American drinks producer PepsiCo wants to launch a new brand of premium bottled water next year, to compete with eternal rival Coca-Cola's Smartwater. The new product will get the name Om and is aimed at getting PepsiCo a higher margin.
Move onto attractive premium market
The American group is already active on the water market with Aquafina, which is aimed at the broad centre of the market, but that entails lower prices and lower margins. PepsiCo does not yet own a premium brand such as Evian or Perrier.
The premium market is very attractive though: according to research institute Symphony IRI the American market of sparkling and non-sparkling elite waters has grown by 8.6% in volume and 10.6% in sales. There has also been a lot of pressure on the classic sugary drinks of late as the war on obesity is going to the next level in the US and a lot of consumers are (partly) switching to other drinks.
Rival Coca-Cola is already active on the water market with the cheap brand Dasani and the more expensive Smartwater. According to Beverage Digest, which published the news about the new premium water of PepsiCo, sales of Smartwater grew 16% during the first half of 2013, when compared to the previous year.