Nestlé is looking to sell a large part of its bottled water business, but finding a buyer may not be easy.
The low margins and other problems associated with its lower-end water products, like Poland Spring and Nestlé Pure Life, leave Nestlé looking to unload, according to the Wall Street Journal. The company is inclined to concentrate more on value-added products like sparkling and flavored waters.
Bottled water as a commodity product has had some long-standing problems. The category rode a wave over the last few decades as consumers switched from soft drinks, but as it has matured, growth has tapered off. Nestlé and other bottled-water giants, like Coca-Cola and PepsiCo, have faced criticism for depleting aquifers to pump water for bottling, for adding massive numbers of plastic bottles to waste streams, and generally for charging consumers for something that comes from taps at a much lower cost.
The U.S. brands being considered for sale, including Arrowhead, Deer Park, Ozarka, Ice Mountain and Zephyrhills in addition to Poland Springs, collectively have a 44% share of Nestlé’s overall water sales but have an operating margin of just 5%, the Journal reports.
Nestlé has made recent sales of non-core businesses, including Buitoni, its North American pasta business.
