Higher bottled water sales offsets lower demand for Coca-Cola Amatil sodas

Soft drinks have been blamed for a lot of things, ranging from reduced sperm count to obesity. Bottled drinks manufacturers, such as Coca-Cola Amatil (CCA), have felt the impact of the global health campaign to cut soda consumption in favor of healthier options.

The company reported on Friday that its net profit for the first half of 2016 increased by 7.8 percent to $198.2 million. Although CCA suffered from weaker soft drinks demand, it was compensated by higher bottled water sales, reports Sydney Morning Herald.

To boost sales of its bottled water, CCA introduced Peats Ridge Pure Springs, a value-priced water, and reduced the price of its Mt Franklin brand. The twin strategies allowed CCA to recover from market share it lost to competition such as Asahi/Schweppes and cheap private label water. The price cut was reflected by a 25 percent growth in value terms for Mt Franklin, while volume increased by 51 percent.

Volume of still drinks, including Mt Franklin and Monster Energy, went up 9.3 percent, reports AAP. Meanwhile, overall group revenue increased by 2.8 percent to $2.5 billion. CCA declared partially franked interim dividend of 21 cents a share.

Across Australian supermarkets, volumes of non-alcoholic beverages jumped 7 percent for January to June 2016. Carbonated soft drinks sales declined 3 percent, but sales of bottled water grew by 34 percent.

As consumers shy away from sugary soft drinks, CCA introduced smaller carbonate soft drink cans that are low or have zero calories soda such as Coke Life with stevia, and non-carbonated soft drinks such as Zico coconut water, FUZE tea and Barista Bros Double Espresso iced coffee.

VIDEO: Decline in soda sales making companies rethink strategies

Source: CBS Evening News