• Ad Age, Monday, October 8, 2007 12:15 PM

The $16 billion bottled water industry--dominated by industry giants such as Nestlé, Coke and Pepsi--is under siege. This summer produced a deluge of headlines about the environmental impact of plastic water bottles, and retail sales (excluding vending machines and Wal-Mart) grew only 9% this year compared with 16% in 2006.

Joe Doss, president of the International Bottled Water Association, says the bottled-water industry has been unfairly targeted. In August the association began a PR and advertising campaign to "bring balanced, positive and factual bottled-water information to consumers and community leaders." Individual bottlers are reducing the materials required for their bottles, which is known as light-weighting. Nestlé says it has been working on bottles made from renewable material for several years.

Calling manufacturers' recent moves "Band-Aids," Joe Pawlak, vice president of restaurant consultant Technomic, says: "We think this whole social-consciousness issue is here to stay." Reusable-bottle companies, meanwhile, are working to make their brands better-known; Nalgene is reaching out to the mass market for the first time.

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