INTERVIEW-Nestle US water exec sees growth, innovation

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By Martinne Geller

NEW YORK, Aug 21 (Reuters) - Nestle SA (NESN.VX: Quote, Profile, Research, Stock Buzz), the world's largest food company, expects U.S. volume growth of its bottled water brands to improve in the next few months as comparisons with last year become easier, an executive said on Tuesday.

Kim Jeffery, chief executive of Nestle Waters North America, said in an interview that sales of bottled water in the United States have shown signs of slowing, due to higher prices and cool summer weather across much of the country.

"This is the first time in seven years that pricing is not going down," Jeffery said, due in part to the high cost of raw materials and the lack of a price "war" like the one last year between PepsiCo Inc's (PEP.N: Quote, Profile, Research, Stock Buzz) Aquafina, Coca-Cola Co's (KO.N: Quote, Profile, Research, Stock Buzz) Dasani, and Nestle brands like Poland Spring, Nestle Pure Life, and Deer Park.

"There was a lot of competitive fire in the industry last year that is really not there this year," Jeffery said.

Sales of bottled water grew 11 percent in the first half of 2007, according to industry newsletter Beverage Digest, about half as fast as during the year-ago period. Beverage Digest counts "enhanced water" drinks like Coke's "vitaminwater" and Pepsi's SoBe Life Water as bottled waters.

"We start to go against some very easy comparisons in the last few months of the year," Jeffery said, noting that a lack of hurricanes last year failed to spur disaster-related demand for bottled water.