Is Environmentalism Killing Bottled Water, Or is it Just the Economy?

(MoneyWatch)  Bottled water hasn't been doing so well lately. Sales are still climbing, but it's not the double-digit growth the industry saw at its peak. However, as much as groups like Food & Water Watch would love to attribute this to "consumers wising up" about the wastefulness of using so many plastic bottles, the issue is clearly not that simple.

Soft drink sales are also down across the board, and restaurant customers probably aren't choosing tap water over Pepsi out of concern for the environment so much as out of concern for their pocketbooks. Furthermore, bottled water is taking some hits because of competition from various flavored or vitamin-enhanced waters, plus energy drinks, all of which create just as much bottle waste.

Still, environmentalism no doubt does play a role in the trend, especially with the growing number of restaurants, schools, religious groups and local governments banning or limiting the use of bottled water. And sales of water filters rose 16 percent for the first half of 2008, according to research firm Information Resources.

At any rate, the environmental backlash was enough to provoke Nestle Waters into launching a counter-campaign to defend its product. Unfortunately, they might have taken things too far when they called bottled water "the most environmentally responsible consumer product in the world." The company now faces a complaint in Canada under the Canadian Code of Advertising Standards.

Coke and Pepsi have also faced pressure from activists on the bottled water issue. But yesterday's Food & Water Watch post was disingenuous when it quoted PepsiCo CEO Indra Nooyi as saying that "revitalizing this [bottled water] business is a huge priority for us." The actual quote, from the Q3 earnings call, referred to carbonated soft drinks, not bottled water.