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 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, Whole Foods Market Inc. WFMI.O, 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, Nestle NESN.VX, Coca-Cola Co. KO.N and PepsiCo Inc. PEP.N.
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.
The company hopes to cut its contribution to global warming at a time when the bottled water industry is coming under pressure from critics who say it depletes natural water sources, adds plastic to landfills and uses too much energy by producing and shipping bottles across the world.
Anheuser-Busch, whose Budweiser and Bud Light beers face intensifying competition, has been trying to diversify its business with several deals to sell vodka and energy drinks.
Anheuser’s shares ended on Wednesday down 32 cents, or less than 1 percent, at $50.00 on the New York Stock Exchange.
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