Tap water is fine for Alice Waters, who stopped selling bottled stuff last year at her environmentally conscious Chez Panisse restaurant in Berkeley, Calif. That could be bad news for Nestlé SA. Per-capita sales of the product in America will rise 6.3% this year and 3.6% in 2010, slowing from 8.9% last year, according to Euromonitor International Ltd. Operating profit growth at Nestlé’s water unit, whose 2006 sales of $8.7 billion were 10% of the Swiss company’s total, will shrink by half to 5% in 2008, UBS AG has forecast.

Beverage companies including Nestlé, Coca-Cola Co., and Pepsi-Co Inc. are also facing inroads from private labels in the $15 billion industry. The competition comes as religious groups and environmentalists say that bottling wastes energy and overtaxes landfills.

“All this energy to bottle water, carbonate it, put it in the glass, ship it, and truck it to our restaurant — it was such a waste,” the general manager of Chez Panisse, Mike Kossa-Rienzi, 43, said. The restaurant used to sell about 25,000 bottles a year. Now Chez Panisse filters and serves tap water in a glass carafe for free.

Shares of Nestlé, which bottles Poland Spring, rose 6.5 Swiss francs, or 1.4%, to 468.5 francs in Zurich and have lost 9.9% this year.

They’re forecast to gain 26% in the next 12 months, according to analyst forecasts compiled by Bloomberg. UBS’s forecast also assumes a drop in the dollar against the franc will erode the water unit’s profit.

Coca-Cola shares fell 3.2%to $58.79 at 4 p.m. in New York Stock Exchange composite trading. PepsiCo dropped 2.8% to $69.44.

Coca-Cola may advance 15% in the next 12 months and PepsiCo will probably gain 19%, analysts estimated.

American sales of soda, which still accounts for 67% of non-alcoholic drinks, have shrunk for three years, according to the industry journal Beverage Digest. Water accounted for 17% of non-alcoholic drinks sold in 2006, the most recently available figure, up from 8.3%in 2001.

“This growth can’t continue at this pace,” an analyst at Zuercher Kantonalbank with an “outperform” rating on Nestlé, Patrik Schwendimann, said. Criticism from environmentalists “could have some impact if it’s always in the headlines.”

A New York Times editorial last August contributed to objections. San Francisco in July banned spending of public funds on the product, and New York City is encouraging people to refill containers. Chicago this month imposed a 5-cents-a-bottle tax. Many restaurants in America still serve tap to guests, which is unusual in Europe.