As consumers continue their quest to consume more better-for-you beverage options, bottled water continues to widen its gap over carbonated soft drinks (CSDs) as the hydration category ranked at the top of beverage sales by volume in the United States for the third straight year, says Gary Hemphill, managing director of research at New York-based Beverage Marketing Corporation (BMC). To quench consumers’ thirst for healthy hydration, more value-added waters, flavors and innovative choices are hitting store shelves.

While bottled water growth further enlarged in 2018, albeit at a slower rate than in 2017, the bottled water category shows no signs of slowing down. “Total bottled water grew from 13.2 billion gallons in 2017 to 13.8 billion gallons in 2018, an increase of almost 5 percent (compared to more than 6 percent in 2017),” according to BMC’s August “Bottled Water in the U.S. Through 2023” report.

Except for two relatively small declines in 2008 and 2009, when most beverage categories contracted, bottled water volume grew every year from 1977 to 2018, the report says. During a span of 40 years, bottled water maintained 17 double-digit annual volume growth spurts, while at the turn of the century, per capita soft drink consumption regularly exceeded 50 gallons, it states.

Also touting the consistent strong performance of packaged water, which encompasses still water, enhanced water, sparkling water and jug/bulk serve water, Caleb Bryant, associate director of food and drink at Chicago-based Mintel, notes that packaged water sales reached an estimated $18.9 billion in 2018. And the future remains bright, with the market research firm forecasting sales of $24.4 billion by 2023, representing a 29 percent growth from 2018.


A go-to drink

Chicago-based Euromonitor International’s Passport report also notes the steady growth of the still and carbonated water segments, with sales of $17.1 billion in 2013 and $22.1 billion in 2018, a compound annual growth rate (CAGR) of 29.4 percent between 2013-2018, it states.

Bottled water leads off-trade volume sales of CSDs as consumers’ search for healthier, less sugary beverages, states Euromonitor’s March “Bottled Water in the US” report. “[B]ottled water has evolved in the U.S., going from a product that used to be enjoyed on limited occasions to one that is consumed throughout the day on a variety of occasions,” it states. “As bottled water shows continuous growth while other soft drinks categories are in serious decline, an increasing number of new product developments in juice and carbonates are taking inspiration from bottled water by positioning themselves in a manner similar to bottled water.”

Mintel’s Bryant also highlights the growth of the bottled water category. “The packaged water market is thriving thanks to consumer interest in health, product innovation from water brands and the surge in popularity of sparkling waters,” he says. “The popularity of functional waters is one of the most important trends within the larger product market.”

Convenience/PET still bottled waters had sales of $12.5 billion in total U.S. multi-outlets including convenience stores, a 3.6 percent increase for the 52 weeks ending Aug. 11, according to data from Chicago-based Information Resources Inc. (IRI). From a smaller base, IRI reports that seltzer/sparkling/mineral bottled waters grew 13.1 percent and generated dollar sales of $3.1 billion for that same time period.

Top convenience/PET still bottled waters

(Individual brands)

Private label $3,061,128,163 9.9 24.4 1.4
Aquafina $1,057,332,840 -0.7 8.4 -0.4
Dasani $1,054,584,636 -2.9 8.4 -0.6
Glacéau smartwater $837,596,197 1.2 6.7 -0.2
Nestlé Pure Life $749,713,884 -12.7 6.0 -1.1
Poland Spring $710,287,855 2.1 5.7 -0.1
Glacéau vitaminwater $489,035,681 -1.5 3.9 -0.2
Deer Park $429,825,063 3.5 3.4 0.0
FIJI $405,765,204 -13.7 3.2 -0.6
Ozarka $389,360,297 -0.4 3.1 -0.1
Category total* $12,522,156,781 3.6 100.0

*Includes brands not listed.

Source: Information Resources Inc. (IRI), Chicago. Total U.S. supermarkets, drug stores, mass merchandisers, gas and convenience stores, military commissaries, and select club and dollar retail chains for the 52 weeks ending August 11.

Private-label water ranked No. 1 in the still bottled water and seltzer/sparkling/mineral bottled water segments, generating dollar sales that were slightly more than $3 billion and $571 million, respectively, with year-over-year increases of 9.9 percent and 7.9 percent, respectively, IRI data reports.

With nearly 25 percent of market share, the private-label still water category commands the lion’s share of the bottled water category, while market share in the seltzer/sparkling/mineral bottled waters category is more evenly distributed between private label (18.3 percent); Sparkling Ice (15.3 percent); and La Croix (13.7 percent), it reports.

Mintel’s February “Still and Sparkling Water US” report affirms that consumers are more interested in no-frills, inexpensive water. “Private label brands represent 30 percent of the entire packaged water market,” it states. “While inexpensive water dominates the market, higher-end waters are trending. Premium, sustainable and functional waters are all growing both in terms of sales and product development.”

Beyond private label, Aquafina, a brand of PepsiCo, Purchase, N.Y., and DASANI, a brand of The Coca-Cola Co., Atlanta, are top performers in the still water segment as both posted sales just below $1.1 billion, respectively, in U.S. multi-outlets for the 52 weeks ending Aug. 11, IRI data reports.

Top seltzer / sparkling / mineral bottled waters

(Individual brands)

Private label $571,099,204 7.9 18.3 -0.9
Sparkling Ice $478,602,970 19.3 15.3 0.8
La Croix $429,311,551 -3.1 13.7 -2.3
Perrier $289,197,086 4.7 9.2 -0.7
Bubly $194,392,779 216.3 6.2 4.0
Polar $188,400,269 17.3 6.0 0.2
San Pellegrino $154,698,280 10.9 4.9 -0.1
Topo Chico $136,991,805 37.3 4.4 0.8
Schweppes $54,201,560 -14.0 1.7 -0.6
La Croix Curate $52,188,011 -13.5 1.7 -0.5
Category total* $3,127,509,062 13.1 100.0

*Includes brands not listed.

Source: Information Resources Inc. (IRI), Chicago. Total U.S. supermarkets, drug stores, mass merchandisers, gas and convenience stores, military commissaries, and select club and dollar retail chains for the 52 weeks ending August 11.


The healthy, hydration bandwagon

Market research analysts note that innovation will continue to be at the forefront of sales for the bottled water and enhanced water categories.

“Consumers are interested in a wide variety of functional water benefits such as water with antioxidants (43 percent), immunity-boosting water (33 percent), digestion-boosting water (25 percent), water with added protein (24 percent) and caffeinated water (16 percent),” Mintel’s Bryant says.

BMC’s Hemphill expects the gap between CSDs and water to widen, particularly because value-added waters like vitamin-infused waters, electrolyte-infused waters, caffeine-infused waters and even sparkling waters infused with cannabidiol (CBD) are giving consumers a plethora of choices.

“Value-added waters are growing at a brisk pace,” Hemphill says. “Water has proven to be a great vehicle for refreshment beverage innovation. The category continues to evolve with a steady stream of new products entering the market.”

To capitalize on consumers’ thirsting for more choices, more and more companies are hopping on the healthy hydration bandwagon and releasing new products.

For instance, in September Portland, Ore.-based Eclipse launched its self-titled CBD-infused sparkling water containing 20 mg of CBD in each serving in three flavors: Cucumber Mint, Mixed Berry and Lemon Lime. The sustainably sourced water comes from an aquifer deep beneath the Cascade Mountains and has zero sweeteners and zero categories in each 16-ounce can, the company says.

In its first-ever State of the Natural Industry report, Chicago-based SPINS notes that water consistently ranked in the Top 5 fastest-growing categories over a three-year period both through the lens of natural products and within the total marketplace, it says.

“Produce and shelf-stable water categories show strong performance among total natural products and the total marketplace, with water’s growth fueled largely by enhanced, flavored sparkling and flavored non-carbonated waters,” it states.

Within natural products, shelf-stable functional beverages continue to shine. “Shelf-stable functional beverages claimed the No. 4 spot on the natural list,” the report says. “While natural products across the entire category grew substantially over three years, natural performance beverages led the charge with 92.3 percent growth (by $104.8 million) to $218.4 million this year.”

Alkaline water brands also are adding innovations to the bottled water market. Scottsdale, Ariz.-based The Alkaline Water Co. Inc. debuted a new flavor-infused Alkaline88 line at Natural Products Expo East. Available in Watermelon, Lemon, Raspberry and Blood Orange, Alkaline88 will add Peach-Mango and Lemon-Line flavors to its portfolio later this year.

However, innovation is not limited to the finished products. Packaging also is commanding a growing role in the packaged water market. For example, Millennium NC Beverages, Waukesha, Wis., offers Elkiee in recyclable 8-ounce, BPA-free pouches that come with a built-in straw. With packaging aimed at children, the freezable water pouches have a 7.8 percent pH balance, a calcium content of 49.8 percent and a magnesium content of 31.1 percent, the company says.


Add some sparkle

Outpacing the overall bottled water market, the sparkling water segment is bubbling over with growth. However, the carbonated segment still has a ways to go to reach the volume of the still segment. “Sparkling water is one of the fastest-growing non-alcoholic beverage categories; sparkling water sales increased 11 percent from 2013 to 2018,” Mintel’s Bryant explains. “Still water sales are also increasing, and the still water market is roughly 4.4 times as large as the sparkling water market.”

Bryant doesn’t believe that still and sparkling waters are competing categories because bottled still water often is consumed on-the-go, while sparkling waters is consumed with meals as a substitute for CSDs.

Flavor innovation remains a vital component of the sparkling water segment as several fruity sparkling waters are hitting store shelves. For instance, Baltimore-based HyVIDA launched a patent-pending hydrogen infused sparkling water with three ingredients: carbonated water, magnesium and added hydrogen gas. The Better Bubbles product contains zero calories, zero sugars, zero sweeteners and no caffeine, and is available in three varieties: Pure, Organic Raspberry and Organic Lemon Lime.

Among the top sparkling water brands is bubly, a brand of PepsiCo, which had triple-digit growth of 216 percent and sales of $194 million in U.S. multi-outlets for the 52 weeks ending Aug. 11, IRI data reports. Other brands with double-digit growth include Topo Chico, a brand of The Coca-Cola Co., at 37 percent and nearly $137 million in sales; Sparkling Ice, a brand of Preston, Wash.-based Talking Rain, at 19.3 percent and $478 million in sales; and Nestlé Water’s San Pellegrino, at 10.9 percent and $154 million in sales, IRI data states.

“Sparkling water is one of the fastest growing categories in the entire beverage industry; sparkling water sales grew an estimated 118 percent from 2013 to 2018,” Mintel’s report states.

Euromonitor’s Passport report forecasts the still and carbonated/sparkling water segments will continue to grow robustly, with dollar sales of $24.5 billion by 2023 and a five-year CAGR of 10.6 percent for the 2018-2023 timeframe. BI