Nestlé aims to exploit growing health concerns about carbonated soft drinks as it rolls out new products and boosts investment in the huge US market to improve the profitability of its global water business.
It is launching more flavoured versions of its sparkling waters – including a green-apple flavour for Perrier and a cherry-lemon flavor for Poland Spring – to capitalise on growing consumer wariness toward both sugary and diet drinks.
Many of its new products will be sold in redesigned slim cans aimed at freshening the brand.
In the US, Nestlé will build seven production lines this year and invest as much as $US200 million.
The new production capacity is roughly twice what the company has added in the past five years combined.
Sales of water have grown rapidly and could overtake carbonated soft drinks in the US by volume by 2017, the Beverage Marketing Corporation says.
“Consumers want bubbles,” Nestlé Waters chief executive Marco Settembri says of people who have given up soft drinks. “But they want healthy bubbles.”
The water business generates 8% of Nestlé’s overall sales of 91.6 billion Swiss francs ($US95.38 billion). It is also a bedrock component of Nestlé’s push into health and wellness, which has led the company to remove artificial colouring in the US from Crunch and Butterfinger bars.
Nestlé’s sparkling water business, which includes San Pellegrino, represents a growing opportunity. In 2014, this segment grew 14% in the US, much faster than the 8% growth for its still waters
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