PepsiCo to Enter Premium Water Market

PepsiCo hasn’t admitted defeat, but it continues to build away from its flagship.

The soda giant will join the thriving premium water category, which has shined with higher price points and margins by marketing affordable luxury. According to Beverage Digest, PepsiCo will launch Om, a premium water, next year.

While PepsiCo already produces Aquafina, it hasn’t yet entered the successful premium water market, which features brands such as Evian, Fiji and VOSS. According to data from November 2011 to November 2012 compiled by Symphony IRI, a Chicago-based market research firm, still and sparkling premium waters increased volume by 8.6 percent and revenue by 10.6 percent.

The announcement follows a pointed interview with Nelson Peltz, the CEO and co-founder of Trian Partners, a New York-based investment firm that has invested approximately $1.4 billion in PepsiCo. Last week, Peltz encouraged PepsiCo to broaden its portfolio. While Peltz suggested moving more toward snacks, the decision to launch a premium water at least fulfills his desire for the company to focus less on CSDs.