Anheuser pushing Icelandic "carbon neutral" water

By Martinne Geller

NEW YORK, July 18 (Reuters) - As if bottled-water choices such as "artisanal," "spring," "mineral," and "filtered" were not enough, Anheuser-Busch Cos Inc. (BUD.N: Quote, Profile, Research, Stock Buzz) is adding one more: "carbon neutral."

The No. 1 U.S. beer maker said on Wednesday it had taken a 20 percent equity stake in the environmentally conscious maker of Icelandic Glacial spring water and plans to sell the water in the United States, starting in California, New York, New Jersey and Connecticut. It plans to go nationwide in 2008.

Terms of the deal were not disclosed.

The brand is already sold in some outlets of Target Corp. (TGT.N: Quote, Profile, Research, Stock Buzz), Whole Foods Market Inc. (WFMI.O: Quote, Profile, Research, Stock Buzz), and Wild Oats Markets Inc. OATS.O, but Icelandic Chairman Jon Olafsson said sales would pick up now that the King of Beers is involved.

"My dream is that we'll be one of the big players in five years," Olafsson told Reuters. "With another (partner) on board I believe it's achievable.

The U.S. bottled water market, worth almost $11 billion a year, is dominated by Danone (DANO.PA: Quote, Profile, Research, Stock Buzz), Nestle (NESN.VX: Quote, Profile, Research, Stock Buzz), Coca-Cola Co. (KO.N: Quote, Profile, Research, Stock Buzz) and PepsiCo Inc. (PEP.N: Quote, Profile, Research, Stock Buzz).

Icelandic Glacial's selling point is that the company has been certified as "carbon neutral," meaning it voluntarily offsets the carbon dioxide pollution it causes through actions such as planting trees.

"It's only fair that people know that when they buy our bottles they are buying something environmentally friendly and a lot of people are concerned about that," said Olafsson, who used to own several media outlets in Iceland.