A glance at the "Water List" at exclusive London hotel Claridge's may give one a glimpse into the future for the water sector. The lofty prices being asked for exotic waters sourced from far-flung countries may represent something of an extreme, but Annette Farr believes it shows how consumer tastes in water are becoming more sophisticated, providing potential for increasing product innovation and differentiation.

Despite the continuous flak from various pressure groups concerned about environment and sustainability issues, the water category continues to grow. Health issues remain crucial to the bottled water sector's onward trajectory as the drink's healthy hydration and zero-calorie proposition finds favour with consumers.

Only this month, London's famous Claridges hotel introduced a bottled water menu listing some 30 different bottled waters sourced from all over the world. As Renaud Grégoire, the hotel's food & beverage director, points out, "Water is becoming like wine. Every guest has an opinion and asks for a particular brand. At Claridge's we try to be ahead of our guest's requests and offer the very best choice available."

Prices range from GBP5 (US$10.30) for a 750ml bottle of Hildon spring water from Hampshire in the UK to GBP21 for either an 840ml bottle of 420 Volcanic spring water from Tai Tapu, New Zealand, or a 1-litre bottle of Just Born Spring Drops, from the Nilgris Mountains of India.

For GBP20, guests can drink Mahalo Deep Sea Water. Claimed to be extraordinarily rare, this water from Kailua-Kona in Hawaii was originally a freshwater iceberg which melted thousands of years ago. Being of a different temperature and salinity to the sea water around it, it sank to become a lake at the bottom of the ocean floor. Other rare offerings include another iceberg water from Newfoundland, Canada, called Berg, and 10 Thousand BC, a glacier water from British Columbia.

Japan's Finé artesian water from Shuzenji is said to be a perfect companion to sushi, sashimi and caviar, and is priced at GBP15 for 720ml. Claridges explains that these bottled waters are naturally more expensive because they are harder to obtain.

For the most part European waters such as Badoit, Evian, Perrier, Volvic, San Pellegrino are priced between GBP5 and GBP6. And the hotel says it is quite happy to offer one further choice: a glass or a jug of London tap water, "which of course any guest is welcome to, at any time, free of charge."

Since its launch, Claridges says the water menu has been a "relative success". According to spokeswoman Gill Christophers, "Guests have read about it and tried different waters out of curiosity and other guests have simply asked for the various waters by name."

However, there is no water sommelier. The hotel considers that this would be taking things too far. But waiters and waitresses have all been trained about the new menu and can offer limited advice.

Could water become the new wine? Time will tell, but there is every likelihood that in years to come the diner's choice will improve beyond the simple "still or sparkling" offering. Two recently published reports by analysts Canadean and Zenith will make interesting reading for all hotels and restaurants contemplating introducing water menus.

Canadean's 2007 Global Bottled Water Report shows that sales of bottled waters in 2006 saw the global per capita figure cross the 20-litre mark with a compound annual growth rate averaging just over 8% since 2001.

Eastern Europe is said to be a particularly buoyant market with double-digit growth. As East Europeans drink significantly less bottled water than their West European neighbours (16 litres per capita compared to 26 litres) there is further growth potential as these markets integrate into the European Union and adopt more Western European habits.

Canadean, however, has sounded a note of caution regarding West Europe, predicting that between 2008 and 2010 the region's share of the global market will drop from a third to under 29%. It is anticipated that East Europe will add more volume sales than West Europe in these three years.

The slowdown will be seen in France, Germany, Italy and Spain, which between them account for more than eight out of every ten litres sold in the region and more than a quarter of world sales. As Canadean states, "The rest of the world may be drinking more French water, but the French are not."

Only the Netherlands and Austria are expected to see increased sales. A pronounced slowdown is anticipated in Sweden where the debate on the relationship between the environment and packaged water has been ongoing this year. In neighbouring Denmark, green thinking has prompted legislation which will make PET still water bottles liable to a deposit by mid 2008.

However, the long-term outlook remains good in West Europe. As Canadean points out, with the per capita levels in the region varying so dramatically from 19 litres in Finland to 202 litres in Italy, considerable opportunities remain.

Meanwhile, Zenith forecasts that global bottled water consumption will grow to 251bn litres by 2011. Its new 2007 Global Bottled Water report showed that in 2006 worldwide sales volumes of bottled water increased by 8% to reach 187bn litres, driven mainly by Eastern Europe and Asia, which accounted for about half of all demand.

Asia and Australasia continued to dominate overall demand for bottled water during 2006, claiming a 21% share of the worldwide market, the Zenith report states. Double-digit growth was seen in India, Malaysia, China and Pakistan allowing the region to post an 11% increase in consumption over the previous year.

In Africa, bottled water consumption grew by 11%. Elsewhere, the North American market grew by 9%, the Middle East by 7%, Latin America by 5% and Western Europe by 3%, Zenith reports.

Even in the current climate of environmental concerns over bottled water versus tap, the findings highlight the continued opportunities for companies and bottled water manufacturers worldwide.