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Bottling Up Our Water Crisis

The Ultimate Commodity Investment

Written by Keith Kohl
Posted June 14, 2016

Consider Coke, Pepsi, and Nestle.

What do you think about when you hear those names?

Soda, most likely. And chocolate, if not some other kind of delicious snack food.

But those sugary products are actually falling by the wayside for these iconic companies.

PepsiCo CEO Indra Nooyi recently stated that soda accounts for less than 25% of the company's global sales.

Coca-Cola's non-carbonated beverage sales have, conversely, become more than 25% of the entire sales portfolio.

What gives?

If you think about it, the answer is actually pretty clear...

Drink Up

Bottled water has become a $13 billion industry.

The three biggest sellers in the U.S. are our favorite sugary snack sellers above: Coke as Dasani, Pepsi as Aquafina, and Nestle as Deer Park.

Despite the irony, many are regulars of these brands for health reasons. The current First Lady Michelle Obama began the “Drink Up” campaign to encourage people to drink more water.

With slogans like “you are what you drink” and #H2OfCourse, the health craze took off in full.

Cutting calories isn't the only motivation one could have for drinking water over soda. It's also a social status marker.

Not only are you being healthy, but you're going to make sure the world knows about it.

But then you may be on the other end of the spectrum.

How many times have you heard — or thought yourself — that bottled water is just a scam? Who wants to spend all that extra money on water of all things?

I'll admit, I've done it myself. But in this case we're both missing the point.

This thinking implies there's another choice. And for many, there is: tap water can be hundreds of times cheaper... to those who have it.

But consider exactly how many people there are that don't have the luxury of water at home...

The Invisible Issue

Even in the U.S., more than 1.7 million people are without clean water.

Cities all around the U.S. deal with leaky or lead-leaching pipes that make the water dangerous or sometimes cut it off entirely.

It's not just Flint that's drinking lead on a daily basis; Baltimore and L.A. face the same predicament.

California's drought looks to be ending, yet the lower half of the state is still in “severe drought” territory.

And this is in a country where 99% of the population has access to improved water sources.

Just think about what that means for countries with even less infrastructure and technology.

A full one-third of the world still has no access to improved water sanitation. By 2025, the World Health Organization estimates that half of the world's population will be living in water-stressed areas, with access to little or no drinkable water.

Now there's something the world needs to know!

Unfortunately, avoiding this is going to be one hell of a fight. Check out this map from the International Water Management Institute:


You can see the places facing physical scarcity, when there's not enough water to go around, or economic scarcity, when there's no infrastructure in place to use the water they have.

And this doesn't take into account aging infrastructures that still work but are poisoning the users.

Don't let all that blue lull you into a false sense of security; our water crisis is already here, and it's here to stay...

Life Finds a Way

At this point, you probably won't be surprised when I tell you that our sugary snack providers above are profiting handsomely from the crisis.

Schools here in Baltimore have been paying for their own bottled water supply since 1992. And those pipes aren't fixing themselves anytime soon.

It's a massive problem with minimal attention being paid to it. And when no one else is looking, investors have a shot at big-time gains.

If Pepsi can make some extra cash on a crisis, why not us?

Here's the rub... we need to need to act fast if we really want to make the most of the situation.

The crisis is coming to a head, and soon all eyes will be on the best water stocks in the world.

Until next time,

Keith Kohl Signature

Keith Kohl

follow basic@KeithKohl1 on Twitter

A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.

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