Is premium bottled water losing ground?
The beverage specialists from Power Brand Consulting review the rise of private label bottled water and how it’s affecting premium bottled water. They believes that due to the unfavorable economic climate from the past year, customers are turning their attention to cheaper bottled water solutions, mainly private label ones. The Chicago-based research firm Mintel backs up the statement in its latest report on bottled water sales in the United States. The report reveals that from February 2011 to February 2012 the top three premium bottled water companies – Nestle Water, The Coca-Cola Co. and PepsiCo lost two percent of the bottled water market share, down to 57 percent, even though the overall market experienced growth in the last five years. Total sales of bottled water in 2011 reached $12.1 billion, marking a total increase of 5 percent from 2006.
In the 52 weeks ending on July 8, private label bottled water experienced a growth rate of 5.3 percent, totaling sales of $6.8 billion, with the majority of the top ten brands reporting increased sales, according to a report by market research firm SymphonyIRI. It is estimated that around 25 percent of consumers are actively looking for private label bottled water, due to the reduced price.
The Power Brands Consulting bevearge experts note that flavored and/or enhanced bottled waters are on the rise and according to Mintel’s report, they controlled 24 percent of bottled water in 2011. The experts state that a lot of bottled water consumers are looking for low-calorie products and the flavored and enhanced bottled waters’ high-calorie count may turn away some of these customers. This can be observed in Nestlé Waters’ Pure Life which experienced a 17 percent increase in sales in a year, totaling $40 million.
Mintel’s report reveals that premium enhanced bottled waters experienced a decline in sales year-over-year. PepsiCo’s SoBe Lifewater , Propel and The Coca-Cola Co.’s Glacéau Vitaminwater witnessed a dip in sales of 6.3 percent, 10.8 percent and 4.6 percent respectively. The companies realized the consumers’ preference for healthier alternatives and introduced zero-calorie alternative products.
According to SymphonyIRI’s report, the sparkling water segment saw a 30 percent increase in sales in the past year, with all the top ten brands reporting an increase in sales. Mintel also estimates that the sector will continue to grow, with the period from 2011 to 2016 having an expected growth rate of 43 percent.
The growth is attributed to the consumers’ preferences for healthier alternatives to soft drinks and the carbonated taste, which still water doesn’t have. On top of that, sparkling waters do not have any calories, sweeteners, gluten or sodium, which makes them very appealing to health-conscious consumers.
Power Brands Consulting 