The Water Dilemma
By JENNIFER ZEGLER
Will environmental issues dry up bottled water’s rise?
Bottled water has been making headlines lately. And not for new
high-priced, ultra-premium brands, but for fears that bottled water’s
popularity could impact the environment. Some are concerned that the
increased popularity of petroleum-based packaging is more often clogging
landfills than being recycled.
Additionally, bottled water made headlines this summer
when PepsiCo’s Aquafina brand responded to criticism regarding its
source by labeling its bottles as “From a municipal or public
Yet, consumers seem unaffected by the buzz. The
overall bottled water category, including convenience/PET still water, bulk
still and sparkling water, reported $5 billion in sales and nearly a 10
percent increase, according to Information Resources Inc., Chicago, for the
52 weeks ending Aug. 12, 2007. The convenience/ PET still water category
alone was up more than 13 percent.
While the category has grown, issues have attracted
public attention. The International Bottled Water Association, Alexandria,
Va., responded to the packaging criticism with full-page ads in The New
York Times and San
Francisco Chronicle. The ads explained the
benefits of water, how America’s on-the-go lifestyle has grown
bottled water and the need for recycling programs. The IBWA, which is a
founding member of the National Recycling Partnership, is collaborating to
create a national program to encourage recycling.
|Top 10 bottled waters|
|Brand||DOLLAR SALES||% change vs. prior year||Market Share||% change vs. prior year|
|NESTLé PURE LIFE||$113,328,000||51.7%||2.9||0.7%|
|Source: Information Resources Inc., Chicago, Total food, drug and mass merchandise outlets (excluding Wal-Mart) for the 52 weeks ending Aug. 12, 2007.|
“We also are taking steps to reduce PET and we
are committed to creating a comprehensive plan regarding our environmental
impact,” explains Joe Doss, president and chief executive officer of
the IBWA. “It shouldn’t just target bottled water because if
you look at plastic PET it’s just one-third of 1 percent of total
plastic in the waste stream.”
Others in the industry feel that PET is not the
problem, but rather a lack of recycling programs. Icelandic Glacial has
always strived to be a green company and finds the packaging issue to be a
problem beyond the bottled water industry, explains Jon Olafsson, chairman
and co-founder of Icelandic Water Holdings, Reykjavik, Iceland.
“PET is not the problem with plastic bottles;
it’s recycling,” Olafsson says. “People are attacking
bottled water companies, but there are not enough dedicated recycling
facilities. People want to recycle and we need to address that
Tom First, co-founder of O Beverages, Cambridge,
Mass., agrees, “In the bottled water industry, we all benefit from
consumers’ desire for portability,” he says. “The main
issue with PET is the amount of recycling that is available. Only well
below 30 percent of PET is ever recycled. We need to increase consumer
awareness of the need to recycle.
“We also need to look into plastic materials
that are more recyclable or biodegradable, but hearty enough,” First
continues. “Hopefully, over time we’ll use less and less
plastic and more and more natural materials.”
The identification of a product’s source has
resurrected the tap water vs. bottled water debate.
“Consumers are not uniformly replacing tap water
with bottled water,” IBWA’s Doss says. “We have survey
data that 75 percent of people who drink bottled water also drink tap
water, depending on the circumstances. Our competition is not tap water,
it’s juices, teas, etc.”
In July, PepsiCo decided to label its Aquafina
purified water brand as coming from a “public source.” Shortly
thereafter, Aquafina began a marketing campaign, which explains its
multi-step purification process. According to IBWA’s Doss, the FDA
requires bottled water sourced from municipal authorities to be labeled
only if it is not filtered.
Despite these issues, consumers still flock to bottled
water and have encouraged it to grow.
“The growth in the past 20 years can be
attributed to people overall becoming more conscious of health and trying
to eliminate or reduce their intake of calories, sugar, caffeine and the
concern for convenience,” Doss says.
A pure pour
Plain bottled water has its appeal with consumers who
are focused on the benefits of plain water and the convenience of portable
packaging. While new flavored and functional waters have been flooding the
marketplace, a majority of the brands on IRI’s list of top brands are
solely dedicated to bottled water in its pure form. Private label brands
take the top spot with nearly $612 million in sales this year.
But seven of the 15 brands ranked by IRI belong to
Nestlé Waters North America. This spring, the Greenwich, Conn.-based
company began rolling out its Eco-shape shape bottle. The half-liter
Eco-shape is reported to use 30 percent less plastic, weigh 15 percent less
and is estimated to save 65 million pounds of plastic resin compared to
typical bottled water packaging for the same size container. In addition,
the new bottle uses less paper because the label size was reduced, and the
company removed color from the cap to make it more recycling-friendly.
Nestlé Waters debuted the packaging with its Ozarka and Arrowhead
brands, and most recently introduced Nestlé Pure Life in Eco-shape
bottles. Pure Life also showed a 51.6 percent growth over last year’s
sales, according to IRI data.
Icelandic Glacial ranks environmental concerns as a
vital part of its business practice. Icelandic Glacial is a certified
Carbon Neutral product by the CarbonNeutral Co. The company also recently
broke ground on a state-of-the-art facility that will take its capacity to
200 million bottles per year. In addition to global goals, the products
will be distributed in the United States by Anheuser-Busch, which also has
joined as an equity partner.
Also leveraging packaging’s appeal is Kids Only
LLC, Westborough, Mass. The company partnered with famous names such as
Scooby-Doo, Bratz and Marvel Heroes to feature the icons on its bottled
water packaging. The purified water features colorful character packaging
aimed to get kids to drink more water.
“Our goal is to not only help parents encourage
their kids to drink more water, but also to help kids start to make healthy
choices,” said Ron Cohen, president of Kids Only LLC, in a statement.
“Kids Only Bottled Water lets kids enjoy their drink choice by
connecting with their favorite characters, so they will be more apt to
choose that healthy drink again in the future.”
Flavored and functional waters have been launched with increasing frequency. Whether it’s for variety
or necessity, consumers are attracted by the latest options in fruity
flavors and added benefits.
One of the pioneers of the enhanced water category,
Glaceau, had a big year. Its sale to Coca-Cola in May brought it expanded
distribution and attention, which may have encouraged the triple-digit
increases reported by Vitaminwater and Smartwater brands. Vitaminwater
introduced a new Lemon-Lime flavor formulated with electrolytes, as well as
‘XXX’ antioxidant variety this year. Within the
‘enhanced’ water field, the
Whitestone, N.Y.-based company is often referred to as a groundbreaker.
“[Glaceau’s Chief Executive Officer Darius
Bikoff] pretty much invented the term enhanced water, but it’s really
interesting that people look for functionality in beverages,” First
says. “They always have in beer, whisky and coffee, but Glaceau and
Red Bull were really at the front on the marketing campaign. Whether
it’s plain water with electrolytes, energy or antioxidants,
it’s amazing how focused customers are on function. And it’s
not just the 18 year olds, it’s the 55 year olds as well.”
After its introduction two years ago, O Beverages is
growing its business. Expanded consumer interest and distribution have
worked in favor of its O Water line, which is plain water sweetened with
fruit essence, and Infused line, which is sweetened with pure cane sugar.
Expansion is in the works as First hints at new flavors for both lines.
Also joining the category this year was Organic
WaterPlus by Healthy Hydration LLC, Englewood Cliffs, N.J. Available in
plain electrolyte-enhanced vapor distilled water, as well as a number of
flavors and formulations, the products are certified USDA Organic. The
flavor options combine functional benefits such as Passionfruit Citrus for
energy, Acai Berry for antioxidants and Dragonfruit Kiwi for vitamins.
Known for its quirky sodas, Seattle’s Jones Soda
branched out this year, unveiling its new 24C line. The vitamin-enhanced
water beverage was introduced in May, and more recently underwent a
packaging makeover. The new bright packaging matches the beverage’s
vibrant colors, which coincide with their flavors. Cranberry Apple, Peach
Mango and Berry Pomegranate are among the initial variations, which offer
500 percent of the daily recommended value of Vitamin C.
Designing with kids in mind was Wateroos by
Maddie’s Beverage Co. Inc., Belmont, Calif. Created by a mother,
Wateroos is packaged in juice box-style packaging and features no calories,
artificial sweeteners or flavors. The zeros on its nutrition panel are in
contrast to some kid-aimed flavored waters on the market, explains Roberta
Greenspan, founder of Maddie’s Beverage Co.
“There aren’t many waters that make a play
for kids and don’t have some degree of sweetener or sugar,”
Greenspan says. “We are pure water and we’re not hiding behind
that. There are some products on the market that have 18 grams of sugar, at
that point you’re not choosing water, you’re choosing a diluted
Greenspan says Wateroos is winning many fans among
parents searching for healthier beverage options for their children.
Wateroos’ plain water, Apple, Grape and Berry flavors are expanding
distribution through regional grocery chains. In order to spread the word
about the product in its new areas, Wateroos is working on a word-of-mouth
Kraft launched the functional formulas of its Fruit2O
brand in May. Organized by their benefits Hydration, Relax, Immunity and
Energy, the line has zero calories and is fortified. Relax features a
Tropical Fruit blend flavor with added hibiscus and chamomile.
Energy’s Raspberry flavor is boosted by B vitamins and caffeine. In
addition, the company still offers the full lineup of eight flavors of
The spring also saw the launch of Dasani Plus from
Coca-Cola. The zero-calorie line of vitamin-enhanced flavored waters
features three multi-functional flavors: Refresh + Revive in
Kiwi-Strawberry; Cleanse + Restore in Pomegranate Blackberry; and Defend +
Protect in Orange Tangerine. Each option is fortified with a unique blend
At PepsiCo, much is in the works for its functional
water brands. A new look is planned next year for PepsiCo’s Aquafina
Alive, which initially launched in January. The products still will be
available in Berry Pomegranate and Orange Lime flavors, and Lemon will
replace the Peach Mango flavor that is currently part of the lineup.
Planned for a 2008 launch, the reformulation will feature a new sweetener
and individual formulas, such as Energy and Immunity.
PepsiCo also announced it will re-launch a refreshed
version of SoBe Life Water. The new formula will be formulated with
sucrose, or table sugar, herbs and feature 30 percent fewer calories. Later
this year, the brand will roll out the new formulations in new 20-ounce
packaging with updated graphics for the line that includes Challenge Your
Life, Shield Your Life and Enlighten Your Life formulas.
IRI data reports PepsiCo’s Propel brand had $195
million in sales last year and its Propel Calcium showed 81.5 percent
growth over the past year. Capitalizing on the growth of its Propel line,
the company announced a new addition. Propel Invigorating Water features
20-mg. of caffeine, B vitamins and a low-calorie formula. The Strawberry,
Citrus and Berry flavors are planned for retail launch in early 2008, the
Offering its own “nutritionally enhanced water
product” is TrimWater from Lifestyle Beverage Co., Garden City, N.Y.
The product is low in sugar and calories and features glucosamine
hydrochloride for functional benefits, such as stabilizing blood sugar,
explains David Sackler, chief executive officer and founder of the company.
TrimWater recently added Blueberry Pomegranate to its lineup of flavors.
Hinting at extensions in the works, Sackler forecasts,
“I think we’ve only scratched the surface of what functional
waters could do. It’s a great part of