Bottled Water in the United States
The bottled water market has a promising future. As consumers become more health aware and continue to turn away from carbonated soft drinks and embrace bottled water in all forms, many of the leading beverage industry analysts and marketers believe that bottled water will be a dominant force out of the non-alcoholic beverages. America’s health and wellness concerns due to the struggle with obesity have led to a fitness fad of water being the zero-calorie/ultra-low calorie beverage of choice for millions of Americans. The continuous innovation in flavoring and packing has made bottled water trendy, appealing to consumers who have sworn off sugary drinks. Bottled water has also gained a new competitive advantage over high calorie beverages due to consumer activists creating public policies stating sugary drinks as menaces to public health. While consumption of premium European sparkling water brands has long served as a status symbol for urban elites, premium still water packaged in designer bottles has become the fashion statement du jour for more and more Millennials and GenXers.
The major marketers in the bottle water industry, however, still face a struggle, even with the upbeat view of the prospects for the bottled water industry. As supermarkets supply their shelves with loss-leading cases of plain bottled water, it no longer seems that competing on the basis of volume and price is possible for marketers of major brands. Industry leaders such as Coca-Cola Company and PepsiCo, Inc. are now revisiting their marketing strategies to keep up with the increasing competition from branded premium products and from low-priced commodity products from private label manufacturers.
Bottled Water in the United States highlights the challenges marketers of bottled water are facing, and analyzes their strategic responses against their competitors. This report also identifies the trends that are shaping the bottled water market; provides an estimate of the retail sales in the United States for both bottled still and sparkling waters for the 2008 to 2013 period, as well as forecasts retail sales through 2018; identifies marketing and new upcoming product trends; and provides an in-depth look at today’s bottled water consumers.
Scope and Methodology
This report analyzes the U.S. market for the following categories of bottled water: still water packaged in polyethylene terephthalate (PET) bottles; still water sold in jugs or bulk; and sparkling/mineral water. Bottled still water is currently being sourced from natural springs or purified water from other water sources. The sparkling/mineral water category includes naturally carbonated bottled water, but excludes seltzers and club sodas. Both bottled still and carbonated waters can be enhanced with vitamins or minerals and various flavorings.
The main source of the consumer data is from the Simmons National Consumer Survey (NCS) for Fall 2013 (and Fall 2004 in the case of 10-year-trend tables and figures) from Experian Marketing Services. On an ongoing basis, Experian Marketing Services conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for each 12-month survey compilation) who in aggregate represent a statistically accurate cross-section of the U.S. population. Simmons NCS uses the term “non-carbonated water,” but for this report the term “still water” is used.
Retail sales figures credited to IRI (Chicago, IL) are based on IRI aggregated multi-outlet (MULO) sales tracking, which represents sales through U.S. supermarkets, drugstores (including Walgreens, CVS, and Rite Aid), mass merchandisers (Walmart, Target, Kmart, and Shopko), warehouse clubs (Sam’s Club and BJ’s, but excluding Costco), dollar stores (excluding Dollar Tree), and military commissaries.
The report also includes data collected from field surveys of food retailers in various channels as well as a wide range of industry sources, including company websites, trade publications, business newspapers and magazines, consumer blogs, and annual reports, 10Ks and other releases from public companies.
Market Insights: A Selection From The Report
- Conditions are favorable for growth in U.S. retail sales of bottled water, and the bottled water market is projected to increase $4 billion between 2013 and 2018.
- Bottled water marketers are taking their products to new levels—making water not only a fashion statement but a fashion accessory.
- Major marketers of bottled water are redeploying assets in order to develop high-margin products to improve their bottom lines and beat back the threat emerging from smaller competitors.
- Marketers of bottled water have discovered that enhanced waters are a key weapon in the battle to claim the loyalties of converted drinkers of carbonated soft drinks.
- Many new bottled water products reflect a broader culinary trend toward bold and original flavors that has also become prevalent in foods such as snacks and crackers.
- Over the past ten years the number of adults who drank five or more glasses of bottled still water grew more than 20%, while the number of adults who drank five or more glasses of diet cola, other carbonated diet drinks and regular cola fell by double-digit percentages.
- In an attempt to create more profitable products, Coca-Cola Company has begun to move away from commodity-type bottled water and pivot toward new products with the potential to capture a share of the premium sparkling water market.
- Recent steps taken by PepsiCo, Inc. indicate that instead of competing on the basis of volume, the company is now intent on marketing high-profit, premium brands of bottled water.
- Marketers of bottled water have begun to focus on specific consumer segments. Resource, a new premium bottled water from Nestlé Waters North America, is targeting 35-year-old women. FlavorSplash, a new line of sparkling water from the Aquafina brand of PepsiCo, Inc., is geared toward teens.
- Compared to adults on average, those who drink relatively large quantities of bottled still water are more likely to be young and part of a multicultural population segment.
- Consumers who drink relatively large quantities of bottled still and sparkling waters are more likely to eat several small meals daily and snack primarily on healthy foods.
- Consumers of sparkling water have not completely abandoned carbonated soft drinks. Compared to adults on average, they are 21% more likely to drink regular cola and 22% more likely to drink diet non-cola drinks.
- When grocery shopping, consumers of comparatively large quantities of sparkling water are much more likely to look for organic foods and buy foods that are locally-sourced and without artificial additives.
- Chapter 1: Executive Summary
- Scope of the Report
- Methodology
- Market Overview
- Insights and Opportunities
- Premium Waters Seen as Salvation for Meager Profits
- Perceived Purity of the Product Still Matters
- “Natural” Enhancements Important
- Bold Colors and Flavors Start to Trend Upward
- Water Enhancers Create Promise and Loom as a Threat
- At-Home Carbonation Enters the Fray
- C-Stores Offer Hope for Bottom Lines of Bottled Water Marketers
- Sparkling Water Users Are Elite Consumers
- Competitive Strategies
- Major Marketers Forced to Hit Reset Button
- Talking Rain Beverage Company Disrupts Sparkling Water Market
- Marketing and New Product Trends
- PepsiCo Markets New Water Brand to Teens
- Essentia Water Promotes Health and Happiness
- Bottled Water Companies Support Drink Up Initiative
- Premium Still Water Offers “Ectrolytenment”
- Evian Takes Steps to Rebuild Brand
- LaCroix Revives Spree and Launches Cύrate
- Demographic Highlights
- Users of Bottled Still Water Tend to Be Young and Multicultural
- Sparkling Water Works for GenXers
- Perrier and S. Pellegrino Succeed with Upscale Urbanites
- Bottled Water Appeals to Weight-Conscious Americans
- Fitness Buffs Key Segment in Bottled Water Market
- Bottled Water Users Less Likely to Eat Three Square Meals a Day
- Healthy Snacking Appeals
- Bottled Water Fans Like to Try New Food and Beverage Products
- Sparkling Water Devotees Shop Natural Channel
- Ads Can Reach Bottled Water Drinkers on Social Media and Cellphones
- Chapter 2: Insights and Opportunities
- Bottled Water Market Rich with Opportunities and Rife with Challenges .. 16
- Major Brands Threatened from All Sides
- Table 2-1: IRI-Tracked Dollar and Volume Sales of Selected Beverages for the 52 Weeks Ending March 23, 2014, Private Labels vs. Branded .. 18
- Upstart Firms Become a Major Force
- Premium Waters Seen as Salvation for Meager Profits
- Perceived Purity of the Product Still Matters
- Table 2-2: Excerpts of Marketing Claims Made about Sources of
- Selected Water Brands
- “Natural” Enhancements Important
- Table 2-3: Excerpts of Health and Wellness Marketing Claims Made by Selected Enhanced and Flavored Waters
- Bold Colors and Flavors Start to Trend Upward
- Table 2-4: Flavors and Colors of Selected New Bottled Water Products
- Water Enhancers Create Promise and Loom as a Threat
- At-Home Carbonation Enters the Fray
- Dispensing Caps Open New Vistas
- C-Stores Offer Hope for Bottom Lines of Bottled Water Marketers
- Bottled Water Becomes a Fashion Statement
- Bottled Water Users a Desirable Demographic
- Sparkling Water Users Are Elite Consumers
- Chapter 3: Market Overview
- Historical Trends
- Consumers Shift from Carbonated Soft Drinks to Bottled Water
- Table 3-1: Number of Adults Drinking Five or More Glasses of Non-Alcoholic Beverages in Last Seven Days by Type of Beverage, 2004 vs. 2013
- More Consumers Drink Large Quantities of Bottled Water
- Table 3-2: Number of Adults Drinking Bottled Non-Carbonated Water by Number of Glasses Consumed in Last 7 Days, 2004 vs. 2013
- Table 3-3: Number of Glasses of Bottled Non-Carbonated Water Consumed in Last 7 Days, 2004 vs. 2013
- Bottled Water Use Mirrors Demographic Trends in U.S. Society
- Table 3-4: Selected Demographic Characteristics of Adults Drinking 7 or More Glasses of Bottled Non-Carbonated Water or 5 or More Glassesof Sparkling Water in Last 7 Days, 2004 vs. 2013
- Table 3-5: Number of Adults Consuming 7 or More Glasses of Bottled Non-Carbonated Water in Last 7 Days by Age Group, 2004 vs. 2013
- Size and Composition of the Market
- Market for Sparkling Water Bubbles, Still Water Flat
- Table 3-6: U.S. Retail Sales of Bottled Still Water, 2008-2013
- Still Water Volumes Up, Dollar Sales Down
- Convenience Stores Bolster Bottled Water Sales
- Figure 3-1: Projected U.S. Dollar Retail Sales of Bottled Water by Retail Channel, 2014 (% of total U.S. retail sales)
- Figure 3-2: Projected U.S. Dollar Retail Sales of Bottled Water by Retail Channel, 2014 (in million $)
- Factors Affecting Market Growth
- Shift from Carbonated Soft Drinks Expected to Last
- Industry Sources Bullish about the Future
- Still More Room for Growth in American Market
- Health and Fitness Movement Will Boost Bottled Water Market
- Public Policy Favors Bottled Water as Better-for-You Beverage
- Higher Prices for Premium Waters Will Help Dollar Sales
- Sparkling/Mineral Water to Stay on High Growth Curve
- Liquid Enhancers Will Boost Interest in Water
- Continued Commoditization of Plain Bottled Water Will Squeeze Profits
- PET Bottle Bans Create Obstacles to Growth
- Projected Market Growth
- Growth Will Accelerate
- Sparkling/Mineral Water Will Continue to Lead the Way
- Chapter 4: Competitive Strategies
- Overview
- Top Marketers Lose Ground to Private Labels
- Figure 4-1: Top 5 Marketers’ Shares of IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters, 52 Weeks Ending February 23, 2014
- Table 4-1: Leading Marketers’ Shares of IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters, 52 Weeks Ending February 23, 2014
- Private Labels Get Boost from PET/Convenience Segment
- Table 4-2: Private Labels’ Shares of IRI-Tracked Dollar Sales of Bottled Still and Sparkling Waters, 52 Weeks Ending February 23, 2014
- Nestlé Waters North America Stays on Top of Still Water Market
- Figure 4-2: Top 5 Marketers’ Shares of IRI-Tracked Dollar Sales of Bottled Still Water, 52 Weeks Ending February 23, 2014
- Table 4-3: Leading Marketers’ Shares of IRI-Tracked Dollar Sales of Convenience/PET Still Water, 52 Weeks Ending February 23, 2014
- Table 4-4: Leading Marketers’ Shares of IRI-Tracked Dollar Sales of Jug/Bulk Still Water, 52 Weeks Ending February 23, 2014
- Talking Rain Beverage Company Disrupts Sparkling Water Market
- Figure 4-3: Top 5 Marketers’ Shares of IRI-Tracked Dollar Sales of Sparkling/Mineral Water, 52 Weeks Ending February 23, 2014
- Table 4-5: Leading Marketers’ Shares of IRI-Tracked Dollar Sales of Sparkling/Mineral Water, 52 Weeks Ending February 23, 2014
- Competitive Strategies
- Nestlé Waters North America Remains in the Lead
- Table 4-6: IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters by Nestlé Waters North America, 52 Weeks Ending February 23, 2014
- Table 4-7: IRI-Tracked Dollar Sales of Perrier and S. Pellegrino Brandsvs. Other Brands of Nestlé Waters North America, 52 Weeks Ending February 23, 2014
- Coca-Cola Company “Hits a Speed Bump”
- Table 4-8: IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters by Coca-Cola Company, 52 Weeks Ending February 23, 2014
- Table 4-9: IRI-Tracked Dollar Sales of Major Brands of Bottled Still andSparkling/Mineral Waters by Coca-Cola Company, 52 Weeks Ending February 23, 2014
- PepsiCo Hopes Premium Products Will Keep Its Water Business Afloat .. 60
- Table 4-10: IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters by PepsiCo, Inc., 52 Weeks Ending February 23, 2014
- Sparkling ICE a One-Hit Wonder for Talking Rain Beverage Company
- Figure 4-4: IRI-Tracked Dollar Sales of Sparkling ICE Brand of Talking Rain Beverage Company, 52 Weeks Ending February 23, 2014
- Chapter 5: Marketing and New Product Trends
- Marketing Trends
- PepsiCo Launches Water Brand for Teens
- Essentia Water Promotes Health and Happiness
- Bottled Water Companies Support Drink Up Initiative
- Premium Still Water Offers “Ectrolytenment”
- Evian Takes Steps to Rebuild Brand
- New Product Trends: Sparkling Water
- Talking Rain Expands Fast-Growing Brand
- LaCroix Revives Spree and Launches Cύrate
- Coca Cola Launches DASANI Sparkling
- New Product Trends: Still Water
- New Brand of Premium Fashion Water Launched
- Blossom Water Introduces Essence Water
- Oceans Omega Offers Healthy Hydration with Omega Infusion
- Balance Water Adds Flower Extracts
- Ultra-Premium Canadian Water Introduced
- Chapter 6: Demographic Highlights
- Who Drinks Bottled Water
- Users of Bottled Still Water Tend to Be Young and Multicultural
- Table 6-1: Selected Demographic Characteristics of Adults Drinking Bottled Still Water by Number of Glasses Consumed in Last 7 Days, 2013
- Sparkling Water Works for GenXers
- Table 6-2: Selected Demographic Characteristics of Adults Drinking Sparkling Water by Number of Glasses Consumed in Last 7 Days, 2013
- Perrier and S. Pellegrino Succeed with Upscale Urbanites
- Table 6-3: Selected Demographic Characteristics of Adults Naming Perrier or S. Pellegrino the Brand of Sparkling Water Used Most Often, 2013
- Figure 6-1: Percent of Consumers Naming Perrier or S. Pellegrino the Brand of Sparkling Water Used Most Often with a Household Income of $100,000 or More, 2013
- Focus on Health and Fitness
- Bottled Water Appeals to Weight-Conscious Americans
- Table 6-4: Attitudes toward Weight Management of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013
- Fitness Buffs Key Segment in Bottled Water Market
- Figure 6-2: Percent of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days Who Exercise Five or More Times a Week, 2013
- Table 6-5: Physical Fitness Activities of Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
- Eating Habits and Food Preferences
- Bottled Water Users Less Likely to Eat Three Square Meals a Day
- Figure 6-3: Percent of Adults Drinking High Volumes of Bottled Still and Sparkling Waters Who Eat Several Small Meals throughout the Day, 2013
- Healthy Snacking Appeals
- Table 6-6: Healthy Snacking by Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
- Households of Bottled Water Drinkers Eat Lots of Other Snacks
- Table 6-7: Household Use of Snacks by Adults Drinking High Volumes of Bottled Still and Sparkling Waters by Type and Volume of Snack Consumed in Last 30 Days, 2013
- Energy and Sports Drinks Favored
- Table 6-8: Use of Other Beverages by Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
- Sparkling Water Drinkers Have Gourmet Tendencies
- Table 6-9: Food Preferences of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013
- Bottled Water Consumers Big Spenders in Grocery Stores
- Table 6-10 : Supermarket Shopping Profile of Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
- Bottled Water Fans Like to Try New Food and Beverage Products
- Table 6-11: Attitudes toward Trying New Food and Beverage Products of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013
- Sparkling Water Devotees Shop Natural Channel
- Table 6-12: Attitudes toward Natural Foods of Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
- Figure 6-4: Percent of Adults Drinking High Volumes of Bottled Still and Sparkling Waters Who Are Vegetarians, 2013
- Figure 6-5: Percent of Adults Drinking High Volumes of Bottled Still and Sparkling Waters Who Shopped at Trader Joe’s or Whole Foods in Last Four Weeks, 2013
- Receptivity to Marketing and Advertising
- Ads Can Reach Bottled Water Drinkers on Social Media and Cellphones
- Table 6-13: Receptivity to Marketing and Advertising on Cellphones and Social Media of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013 Magazines Work Too
- Table 6-14: Importance of Magazines of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013