Water: Supermarkets Account for 50+% of Volume.
Morgan Stanley Study Finds Low Brand Loyalty.

In four-channel water data, Nestlé brands collectively lead overall. However, in C-stores Pepsi's Aquafina holds top market share -- one-fourth of market -- and even leads total Nestlé combined brands. Data. Covers YTD through May 19; includes supermarkets, drug chains, mass merchandisers (excluding Wal-Mart) and C-stores. Table next page shows corporate shares and share changes in: combined four channels; supermarkets; C-stores. Data covers water in bottles of 1.5 liters and under; sometimes called PET segment.

Water: channel weight and growth. Supermarkets account for over half of water volume. Details: supermarkets 51.2%; mass merchandisers (MM) 28.4%; C-store chains 15.9%; and drug chains 4.5%. Note: data does not include club stores that sell "huge amounts" of water, says executive. Performance. PET segment volume grows +27.8% in YTD data across four channels. Supermarkets up +28.3%; MM up +33.7%; C-stores +18.2%; drug chains +33.7%. Slowdown in most recent four weeks. Though four-week data is notoriously limited snapshot, most recent shows slower growth. Overall four-channel water volume up +15.5%; supermarket up just +16.3.

Water's 'weak' brand loyalty. New study finds relatively low brand loyalty among bottled water consumers. According to survey of 1800 consumers age 14-64 conducted by Morgan Stanley's Bill Pecoriello, "brands play a weak role in the water category." Notes just 10% of consumers make bottled water choice because "it's my favorite brand." Compares to 37% for CSDs. Choosing water. Top-three attributes for choosing water: 1) "It rehydrates me." 2) "Great taste." 3) "Refreshing." Choosing CSDs. Top-three attributes for choosing CSD brand: 1) "Great taste." 2) "It's cold." 3) "It's my favorite brand." Price. Study also finds price more a factor for water than CSD. 38% cited "low price" as attribute when selecting water vs just 26% for CSDs.

Pricing and packages. Bottled water category is quickly expanding from single-serve to multi-packs. One executive cites prevalence of .5-liter six-packs in supermarkets and notes, "it's moving to 12-packs." Coke Consolidated introducing Fridge Pack for Dasani; new refrigerator accessible cardboard package from Riverwood contains twelve 12-oz PET bottles (photo). Several bottlers/executives report "word" that some Pepsi bottlers will soon be introducing 24-packs of .5-liter Aquafina at $4.99 promotional pricing.