H2O Trends

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Health remains high on the agenda in line with the sugar levy. As a result, many people are showing greater interest in the flavoured water category as they seek healthier alternatives to high-sugar carbonates. Although it is interesting to note, even flavoured waters with a high sugar content have benefitted from a healthier assumption. Approximately 48% of people are drinking more flavoured bottled waters to replace high sugar drinks says Mintel, 2016.

Sales of bottled water have grown by more than 2,700% in four decades, according to Market Watch, and are expected to continue to grow “at a CAGR of 7.95% during the period 2017-2021” says PR News Wire. It is still one of the strongest performing categories in the non-alcoholic beverage market. The US holds the global market share, followed by Mexico, Indonesia and Germany.

Upgraded Water
Premium, craft, organic and not-from-concentrate plant waters are leading the way in the alternative waters market. Flavoured waters with added carbonation can provide a good alternative to fizzy drinks thus providing a similar mouthfeel. Boosting alkalinity, added minerals, sleep-aids and electrolytes are being targeted to consumer needs. We have also seen hydrogen infused waters on the market, along with hop, grape skin, hemp and tomato infused waters, which illustrate the potential of expansion for this category.

The growing interest in water is also being fuelled by the premiumisation of the category. Companies are creating functional formulations with added vitamins, minerals, antioxidants, electrolytes and essential oils. Added benefits now appeal to a broader consumer base, marketed to maintain overall health and wellbeing rather than the sports category alone. This appeals particularly to those consumers seeking functionality. Plant-based waters such as: bamboo, artichoke, birch, olive, ginger, rose, banana, cactus and maple water remain popular, with sales of maple water set to triple until 2020 according to Portia Rifat, senior market analyst with Zenith Global.

Free-From Water
In an effort to engage further with consumers, claims on flavoured waters consist of free from: calories, sugar, sweeteners, caffeine, fat, gluten, Bisphenol A (BPA). Over half of American shoppers find it somewhat or very appealing according to Global Data’s 2016 global consumer survey, if a non-alcoholic drink claims to have ‘zero-sugar’. Elizabeth Sisel, Beverage Analyst at Mintel says: “In the coming years, consumers will likely put even greater value on no artificial ingredients in bottled water. To capitalise on this trend, brands should emphasise free-from claims on packaging as they release new flavours and functions in order to engage the market’s most active consumers.”

Market Reflections
In Asia, the 2018 Winter Olympics in PyeongChang, followed by the 2020 Summer Olympics in Tokyo should help drive growth in the sports water category. Investment in low, zero sugar and exciting flavours are key, as innovation will be a key driver in keeping interest in the flavoured and enhanced water market. “Lemon and berries have been the favourite flavours of North American consumers” according to Global Data. It is also noted that flavoured water can also be cheaper than regular water, which is another driver for strong sales. In Australasia, we understand lemon performed well with 53% share of the market.

Drying Out
As many countries experienced high sales of flavoured waters, regions across Argentina and Bosnia-Herzegovina experienced lower volumes due to economic concerns, while it is noted in Germany and Austria, consumers did not give in to the health credentials and opted towards trendier categories. We are told in Germany “the trend pushed consumers towards beverages with a high juice content” says Global Data.

Outside the Bottle
Packaging plays a key driver in the water market when it comes to successfully targeting specific consumers, whether it is by appealing to their emotional and physical needs, their demographic or social status. Packaging will also play a crucial role in the buying decision in light of escalating global concerns surrounding plastic pollution.

Planet or Plastic?
The growth of plastic production has outrun our waste management capability, which has had a significant impact on our environment. From microplastics found in seafood, to plastic particles in bottled water, increased education and media coverage surrounding this issue has made it an extremely hot topic for the whole supply chain.

According to a study published in the peer-reviewed journal Science Advances, 8.3 billion metric tons of plastics have been created since the large-scale production of plastic which began in the 1950s. 6.3 billion tons had already become waste and of that total, only nine has been recycled. New evidence has also shown polyethylene terephthalate (PET) bottles, may be more harmful than originally thought and therefore alternative packaging solutions are a key area for exploration. One start-up company has created sustainable packaging made from algae which can be ingested for nutritional benefits as well as 100% biodegradable if thrown away.

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