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Initially slow to acquire the European taste for bottled water, American consumers have not only caught up fast but, writes Annette Sessions, have also enthusiastically embraced concepts such as flavoured and functional waters.

According to the US Department of Agriculture, the US per capita consumption of bottled water 10 years ago was 12.12 gallons (45.9 litres); the figure for 2005 is estimated to be 25.78 gallons. The category is enjoying growth worldwide, but in the US volume growth is unparalleled.

Business Trends Analysts (BTA) of Commack, New York, report that for women bottled water is the second most popular beverage, whilst it ranks fourth for men behind regular soft drinks and orange juice.

Americans drink more bottled water per person than they do coffee, beer or milk and in terms of per capita consumption, it is now the No 2 beverage behind carbonated soft drinks. BTA reports that there are approximately 400 water brands with some 800 variations. It is believed by US analysts that bottled water will, eventually,  become the No 1 beverage.

As in other countries, growth is being driven by the health conscious consumer, particularly young women; the nation's growing distrust of tap water, fuelled by  clever marketing campaigns  convincing consumers that not all waters are the same; and the convenience of the ubiquitous PET bottle which can be carried without fear of breakage.

"While all beverages have their role in a marketplace with an abundance of drink choices, consumers are choosing bottled water as a refreshing, hydrating beverage and as an alternative to others that may contain calories, caffeine, sugar, artificial colours, or alcohol,"  says Stephen Kay from the International Bottled Water Association (IBWA), the US trade association.

People living in the western US are the biggest drinkers of bottled water. Here consumers are generally more health conscious in their eating and drinking habits. The north east area of the US is another area of high usage. According to BTA, this location accounts for approximately 25% of bottled water consumption.

The US Food and Drug Administration regulates bottled water as a packaged food product with stringent standards for safety, qualification, production, labelling and identity. State governments also regulate bottled water and inspect, sample, analyse and approve bottled water sources.

Recently the availability of bottled water contributed hugely to the relief efforts to victims of Hurricane Katrina. Members of IBWA donated at least 7m bottled water servings to the devastated areas of Louisiana, Mississippi and Alabama.

What sets America's bottled water growth apart from others, though, is the innovation in functional waters. Here it leads. Not only are there 'nutrient enhanced' waters, but also 'oxygenated',  containing up to 10 times more oxygen than regular bottled water, and 'clustered' water.

'Clustered' water a restructured water which creates clusters of smaller molecules for more rapid absorption. There are more than 30 companies in the US currently producing these waters, with  Penta Water leading the way. This brand has just reinforced its clean, premium, upscale image, with a label change.  The Penta name is now bolder, the cluster of molecules on the label has been broken apart to give the molecules the appearance of movement, and the product description is now 'ultra-purified premium drinking H2O.'

Glaceau Vitamin water, formed in 1996,  claims to have invented the enhanced water category. With an impressive 200% compounded annual growth since 1996, it now produces vitaminwater (nutrient-enhanced), fruitwater (flavour-enhanced) and smartwater (electrolyte-enhanced). The latest addition to its portfolio is a sports drink, vitaminwater perform. This is  a low-calorie beverage which the company says contains more electrolytes and B vitamins than Gatorade, the mainstream leading US sports drink from PepsiCo.

The year to date has seen a number of new so-called functional bottled waters come to market such as V.Net Beverages' launch of AliMax Nutraceutical Water with Alisure extract (stabilised Alicin) which has been proven in medical studies in the UK to alleviate symptoms of the common cold. Linking with the National Osteoporosis Foundation, Sanfaustino calcium water, sourced from a calcium-rich spring in Umbria, is another recent launch in the functional water category.

As exciting as the functional category is, it remains a niche. Flavoured waters, however, have become mainstream. Beverage Marketing Corporation reports that flavoured waters accounted for 3% and 5% of single-serve sales in the still and sparkling water segments respectively in 2004. In 2005, sales at the wholesale level should grow to US$370m, representing 44m gallons in volume terms.

Earlier in the year, Pepsi-Cola North America added FlavourSplash to its market-leading Aquafina brand, as well as a sparkling variant. Coca-Cola followed suit with raspberry and lemon additions to Dasani, further expanding the range with the launch earlier this month of a strawberry flavour.

Nestlé Waters, too, has added flavour variants to its large portfolio of water offerings. Nestlé Waters North America sells more bottled water than any other US company. It markets key European brands such as Perrier, San Pellegrino and Vittel as well as host of US brands sourced in the main from natural mountain stream springs. With names such as Arrowhead, Great Bear, Ice Mountain and Deer Park (sourced along the Appalachian Trail) North America's pioneering spirit  is seen again in bottled waters.


Sectors: Water

Companies: PepsiCo, San Pellegrino, Vittel

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