Bottled Water

2014 State of the Industry: Bottled water

Sparkling water aids bottled water recovery

July 11, 2014
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Consumers’ push for healthy beverage choices is matching up to sales numbers seen throughout the bottled water category, according to a report from Chicago-based Mintel. In the market research firm’s March report “Bottled Water and Cold Beverages Mixes,” it notes that although the category declined 6.6 percent in 2009, it saw slight recovery in 2010 and has continued on this upward trend.

One segment that has helped fuel the growth of the category is the sparkling and mineral water segment. Sales for the sub-category were up approximately 32 percent, totaling  $1.2 billion in the 52 weeks ending April 20 in U.S. multi-outlets, according to Information Resources Inc. (IRI), Chicago. With sparkling and mineral waters posting double-digit growth, its sales now are in line with jug/bulk still water with $1.2 billion but significantly behind convenience/PET still water with $9.3 billion.

“Sparkling came out real strong last year … but sparkling came out from a small base [and] still is very niche in the U.S.,” said Jonas Feliciano, beverage industry analyst for Chicago-based Euromonitor International in Beverage Industry’s October 2013 issue. “[The segment showed] really strong performance in 2012, mainly because of the positioning as a premium, healthy alternative to carbonates where people can still get their carbonated beverage but without the calories or maybe with natural flavors and that sort of thing.”

Sparkling Ice, a brand of Preston, Wash.-based TalkingRain Beverage Co., leads the segment, posting double-digit sales growth. The brand recently added to its Lemonade portfolio with Peach Lemonade and Mango Lemonade varieties.

This spring, Sundance Beverage Co., a division of National Beverage Corp., Ft. Lauderdale, Fla., launched Spree, a new line of all-natural, zero-calorie sparkling waters.

The sub-category also has seen more traction from other major players. Atlanta-based The Coca-Cola Co.’s glacéau fruitwater brand saw a four-digit sales increase in the 52 weeks ending April 20, and PepsiCo Inc., Purchase, N.Y., entered the segment last year with Aquafina FlavorSplash. The brand extension is available in Color Me Kiwi, Peelin’ Good and Berry Loco varieties.

Although the bottled water category was up 3 percent for the 52 weeks ending April 20, based on IRI data, convenience/PET still was roughly flat. Bottled water brands of Nestlé Waters North America, Stamford, Conn., account for roughly one-third of the segment with sales just shy of $3 billion, according to IRI data.

In its report, Mintel notes that com-petition from tap water and a drop in disposable personal income has affected the beverage industry as a whole. While sales for bottled water continued to grow in 2013, it was at a reduced margin from the 2010-2012 numbers, it reports.

However, health concerns remain front of mind as many private and public institutions have made consumer awareness of their eating and drinking choices a priority, the report adds.  “Innovative, healthy drinks that are also flavorful, functional and healthy are in demand,” the report states. “As a reduced[-calorie] or calorie-free product, bottled water has an edge and opportunity to meet these needs, particularly with developments in functionality and flavor profile.”

 One way brand owners are com-municating this is through the Drink Up campaign, a platform created by the Partnership for a Healthier America (PHA) that brings together public- and private-sector partners to encourage people of all ages to drink more water. With support from first lady Michelle Obama and actress Eva Longoria, the initiative also brings together  bottled water brands such as PepsiCo’s Aquafina, The Coca-Cola Co.’s Dasani, Hint Inc.’s Hint, Wat-aah!’s Wat-aah!, Beverly Hills Drink Co.’s Beverly Hills 9OH2O, Danone’s Evian Natural Spring Water, and Voss of Norway ASA’s Voss. These brands feature the Drink Up logo on products and promote the initiative through public events; print, digital, social and out-of-home media efforts; and funding.  

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