink a glass of tap water that is 2,000 times less expensive.

This nutrition-minded and independent customer is exactly who soda giants like Pepsi and Coke are currently trying to attract as they grow their bottled water businesses. And, it's working.

Water is one of the hottest beverages in the nonalcoholic-drink market, with consumption of water brands Dasani, Aquafina, and Poland Springs all increasing in volume from 6.5% to 11.4% in 2015. For comparison, the amount of Coca-Cola consumed by Americans dropped 1% by volume, while consumption of Pepsi dropped 3.2%.

water bottlesSmartwater

As a result, Coca-Cola and Pepsi are looking to drinks outside of their namesake beverages to grow sales.

PepsiCo CEO Indra Nooyi said in April that less than 25% of the company's global sales are from soda. Rather, the company is focusing on healthy snacks and noncarbonated beverages — a process the company calls "future-proofing."

Similarly, Coca-Cola's "still" beverages such as tea, juice, and bottled water are growing sales by volume as soda shrinks.

"Since 2000, we've increased our business from about 10% of our volume coming from still beverages to almost 30% today," COO James Quincey said in a Q&A in July.

Bottled water is a $13 billion business that, logically, doesn't need to exist. It is also an industry that won't stop growing. As Americans turn away from soda, it is exactly the kind of beverage companies like Pepsi and Coke need in their portfolio.

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