Are Coca-Cola (NYSE: KO) and Pepsi (NYSE: PEP) good long-term investments? What does the decline in bottled water sales mean for business? And is Fiji Water really "untouched by man"? I recently asked Motley Fool Income Investor advisor James Early.

Mac Greer: James, I know you're a health-conscious guy but that hasn't stopped you from recommending Coca-Cola stock AND Pepsi stock. What gives?

James Early: Soft drink companies may be pushing the boundaries of my ethical envelope, but from a business standpoint, their brands give them protected business models, high returns on equity, and rich dividends. So I can take the dividend Pepsi pays me and spend it at Whole Foods.

Greer: So who do you like more over the next five years: Coca-Cola or Pepsi?

Early: At the moment, both are fairly priced by my valuation model, but they're both great long-term performers, especially in a flat economy. What people don't realize about Pepsi is that somewhere around two-thirds of its revenue comes from foods -- Frito Lay, Quaker Oats, and a slew of related products -- so it's actually more closely related to a company like Kraft (NYSE: KFT) or Sara Lee (NYSE: SLE). With U.S. soft drink sales flat, it's good to know that both Pepsi and Coke are globally diversified, but given Pepsi's food exposure, I'd give it the edge when risk gets baked in.

Greer: Let's talk bottled water. According to new data from the Beverage Marketing Corporation, the volume of bottled water sold dropped by 2.5% in 2009 from 2008. I don't know about you, but I've cut back on bottled water and go with tap water whenever possible. What does the slowdown in bottled water sales in the U.S. market mean for Coca-Cola and Pepsi?

Early: Remember that if you're drinking Aquafina (Pepsi's No. 1 national water brand), Dasani, or Glaceau's Vitaminwater (Coke's brands), you're drinking water from the tap anyway. Business-wise, we've entered the Rise of the Generics in bottled water, which consumers are viewing more as a commodity. Coke and Pepsi aren't very specific about their sales, but they've invested heavily in bottled water as a growth engine. So it's a bad thing for them that generic share is growing. But for the planet, wouldn't we be better off if we just filtered tap water, rather than burn tons of fuel to ship (heavy) water in from places like Fiji and the Alps?

Greer: It amazes me that Fiji water is actually shipped from Fiji. What's next? Moon Pies that actually come from the moon? But I digress. Going forward, what's the big question for Coca-Cola and what's the big question for Pepsi?

Early: Worse, Fiji Water is owned by a Hollywood power couple, so it gets all the good movie placements, to boot. The big question for both Coke and Pepsi is if their bottler acquisitions will work out in the long term. Both companies have had a love-hate relationship with their lower-margin bottling companies, owning them at times, spinning them off at others. Now, they're back to owning them, and so far, so good. Fundamentally, Coke and Pepsi are marketing companies -- their products are nearly worthless (especially nutritionally) -- so they just need to advertise and grow shelf space. Owning the distributors might help, as both companies are now fighting for space with more diversified beverage lineups aimed at counteracting the fizzling out of the American soda market. In five more years, we'll know for sure.

Greer: Back to Fiji water for a minute. Go to the Fiji Water website and you'll find a picture of Fiji bottled water and the phrase "untouched by man." While I appreciate that no one is apparently swimming in Fiji's "artesian aquifer, located at the very edge of a primitive rainforest," the whole thing strikes me as absurd. It's like the pet rock, but not as fun.

Early: Fiji boasts that its water is "far from pollution, acid rain, and industrial waste," but considering that the water comes from a plant burning diesel fuel 24 hours a day, goes into plastic imported from China, gets trucked four hours through Fiji, and then makes a 5,500-mile journey on a petroleum-fueled vessel -- all before getting trucked to your local store -- I'd say the water is touched by man in the end, depending on your definition.

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Neither Mac Greer nor James Early owns any of the stocks discussed. Coca-Cola is a Motley Fool Inside Value recommendation. Whole Foods is a Motley Fool Stock Advisor pick. Coca-Cola and PepsiCo are Income Investor recommendations. Motley Fool Options has recommended a diagonal call position on PepsiCo. The Fool owns shares of Coca-Cola. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.