Bottled Water in the U.S.

Apr 24, 2014
100 Pages - Pub ID: LA5233098
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Bottled Water in the U.S.

It’s easy to poke fun at bottled water – you want me to pay how much for something I can get from a fountain for free?

But the market for bottled water is no joke. Consumers are losing interested in sodas and other sugary drinks. Sports drinks have their appeal, but increasingly health experts and diet advocates are suggesting the plain old water is best for athletes and recreational jocks, not to mention the sedentary public. So enter the bottled water market. Health and wellness concerns, the fitness fad and the perennial struggle of many consumers with obesity and being overweight have combined to make bottled water the zero-calorie/ultra-low calorie beverage of choice for growing millions of Americans.

Packaging and flavor innovations offer new, appealing options for consumers. While consumption of premium European sparkling water brands has long served as a status symbol for urban elites, premium still water packaged in designer bottles has become the fashion statement du jour for more and more Millennials and GenXers.

But the future for the market is not without its challenges. As supermarkets stock their shelves with loss-leading cases of plain bottled water, simply competing on the basis of volume and price no longer seems feasible to marketers of major brands. Major players such as Coca-Cola Company and PepsiCo, Inc. have been forced to revisit their strategies in the face of increasingly fierce competition from branded premium products from upstart brands like Talking Rain Beverage Company as well as low-priced commodity products from private label manufacturers.

Bottled Water in the U.S. highlights the challenges facing marketers of bottled water and analyzes their strategic responses in an increasingly hostile competitive landscape. The report also highlights trends shaping the market for bottled water; provides an estimate of U.S. retail sales of bottled still and sparkling waters for the 2008 through 2013 period and a projection of U.S. retail sales through 2018; identifies marketing and new product trends; and provides an in-depth look at today’s consumers of bottled water.
Scope of the Report

This report analyzes the U.S. market for the following categories of bottled water: still water packaged in polyethylene terephthalate (PET) bottles; still water sold in jugs or bulk; and sparkling/mineral water. Bottled still water can either be sourced from natural springs or consist of purified water from other water sources. The sparkling/mineral water category includes naturally carbonated bottled water but does not include seltzers and club soda, which are artificially carbonated. Both bottled still and carbonated waters can be enhanced with vitamins or minerals and various flavorings.

Methodology

The main source of consumer data in this report is the Simmons National Consumer Survey (NCS) for Fall 2013 (and Fall 2004 in the case of 10-year-trend tables and figures) from Experian Marketing Services. On an ongoing basis, Experian Marketing Services conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for each 12-month survey compilation) who in aggregate represent a statistically accurate cross-section of the U.S. population. Simmons NCS uses the term “non-carbonated,” but for the sake of consistency, the term “still water” is used throughout this report.

Retail sales figures credited to IRI (Chicago, IL) are based on IRI aggregated multi-outlet (MULO) sales tracking, which represents sales through U.S. supermarkets, drugstores (including Walgreens, CVS, and Rite Aid), mass merchandisers (Walmart, Target, Kmart, and Shopko), warehouse clubs (Sam’s Club and BJ’s, but excluding Costco), dollar stores (excluding Dollar Tree), and military commissaries.

The report is also based upon data collected from field surveys of food retailers in various channels as well as a wide range of industry sources, including company websites, trade publications, business newspapers and magazines, consumer blogs, and annual reports, 10Ks and other releases from public companies.
Chapter 1: Executive Summary
Scope of the Report
Methodology
Market Overview
Insights and Opportunities
Premium Waters Seen as Salvation for Meager Profits
Perceived Purity of the Product Still Matters
“Natural” Enhancements Important
Bold Colors and Flavors Start to Trend Upward
Water Enhancers Create Promise and Loom as a Threat
At-Home Carbonation Enters the Fray
C-Stores Offer Hope for Bottom Lines of Bottled Water Marketers
Sparkling Water Users Are Elite Consumers
Competitive Strategies
Major Marketers Forced to Hit Reset Button
Talking Rain Beverage Company Disrupts Sparkling Water Market
Marketing and New Product Trends
PepsiCo Markets New Water Brand to Teens
Essentia Water Promotes Health and Happiness
Bottled Water Companies Support Drink Up Initiative
Premium Still Water Offers “Ectrolytenment”
Evian Takes Steps to Rebuild Brand
LaCroix Revives Spree and Launches Cύrate
Demographic Highlights
Users of Bottled Still Water Tend to Be Young and Multicultural
Sparkling Water Works for GenXers
Perrier and S. Pellegrino Succeed with Upscale Urbanites
Bottled Water Appeals to Weight-Conscious Americans
Fitness Buffs Key Segment in Bottled Water Market
Bottled Water Users Less Likely to Eat Three Square Meals a Day
Healthy Snacking Appeals
Bottled Water Fans Like to Try New Food and Beverage Products
Sparkling Water Devotees Shop Natural Channel
Ads Can Reach Bottled Water Drinkers on Social Media and Cellphones
Chapter 2: Insights and Opportunities
Bottled Water Market Rich with Opportunities and Rife with Challenges .. 16
Major Brands Threatened from All Sides
Table 2-1: IRI-Tracked Dollar and Volume Sales of Selected Beverages for the 52 Weeks Ending March 23, 2014, Private Labels vs. Branded .. 18
Upstart Firms Become a Major Force
Premium Waters Seen as Salvation for Meager Profits
Perceived Purity of the Product Still Matters
Table 2-2: Excerpts of Marketing Claims Made about Sources of
Selected Water Brands
“Natural” Enhancements Important
Table 2-3: Excerpts of Health and Wellness Marketing Claims Made by Selected Enhanced and Flavored Waters
Bold Colors and Flavors Start to Trend Upward
Table 2-4: Flavors and Colors of Selected New Bottled Water Products
Water Enhancers Create Promise and Loom as a Threat
At-Home Carbonation Enters the Fray
Dispensing Caps Open New Vistas
C-Stores Offer Hope for Bottom Lines of Bottled Water Marketers
Bottled Water Becomes a Fashion Statement
Bottled Water Users a Desirable Demographic
Sparkling Water Users Are Elite Consumers
Chapter 3: Market Overview
Historical Trends
Consumers Shift from Carbonated Soft Drinks to Bottled Water
Table 3-1: Number of Adults Drinking Five or More Glasses of Non-Alcoholic Beverages in Last Seven Days by Type of Beverage, 2004 vs. 2013
More Consumers Drink Large Quantities of Bottled Water
Table 3-2: Number of Adults Drinking Bottled Non-Carbonated Water by Number of Glasses Consumed in Last 7 Days, 2004 vs. 2013
Table 3-3: Number of Glasses of Bottled Non-Carbonated Water Consumed in Last 7 Days, 2004 vs. 2013
Bottled Water Use Mirrors Demographic Trends in U.S. Society
Table 3-4: Selected Demographic Characteristics of Adults Drinking 7 or More Glasses of Bottled Non-Carbonated Water or 5 or More Glassesof Sparkling Water in Last 7 Days, 2004 vs. 2013
Table 3-5: Number of Adults Consuming 7 or More Glasses of Bottled Non-Carbonated Water in Last 7 Days by Age Group, 2004 vs. 2013
Size and Composition of the Market
Market for Sparkling Water Bubbles, Still Water Flat
Table 3-6: U.S. Retail Sales of Bottled Still Water, 2008-2013
Still Water Volumes Up, Dollar Sales Down
Convenience Stores Bolster Bottled Water Sales
Figure 3-1: Projected U.S. Dollar Retail Sales of Bottled Water by Retail Channel, 2014 (% of total U.S. retail sales)
Figure 3-2: Projected U.S. Dollar Retail Sales of Bottled Water by Retail Channel, 2014 (in million $)
Factors Affecting Market Growth
Shift from Carbonated Soft Drinks Expected to Last
Industry Sources Bullish about the Future
Still More Room for Growth in American Market
Health and Fitness Movement Will Boost Bottled Water Market
Public Policy Favors Bottled Water as Better-for-You Beverage
Higher Prices for Premium Waters Will Help Dollar Sales
Sparkling/Mineral Water to Stay on High Growth Curve
Liquid Enhancers Will Boost Interest in Water
Continued Commoditization of Plain Bottled Water Will Squeeze Profits
PET Bottle Bans Create Obstacles to Growth
Projected Market Growth
Growth Will Accelerate
Sparkling/Mineral Water Will Continue to Lead the Way
Chapter 4: Competitive Strategies
Overview
Top Marketers Lose Ground to Private Labels
Figure 4-1: Top 5 Marketers’ Shares of IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters, 52 Weeks Ending February 23, 2014
Table 4-1: Leading Marketers’ Shares of IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters, 52 Weeks Ending February 23, 2014
Private Labels Get Boost from PET/Convenience Segment
Table 4-2: Private Labels’ Shares of IRI-Tracked Dollar Sales of Bottled Still and Sparkling Waters, 52 Weeks Ending February 23, 2014
Nestlé Waters North America Stays on Top of Still Water Market
Figure 4-2: Top 5 Marketers’ Shares of IRI-Tracked Dollar Sales of Bottled Still Water, 52 Weeks Ending February 23, 2014
Table 4-3: Leading Marketers’ Shares of IRI-Tracked Dollar Sales of Convenience/PET Still Water, 52 Weeks Ending February 23, 2014
Table 4-4: Leading Marketers’ Shares of IRI-Tracked Dollar Sales of Jug/Bulk Still Water, 52 Weeks Ending February 23, 2014
Talking Rain Beverage Company Disrupts Sparkling Water Market
Figure 4-3: Top 5 Marketers’ Shares of IRI-Tracked Dollar Sales of Sparkling/Mineral Water, 52 Weeks Ending February 23, 2014
Table 4-5: Leading Marketers’ Shares of IRI-Tracked Dollar Sales of Sparkling/Mineral Water, 52 Weeks Ending February 23, 2014
Competitive Strategies
Nestlé Waters North America Remains in the Lead
Table 4-6: IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters by Nestlé Waters North America, 52 Weeks Ending February 23, 2014
Table 4-7: IRI-Tracked Dollar Sales of Perrier and S. Pellegrino Brandsvs. Other Brands of Nestlé Waters North America, 52 Weeks Ending February 23, 2014
Coca-Cola Company “Hits a Speed Bump”
Table 4-8: IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters by Coca-Cola Company, 52 Weeks Ending February 23, 2014
Table 4-9: IRI-Tracked Dollar Sales of Major Brands of Bottled Still andSparkling/Mineral Waters by Coca-Cola Company, 52 Weeks Ending February 23, 2014
PepsiCo Hopes Premium Products Will Keep Its Water Business Afloat .. 60
Table 4-10: IRI-Tracked Dollar Sales of Bottled Still and Sparkling/Mineral Waters by PepsiCo, Inc., 52 Weeks Ending February 23, 2014
Sparkling ICE a One-Hit Wonder for Talking Rain Beverage Company
Figure 4-4: IRI-Tracked Dollar Sales of Sparkling ICE Brand of Talking Rain Beverage Company, 52 Weeks Ending February 23, 2014
Chapter 5: Marketing and New Product Trends
Marketing Trends
PepsiCo Launches Water Brand for Teens
Essentia Water Promotes Health and Happiness
Bottled Water Companies Support Drink Up Initiative
Premium Still Water Offers “Ectrolytenment”
Evian Takes Steps to Rebuild Brand
New Product Trends: Sparkling Water
Talking Rain Expands Fast-Growing Brand
LaCroix Revives Spree and Launches Cύrate
Coca Cola Launches DASANI Sparkling
New Product Trends: Still Water
New Brand of Premium Fashion Water Launched
Blossom Water Introduces Essence Water
Oceans Omega Offers Healthy Hydration with Omega Infusion
Balance Water Adds Flower Extracts
Ultra-Premium Canadian Water Introduced
Chapter 6: Demographic Highlights
Who Drinks Bottled Water
Users of Bottled Still Water Tend to Be Young and Multicultural
Table 6-1: Selected Demographic Characteristics of Adults Drinking Bottled Still Water by Number of Glasses Consumed in Last 7 Days, 2013
Sparkling Water Works for GenXers
Table 6-2: Selected Demographic Characteristics of Adults Drinking Sparkling Water by Number of Glasses Consumed in Last 7 Days, 2013
Perrier and S. Pellegrino Succeed with Upscale Urbanites
Table 6-3: Selected Demographic Characteristics of Adults Naming Perrier or S. Pellegrino the Brand of Sparkling Water Used Most Often, 2013
Figure 6-1: Percent of Consumers Naming Perrier or S. Pellegrino the Brand of Sparkling Water Used Most Often with a Household Income of $100,000 or More, 2013
Focus on Health and Fitness
Bottled Water Appeals to Weight-Conscious Americans
Table 6-4: Attitudes toward Weight Management of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013
Fitness Buffs Key Segment in Bottled Water Market
Figure 6-2: Percent of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days Who Exercise Five or More Times a Week, 2013
Table 6-5: Physical Fitness Activities of Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
Eating Habits and Food Preferences
Bottled Water Users Less Likely to Eat Three Square Meals a Day
Figure 6-3: Percent of Adults Drinking High Volumes of Bottled Still and Sparkling Waters Who Eat Several Small Meals throughout the Day, 2013
Healthy Snacking Appeals
Table 6-6: Healthy Snacking by Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
Households of Bottled Water Drinkers Eat Lots of Other Snacks
Table 6-7: Household Use of Snacks by Adults Drinking High Volumes of Bottled Still and Sparkling Waters by Type and Volume of Snack Consumed in Last 30 Days, 2013
Energy and Sports Drinks Favored
Table 6-8: Use of Other Beverages by Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
Sparkling Water Drinkers Have Gourmet Tendencies
Table 6-9: Food Preferences of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013
Bottled Water Consumers Big Spenders in Grocery Stores
Table 6-10 : Supermarket Shopping Profile of Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
Bottled Water Fans Like to Try New Food and Beverage Products
Table 6-11: Attitudes toward Trying New Food and Beverage Products of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013
Sparkling Water Devotees Shop Natural Channel
Table 6-12: Attitudes toward Natural Foods of Adults Drinking High Volumes of Bottled Still and Sparkling Waters, 2013
Figure 6-4: Percent of Adults Drinking High Volumes of Bottled Still and Sparkling Waters Who Are Vegetarians, 2013
Figure 6-5: Percent of Adults Drinking High Volumes of Bottled Still and Sparkling Waters Who Shopped at Trader Joe’s or Whole Foods in Last Four Weeks, 2013
Receptivity to Marketing and Advertising
Ads Can Reach Bottled Water Drinkers on Social Media and Cellphones
Table 6-13: Receptivity to Marketing and Advertising on Cellphones and Social Media of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013 Magazines Work Too
Table 6-14: Importance of Magazines of Adults Drinking High Volumes of Bottled Still and Sparkling Waters in Last 7 Days, 2013

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