First came the Cola Wars. Next, the Juice and Iced Tea Wars. Now beverage giants Coke and Pepsi are about to fight another beverage battle: the Water Wars. And the market may never be the same. The $4.3 billion bottled-water business has been divided among countless small regional players producing brands such as Alaska Ice Age Premium and McKenzie Mist. There are a handful of premium brands such as Evian and Perrier. But the biggest, Poland Spring, has only a 7.5% share. And with bottled-water consumption increasing 10% annually -triple the growth rate of the much larger but more mature soda business - it's a tempting market for both Coca-Cola Co. and PepsiCo Inc. Pepsi jumped in two years ago and its Aquafina brand has become one of the top 10 brands. Now Coke is taking the plunge. Dasani, which Coke plans to unveil on February 19, isn't the product of some newly discovered spring but municipal tap water that is purified and distributed by Coke bottlers. Coke says it plans to tiptoe into water "to be careful that we don't replace high-margin soft drinks with low-margin water," as CEO M. Douglas Investor has put it. But analysts nonetheless expect the Atlanta-based beverage giant's entry to cause massive shifts in the US water business. "Coke will be a big player - and fast," says Gary Hemphill, vice-president of Beverage Marketing Corp, a New York research firm.
Indeed, analysts predict that Coke's move will dramatically hasten the consolidation already occurring in the water business. At risk are Vermont Pure, Evian, Naya and the dozens of bottled-water makers that are currently distributed by Coke's vast network of bottlers. Naya, for instance, depends on Coke distributors for 60% of its sales. Also vulnerable are thousands of small regional players that can't match Coke's marketing tactics. Whispering Springs Inc., which only distributes its product within a 40-mile radius of its headquarters, has already felt Coke's power, says company president Rebecca Kelly. A Coke bottler who was distributing another Indiana water offered retailers a free cooler to stock the product, and merchants expected Kelly to do the same. "We couldn't afford that, so it costs us a couple of accounts," she says.. It's one thing to convince consumers that Coke's secret formula is unique, but it may have a harder time proving that its water is the real thing. And it could turn out that Coke's success as a purveyor of soda could give it an image problem among consumers who buy water as a healthy alternative to the fizzy sweet stuff. "When you think of Coke, you don't think of water," notes Stephen Monaco, beverage buyer for Peach Food Stores, a Massachusetts-based chain of 136 stores. Monaco has already dropped Aquafina. The Pepsi product, which like Dasani is treated local water, did not outsell a half-dozen other brands he stocked. He offered to keep selling Aquafina if he could stock it in the coolers the soda giant had provided. Pepsi refused; it didn't want to sacrifice cola space for water. For Coke and Pepsi, that's the dilemma how to give water a place on the shelves and in the grocery bags without displacing soda sales. But they have managed that trick with teas and juices And given the gusher of demand for water, Coke and Pepsi won't retreat.
IV. Определите, верны или неверны данные утверждения:
1. The demand for bottled-water is rising.
2. The market for bottled-water is growing but at a slower rate than the market for sodas.
3. In a short period of time Pepsi has been able to position Aquafina among he top brands of bottled-water in the US.
4. Aquafina and Dasani were launched on the market simultaneously.
5. Aquafina and Dasani are spring waters.
6. Companies can make more money from selling soda than from selling water.
7. The entry of Coke and Pepsi will probably mean that smaller companies
will have to change their distribution networks.
8. Most small bottled-water producers provide retailers with free coolers to
stock their products.
9. Some people may feel uncomfortable about buying bottled-water produced by Coke or by Pepsi.
10. The danger for Coke and Pepsi is that customers may buy their bottled waters instead of their colas.
V. Подготовьте устное высказывание по теме International Business Styles.
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