Bottled Water and Other Casualties of the Recession

Aug.12.09 | About: Nestle S.A. (NSRGY)

It looks like the bottled water industry is one of the casualties of the recession.

From the WSJ:

Nestle SA, the world’s largest food and beverage group, reported on Wednesday a 3% drop in its first-half profit as it missed sales forecasts and trimmed its outlook, according to MarketWatch.

The company’s weakest segment? Its water division, which is responsible for about 10% of the company’s total sales, and includes brands such as Perrier and San Pellegrino. Sales contracted about 3% in the division, the second straight period of decline.

Analysts say the drop is owed partly to growing environmental and health concerns about bottled water — and partly to the global recession, as cash-strapped consumers trade down to tap water.

To add insult to injury, it’s not just consumers that are cutting back, it’s disappearing from the corporate conference rooms as well.

I guess the bigger question this might pose is are we all cutting around the edges — eliminating the little indulgences — or are we going to truly adopt a simpler less luxury filled life? Items like bottled water would seem to become more or less habits, and when circumstances force us to abandon them, the usual result is that we find we really don’t miss them all that much. They really didn’t do much to enhance our life.

So, once that lesson is learned, do we continue to trim? Do we find that one less Coke a day is not that big a sacrifice? Is the comfortable couch that just looks well broken in, not shabby, going to work fine for a few more years? Do we discover that life without car payments makes the perfectly fine five-year-old car something to hold onto?

I suspect that the answers to these questions and many similar ones is going to be yes. In many respects we’re relearning lessons that our parents and grandparents tried to teach us. If those lessons stick, they will shape some rather large changes in the overall economy. As individuals, we might very well come out of this with some rather improved sets of values.