Bottled Water Wars In Mexico

The first thing anyone says when they hear someone is going to Mexico is usually "don't drink the water" or "beware of Montezuma's Revenge!"

. Yes, we all know about the issues with the quality of tap water in Mexico. They tell us to drink only bottle water, don't order cocktails with ice cubes, don't open your mouth in the shower, etc, etc. Even Mexicans don't drink the tap water. When they head out to a friend's for dinner, a bottle of water goes right along with them. So is it really any surprise that the bottled beverage industry in Mexico is a hotbed of competition?

Initially the bottling companies promoted soft drinks over bottled water. Addictive ingredients such as caffeine and sugar are part of the mix, after all, and it brings in more revenue. According to estimates from the Beverage Marketing Corporation (BMC), Mexicans drank 166 liters of carbonated beverages per person in 2010. That is more than any other nation in the world, including the US. The numbers indicate a massive profit potential for bottling companies - but not for long. The Mexican government has recently taken on an aggressive campaign to address child obesity, and has now banned the sale of carbonated beverages in schools (accounting for a huge chunk of sales).

The choice is clear: bottled water. Mexican's are a much larger consumer of bottled water than Americans, and in 2011 they drank 248 liters of the bottled stuff per capita, compared to a measly 110 liters consumed per capita by Americans (according to BMC). The current leader of the pack is Danone out of France with 26% of the market (according to Forbes). But Coca Cola and Pepsi are definitely battling for a larger share, as they currently hold 23% and 13% consecutively. Coca Cola and Danone are the main duelers for the market in the country, as Pepsi seems to have set other business goals in Mexico.

Danone is doing well with it's brand of water (Bonafort) as they are targeting health-conscious women and supplementing the government message of reducing obesity simultaneously. Ciel, is a brand of bottled water that Coca Cola is pushing hard in the marketplace however. They promote a children's line of bottled water, promote environmentalism and recycling, and use celebrity endorsements. Yet still, Bonafont is considered the high end brand.

Bottled water is big business in Mexico, and the contenders are fighting hard for their shares of the market. Price is the deciding factor for the locals because the competing companies aren't local to Mexico, so brand loyalty isn't an issue. When you head down south this summer, drink lots of bottled water and make your own assessment of which company is best. Or does it really matter?

by: Robert Nickel

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