Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, March 12, 1992                   TAG: 9203120048
SECTION: BUSINESS                    PAGE: B-5   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY BUSINESS WRITER
DATELINE:                                 LENGTH: Medium

IS THAT PEPSI? SELLING BOTTLED WATER? UH . . .

Bottled water is now part of Pepsi-Cola Co.

Uh-HUH!

Pepsi's distribution contract to market Avalon water fulfills Pepsi's goal to be a "total beverage partner" to the consumer, said Michael K. Lorelli, president of Pepsi-Cola East in Somers, N.Y.

Pepsi already has Ocean Spray juices and Lipton ready-to-drink teas in what it calls its "beverage distribution portfolio."

Uh-HUH.

The contract agreed on this week gives new energy to the Richmond company that owns the Avalon trademark and has marketed the water for the past year. Pepsi said it plans to distribute perhaps a million cases of the water in 1992.

Without Pepsi, it would take "10 years to make a dent in the marketplace," said Salim Rayes, vice president of Loverseas Co., which owns the Avalon label.

Bottled waters make up 6 percent of total beverage sales in the U.S., but sales have been growing an average of 9.4 percent a year, Pepsi said. The company predicts that by 2010 three out of four American households will drink bottled water.

That will bring U.S. consumption to 5 billion gallons of bottled water, roughly equivalent to the amount of water that flows over Niagara Falls in about two hours, said a Pepsi spokeswoman.

Uh-HUH.

It's a tough market, said Rayes, because PEPSI-COLA CO. PHOTO Now, here's Avalon. once a consumer gets past the name brands - such as Evian, Quibell and Perrier - there's "no loyalty in bottled water."

"The others are sold by price," he said.

There also seems to be little loyalty at the water source.

Avalon is bottled by Naya Natural Spring Water Co. in Lachute, Quebec. And that means on Roanoke grocery store shelves, it is jostling jugs of Naya, which comes from the same natural spring that flows under the foothills of the Argenteuil Mountains.

Rayes said the companies all have "mutual" partners.

Uh-HUH.