Bottled water has never enjoyed as high a profile as it does today. Functional drinks too are experiencing unprecedented growth. Put the two together and you should have a winning combination. Annette Sessions investigates.

So-called functional waters (according to Euromonitor, the fastest growing functional beverage) might be the 'new kid on the block' in the western world but the category has been around for many years in Japan where consumers have a greater awareness of functional foods and beverages. Here all products are regulated under the Government approved FOSHU (Foods for Specified Health Use) scheme offering consumers assurances over health claims which are thus far lacking elsewhere and are, indeed, an ongoing bone of contention in Europe.

In Japan the drink is called a 'near' water. Hiroto Kato from Wild Japan reports that annual near waters sales in Japan have now reached a volume of over 1 billion litres and continue to rise. He says they are increasingly including items such as dietary fibres or amino acids as functional ingredients.

Amino acids, which are said to enhance health and beauty, relieve fatigue and maintain good health, do, indeed, appear to be a key functional ingredient. According to Chemical Daily News, the market for beverages supplemented with amino acids has grown from ¥9.6 billion (£768,000) in 1996 to over ¥70 billion (£5.6m) in 2002.

Japanese analyst Paul Yamaguchi reports that bottled water aisles in today's Japanese supermarkets are stacked with products containing amino acids. Such beverages like Amino Supli from Kirin Beverages are particularly popular among young Japanese. In 2002 Amino Supli sold 14m cases. The drink contains eight kinds of amino acids with a total of 1,000mg in each 500ml bottle. Other popular water drinks include Charge and Concept-San from Asahi Beverages, Amino-Shiki from Suntory, Amino Calpis from Calpis, Amino Vital from Ajinimoto , Amino Acid Diet Water from Pokka and Pocket Doctor and Aquarius from Coca-Cola Japan.

Although Japan has the highest annual per capita consumption of functional food and drinks at US$166.00 (by comparison the US spends US$136 per person, and Europe US$92), it is the US which has the largest market. Here the marrying of water and functional ingredients - more often referred to as nutraceutical - has seen some truly innovative results. Initially these came from smaller independent companies, but are now dominated by mainstream soft drink companies.

Take, for example, Glaceau Vitamin Water from Energy Brands Inc. Its range of 11 functional waters include Rescue, Multi-V, Stress-B, Defence, Revive, Endurance, Focus, Essential, Balance, Power-C, Energy. Each start with vapour distilled water to which is added an array of functional ingredients to match the mood of the drinker inherent in the drink's name and drinking occasion. Similarly AriZona Beverages has its Wateraid range comprising Calcium (Orange Cream), Energy (Citrus Blend), Immune (Green Tea), Power (Fruit Punch), Stress (Decaf tea) and Total Trim (Ruby Red Grapefruit).
More in the mainstream is Propel Fitness Water from The Gatorade Company. This range of lightly flavoured waters has just 10 calories per 8oz serving and added vitamins to contribute to an overall healthy lifestyle.

"Propel is a huge success story because our consumers understand the hydration benefits of Propel and love that it tastes great, has essential vitamins and is low in calories," commented Marie Devlin, director of marketing.

Expert Analysis

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In the southern hemisphere the functional water concept is enjoying similar growth patterns. Niche New Zealand-company The Sanitarium Health Food Company has launched Waterplus in four flavours. The drinks contain a range of essential minerals and vitamins including water-soluble B vitamins which are used by the body to help produce energy from food, plus vitamins C and E which can act as antioxidants; there is no added sugar and 710ml bottle has just two calories.

But activity is not confined to the specialist companies. As in the US, mainstream manufacturers have infiltrated the sector. Coca-Cola Oceania has introduced aQuana, a purified water with vitamins and herbal infusions targeted at women as 'water for wellbeing.' The three flavours are Alive (natural citrus), Chill (a herbal infusion of peppermint, chamomile and lemongrass lightly infused with orange flavour) and Strong (ginkgo biloba extracts, anitoxidants and a hint of natural berries).

Meanwhile in Australia bottled water is viewed as the coolest drink in town. The bottled water market grew 20% last year compared to 5% for carbonates. There are reported to be more than 1000 water brands available, ranging from market leaders Coca-Cola Amatil with its Mount Franklin and Pump (for drinking at the gym) brands through to what are described as boutique "rain farms".

Not to be outdone, Europe has kept up to speed with the likes of Danone Activ, Vittel + Energy, Contrex, Lucozade Sport Hydro Active, Nutriwater, to name a few. Typical of the new product development is Lipton, leader in the ice tea market, which has just launched Aquaé Vital and Aquaé Equilibre in France. The drinks, an infusion of water, tea and plants, are aimed at women, marketed to help them face the stresses of daily life while looking for 'balance and vitality'.

And what of the future? Analysts see no end to the rise and rise of bottled water. Concerns over health, obesity and well-being are not going to go away and lifestyle issues add credence to new product development. But, in what is fast becoming a crowded category, new entrants will need a USP, eye-catching packaging and marketing skills to really make their mark.