GREENWICH, Conn. -- Nestle Waters North America Inc. raised prices on its bottled water nearly 10% last month, the first increase after almost a decade of prices falling, Kim Jeffery, the company's president and CEO, said Tuesday in an interview with Dow Jones.
Nestle Waters initiated the price increases due to the cost of plastic used to make bottles rising more than 40% since October, Jeffery said on the sidelines of the Beverage Forum conference in New York. Bottled water prices have fallen about 35% in the last decade due to increasing competition.
Nestle Waters [image-nocss] North America, part of Nestle SA, is the largest bottled water company in North America with $4.2 billion in 2010 sales. Its brands, which include Nestle Pure Life, Poland Spring and S. Pellegrino, compete with water brands like PepsiCo Inc.'s Aquafina and Coca-Cola Co.'s Dasani.
Nestle Waters also vies for market share with the broader beverage category. Jeffery said bottled water sales should continue to grow in the United States as consumers shift away from sugary sodas.
In some U.S. markets, bottled water is outselling sodas in supermarkets, the company said.
"The U.S. is the only developed country where [sodas] outsell bottled water," Jeffery told Dow Jones. "That would suggest that bottled water still has room to grow."
Nestle Waters' sales volume rose 6.5% in 2010, with growth in its lower-priced Pure Life brands, regional brands like Poland Spring and in premium brands. Jeffery said the company is putting more focus on expanding the distribution of the higher-end brands like Perrier.
"We're working very hard on them right now," he said.
Nestle Waters is also branching out a bit from waters, said the report. This month, it bought the Sweet Leaf Tea Co., which makes the regional iced tea brands Sweet Leaf and Tradewinds. Combined, the brands had $53 million in 2010 sales.
Jeffery would not comment on possible future acquisitions, but said the company is interested in building sales of iced tea, which, like bottled water, is deemed healthier than sodas.
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