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Updated 02 October 2015

Tapwater bottled and sold

"Public Water Source" will appear on Pepsi's Aquafina water bottle labels to show it was sourced from a public reservoir.

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PepsiCo Inc. will spell out that its Aquafina bottled water is made with tap water, a concession to the growing environmental and political opposition to the bottled water industry.

According to Corporate Accountability International, a watchdog group in the United States, the world's second largest beverage company will include the words "Public Water Source" on Aquafina labels.

"If this helps clarify the fact that the water originates from public sources, then it's a reasonable thing to do," said Michelle Naughton, a Pepsi-Cola North America spokesperson.

Pepsi Chief Executive Indra Nooyi told Reuters earlier this week the company was considering such a move.

Pepsi and Coca-Cola both bottling tapwater

Pepsi's Aquafina and Coca-Cola Co's Dasani are both made from purified water sourced from public reservoirs, as opposed to Danone's Evian or Nestle's Poland Spring, so-called "spring waters," shipped from specific locations the companies say have notably clean water.

Coca-Cola Co. told Reuters it will start posting online information about the quality control testing it performs on Dasani within the next three months.

"Concerns about the bottled-water industry, and increasing corporate control of water, are growing across the country," said Gigi Kellett, director of the "Think Outside the Bottle" campaign, which aims to encourage people to drink tap water.

Bottled water restrictions in certain cities

San Francisco's mayor banned city employees from using city funds to buy bottled water when tap water is available. A city in Michigan, Ann Arbor, passed a resolution banning commercially bottled water at city events and Salt Lake City, Utah asked department heads to eliminate bottled water.

Critics charge the bottled water industry adds plastic to landfills, uses too much energy by producing and shipping bottles across the world and undermines confidence in the safety and cleanliness of public water supplies, all while much of the world's population is without access to clean water.

Americans spent $15 billion on bottled water last year

But industry observers said such opposition is unlikely to drain United States sales of bottled water, which reached 2.6 billion cases in 2006, according to Beverage Digest. The industry newsletter estimated that American consumers spent about US$15 billion on bottled water last year.

"Consumers have an affection for bottled water. It's not an issue of taste or health, it's about convenience," the newsletter's publisher, John Sicher, said. "Try walking up (New York City's) Third Avenue on a hot day and getting a glass of tap water."

Dave Kolpak, a portfolio manager at Victory Capital Management, said the environmental objections will have little impact on the bottom line for either Pepsi or Coke, though he admitted it could slow the market's growth rate.

"Pepsi and Coke do not make a lot of profit" on bottled water, said Kolpak, adding that people may talk about the issue, but will likely continue buying some bottled water. Victory Capital owns about 3 million shares of PepsiCo among its $62 billion under management. - ()

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