Talk about him/her with other coworkers around the watercooler. Make sure it's just loud enough for that individual to hear...
J/K.
I believe escalation is the proper way to handle this. The problem with confrontation is that there are some people that will take it personally regardless of how well the message is delivered. And as sad as this sounds, it may negatively impact any future work relations. When a 3rd party such as a manager/human resources/personnel committee takes care of it, it provides anonymity for both the personal raising the complaint and the person in question. And it is the job of a functional manager to handle these issues. This is no different than handling ethical issues around the office. If an individual is acting unethically, you should never under any circumstances do personal policing, it should be reported.
We had a similar situation in our office with people playing soccer during lunch hours and not showering. It was sent out as a memo through our site committee and resolved without hurting anyone's feelings.
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