Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
Executive Summary
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- Market at a glance—set to experience slower growth during 2008-13
- Growing concern about the safety of bottled water; tap water gaining popularity
- Bottled water and environmentalism; economy and health scare are more likely to influence consumers
- Convenience/PET segment continues to dominate despite consumer backlash against plastic waste
- Demographic influences
- Top four manufacturers account for 70% of total sales, but receive tough competition from private labels
- Supermarkets drive growth due to the heavy presence of private labels
- Growth in the number of bottled water users
- On-the-go convenience is the top desired attribute
- Tap water and price are the biggest reasons people do not drink bottled water
Insights and Opportunities
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- Presence of artificial ingredients and added sugar may inhibit enhanced water growth
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- Figure 1: Sugar content in a few bestselling enhanced water brands and comparison with sugar content in other non-alcoholic beverages
- Industry’s carbon footprint-reduction programs need more efforts to impress consumers
- Water bottles made from plant-based plastic on horizon
- Starting a recycling program that benefits consumers may bring both awareness and sales growth
- Make the brand carbon-neutral or carbon-negative; create consumer awareness about such programs
Fast Forward Trends
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- Death of the middle ground
- Private labels squeeze growth out of mid-priced brands
- Consumers find premium bottled water purchases value-added and an affordable luxury in bad economic times
- Market as conversation
- What's it about?
- In bottled water, image is everything; but are marketers including consumers in image-building efforts?
Market Size and Forecast
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- Key points
- Slowing future growth amid declining economy and growing consumer inclination to seek value
- Bottled water sales and forecast
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- Figure 2: Total U.S. sales and forecast of bottled water at current prices, 2003-13
- Figure 3: Total U.S. sales and forecast of bottled water at inflation-adjusted prices, 2003-13
- Wal-Mart sales
Competitive Context
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- Key points
- Tap water is making a comeback…
- …but are bottled water manufacturers competing against tap water?
- Water filtration systems and reusable bottles may pose a big challenge for the bottled water industry
- Consumers become value seekers
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- Figure 4: Trends in average FDMx prices of the top three (plain) convenience/PET bottled water bands and private labels, 2005-08
Segment Performance
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- Key points
- Consumer desire for convenience influences bottled water sales
- Segment sales and forecast
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- Figure 5: FDMx sales and forecast of bottled water, at current prices, by segment, 2003-13
- Convenience/PET gains market share at the expanse of jug/bulk still water
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- Figure 6: U.S. sales of bottled water, by segment, 2006 and 2008
Segment Performance—Convenience/PET Still Water
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- Key points
- Decline in the demand for top branded plain bottled water results in stagnant sales
- Enhanced water aligns with consumer trend towards holistic health; high sugar content may create consumer distrust
- Expansion in claims creates growth opportunities by creating interchangeable options with other beverage segments
- Growing number of players in enhanced water may slow down growth
- Convenient/PET bottles suffer from high carbon footprint image
- Sales and forecast of convenience/PET still water
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- Figure 7: FDMx sales and forecast of convenience/PET still water, 2003-13
Segment Performance—Jug/Bulk Still Water
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- Key points
- Consumer preferences for convenience and economy lead to sales decline
- Jug/bulk still water will benefit from value-added claims
- Private labels command almost half of the segment’s sale
- Sales and forecast of jug/bulk still water
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- Figure 8: FDMx sales and forecast of jug/bulk still water, 2003-13
Segment Performance—Sparkling/Mineral Water
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- Key points
- Hispanics, the key consumers, remain under-targeted
- Position sparkling water as a healthy alternative to soda
- Sales and forecast of sparkling/mineral water
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- Figure 9: FDMx sales and forecast of sparkling/mineral water, 2003-13
Retail Channels
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- Key points
- Supermarkets thrive on promotional pricing, while value channels offer one-stop shopping convenience
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- Figure 10: U.S. sales of bottled water, by retail channel, 2006 and 2008
Retail Channels—Mass and Other
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- Key points
- Increased emphasis on innovation in “other” channels
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- Figure 11: New bottled water product launch at mass merchandise stores, by private-label and national brands, 2005 and 2008
- Growing numbers of retailers in “other” category
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- Figure 12: U.S. sales of bottled water at mass and other channels, 2003-08
Retail Channels—Supermarkets
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- Key points
- Supermarkets increase private labels at the expanse of branded bottled water
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- Figure 13: New bottled water product launches at supermarkets, by private-label and national brands, 2005 and 2008
- Supermarkets should institute recycling programs in alliance with manufacturers
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- Figure 14: U.S. sales of bottled water at supermarkets, 2003-08
Retail Channels—Natural Grocery Stores
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- Key points
- Natural grocery stores exhibit much smaller growth than FDMx; and account for a minuscule share of total sales
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- Figure 15: Natural product supermarket retail sales* of bottled water, at current prices, 2006-08**
- Figure 16: Natural product supermarket retail sales* of bottled water, at inflation-adjusted prices, 2006-08**
- Natural channel sales by segment
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- Figure 17: Natural product supermarket retail sales of bottled water, by segment, 2006 and 2008
- Brand tables
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- Figure 18: Manufacturer brand natural supermarket sales of bottled water, 2006 and 2008
Market Drivers
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- Health and wellness trends bode well for bottled water
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- Figure 19: Attitude towards health, 2004 and 2008
- Figure 20: Reasons for watching/controlling diet, 2004 and 2008
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- Figure 21: Percentage of population who are overweight or obese, 20-74 years of age, 1988-2004
- Americans fall short on vital vitamins and minerals presenting growth opportunities for enhanced bottled water
- Health scare about plastic bottles may thwart bottled water sales
- Growing backlash against bottled water
- Demographic influences
- Women are the key consumers in the market
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- Figure 22: Attitude towards health, by gender, February 2007-March 2008
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- Figure 23: U.S. population of women aged 18 and over, by age, 2003-13
- Children and teens have the potential to drive growth in the market
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- Figure 24: Population of children and teens aged 0-17, by age, 2003-13
- Hispanics offer opportunities in enhanced and mineral water
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- Figure 25: Population, by race and Hispanic origin, 2003-13
Companies and Brands
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- Key points
- Top four manufacturers account for nearly 70% market share, but exhibit decline
- Private labels gain on the strength of value proposition
- Small manufacturers drive growth through differentiation
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- Figure 26: FDMx sales of leading bottled water companies, 2007 and 2008
Brand Share—Convenience/PET Still Water
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- Key points
- Top-selling (plain) bottled water and fruit juice brands launch enhanced water line extensions
- Fruit juice brands enter bottled water category through fruit juice-enhanced bottled water
- Enhanced bottled water brands experience growing competition
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- Figure 27: Television ad Propel, 2008
- Enhanced water brands broaden functional claims to benefit sales through interchangeable options
- Private labels gain from top (plain) bottled water brands
- Premium brands show mixed performance
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- Figure 28: FDMx brand sales of convenience/PET still water in the U.S., 2007 and 2008
Brand Share—Jug/Bulk Still Water
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- Key points
- Private-label brands dominate the segment; most branded jug/bulk sales decline
- Brands presenting differentiation experience growth; launch of functional water in jug/bulk segment may drive growth
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- Figure 29: FDMx brand sales of jug/bulk still water in the U.S., 2007 and 2008
Brand Share—Sparkling/Mineral Water
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- Key points
- Private labels command the biggest market share, but on decline
- San Pellegrino—the only premium brand to experience growth in 2008
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- Figure 30: FDMx brand sales of sparkling/mineral water in the U.S., 2007 and 2008
Brand Qualities
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- Top bottled water purveyors inundate bottled water aisle with brands and line extensions at multiple price points
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- Figure 31: Various line and brand extensions at different prices points from major manufacturers in FDMx, 2006 and 2008
Innovation and Innovators
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- Strong pace of innovation in 2008
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- Figure 32: Trends in numbers of new product introductions in bottled water market in the U.S., 2003-08*
- Top claims in new bottled water products in the U.S.
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- Figure 33: Top claims in new bottled water products, 2005-08*
- Top trends and insights
- Establishing provenance
- Functional benefits claims rise to compete better with other non-alcoholic beverages
- Bottled water as a weight-loss and energy-boost aid and more
- Global new bottled water products geared towards weight loss, satiety, and more
- Functional products targeting general wellness and specific health benefits in the U.S.
- Bottled water promoting beauty benefits—U.S.
- Global bottled water brands positioned as beauty aid incorporate collagen and bioactive protein
- Packaging innovations seek to reduce carbon footprints and provide (functional) convenience in the U.S.
- Functional packaging adds interest as well as convenience
- Unflavored bottled water dominates the market
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- Figure 34: Top flavors in bottled water launches in the U.S., 2006-08*
- Kids-targeted products
Advertising and Promotion
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- Overview
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- Figure 35: Media spending from Coca-Cola and PepsiCo on select bottled water brands, 2006 and 2007
- Coca-Cola injects marketing dollars in Glacéau
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- Figure 36: Glacéau and LeBron James, television ad, 2008
- Nestlé communicates its “green” positioning; using 30% less plastic
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- Figure 37: Deer Park, pro-environment bottles, 2008
- PepsiCo’s Propel challenges Glacéau for high calorie count
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- Figure 38: Television ad Propel, 2008
- PepsiCo’s Aquafina reinforces its clean and purified image
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- Figure 39: Aquafina, Purity Guaranteed, television ad, 2008
- PepsiCo’s SoBe Life Water—“thrillicious”; works to attract young adults aged 18-24
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- Figure 40: SoBe Life Water, Thrillicious, television ad, 2008
- Snapple tries to woo young adults through the bold act
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- Figure 41: Snapple Antioxidant Water, television ad, 2008
Bottled Water Usage, Frequency and Brand Penetration
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- Figure 42: Trends in personal consumption of bottled water, 2004-08
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- Figure 43: Personal consumption of bottled water carbonated/sparkling and non-carbonated, by gender, age, race/ethnicity, household income, presence of children and region, April 2007-June 2008
- Non-carbonated bottled water and sparkling bottled water consumption by flavored/unflavored
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- Figure 44: Preference for flavored or unflavored non-carbonated and sparkling water, 2004-08
- Trends in frequency of drinking bottled water
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- Figure 45: Trends in the frequency of drinking non-carbonated bottled water, 2004-08
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- Figure 46: Trends in the frequency of drinking sparkling bottled water, 2004-08
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- Figure 47: Mean number of glasses of bottled water drunk in last 30 days, carbonated vs sparkling, by gender, age, race/ethnicity, household income, presence of children and region, April 2007-June 2008
- Bottled water consumption by form of packaging
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- Figure 48: Incidence of drinking bottled water, by form of packaging, by gender, age, race/Hispanic origin and presence of children, April 2007-June 2008
- Non-carbonated bottled water consumption: brands vs. tap and filtered water
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- Figure 49: Incidence of drinking non-carbonated bottled water, brands vs. tap water, by age, September 2008
- Mean frequency of drinking non-carbonated bottled water: brands vs. tap water
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- Figure 50: Mean frequency of drinking non-carbonated bottled water, brands vs. tap water, by gender, September 2008
- Non-carbonated and sparkling bottled water consumption by brands
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- Figure 51: Top 10 brands of non-carbonated bottled water, by age, April 2007-June 2008
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- Figure 52: Incidence of drinking top 10 brands of sparkling/seltzer/natural soda, 2004 and 2008
- Bottled water consumption among teens
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- Figure 53: Trends in teens’ consumption of bottled water, 2004-08
- Teen non-carbonated bottled water and sparkling bottled water consumption by flavored/unflavored
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- Figure 54: Teens preference for flavored or unflavored non-carbonated and sparkling water, 2004-08
- Trends in frequency of drinking bottled water among teens
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- Figure 55: Trends in the frequency of drinking non-carbonated and sparkling bottled water among teens, 2004-08
- Trends in teens bottled water consumption by place
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- Figure 56: Where teens drink bottled water, 2004-08
- Teen non-carbonated and sparkling bottled water consumption by brands
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- Figure 57: Top 10 brands of non-carbonated bottled water, by incidence of teens drinking, April 2007-June 2008
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- Figure 58: Top 10 brands of sparkling/seltzer/natural soda, by incidence of teens drinking, April 2007-June 2008
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Enhanced Water: Consumption and Desirable Attributes
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- Figure 59: Incidence of drinking enhanced water, by type, by age, September 2008
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- Figure 60: Incidence of drinking enhanced water, by type, by race/Hispanic origin, September 2008
- Figure 61: Incidence of drinking enhanced water, by type, by presence of children, September 2008
- Purchase-driving attributes in enhanced water
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- Figure 62: Purchase-driving attributes in enhanced water, by age, September 2008
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Attitudes and Behaviors
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- Reasons for buying or drinking bottled water
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- Figure 63: Reasons for buying or drinking bottled water, by age, September 2008
- Figure 64: Reasons for buying or drinking bottled water, by race/Hispanic origin, September 2008
- Important attributes and brand preference in bottled water purchase
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- Figure 65: Important attributes and brand preference in bottled water, by gender, September 2008
- Bottled water and environmental concerns
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- Figure 66: Bottled water consumption and environmental concerns, by age, September 2008
Reasons for not Drinking Bottled Water
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- Figure 67: Reasons for not drinking bottled water, by presence of children, September 2008
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Cluster Analysis
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- Discriminating Drinkers
- Who they are
- Opportunity
- Enhanced Imbibers
- Who they are
- Opportunity
- Simple Sippers
- Who they are
- Opportunity
- Cluster characteristics
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- Figure 68: Bottled water clusters, September 2008
- Figure 69: Incidence of drinking bottled water, by form of packaging and by type, by bottled water clusters, September 2008
- Figure 70: Reasons for buying or drinking bottled water, by bottled water clusters, September 2008
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- Figure 71: Bottled water consumption and environmental concerns, by bottled water clusters, September 2008
- Figure 72: Incidence of drinking enhanced water, by type, by bottled water clusters, September 2008
- Cluster demographics
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- Figure 73: Bottled water clusters, by gender, September 2008
- Figure 74: Bottled water clusters, by age, September 2008
- Figure 75: Bottled water clusters, by household income, September 2008
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- Figure 76: Bottled water clusters, by race, September 2008
- Figure 77: bottled water clusters, by Hispanic origin, September 2008
- Cluster methodology
Custom Consumer Groups
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- Women aged 18-34 are key consumers for non-carbonated water
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- Figure 78: Incidence of purchasing bottled water, by type, by gender and age, April 2007-June 2008
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- Figure 79: Reasons for buying or drinking bottled water, by gender and age, September 2008
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- Figure 80: Important attributes and brand preference in bottled water, by gender and age, September 2008
IRI/Builders Panel Data: Key Household Purchase Measures
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- Overview of bottled water
- Convenience/PET still water
- Consumer insights on key purchase measures—convenience/PET still water
- Brand map
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- Figure 81: Brand map, selected brands of convenience/PET still water, buying rate by household penetration, 2007*
- Brand leader characteristics
- Key purchase measures
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- Figure 82: Key purchase measures for the top brands of convenience/PET still water, by household penetration, 2007*
- Bulk still water
- Consumer insights on key purchase measures—bulk still water
- Brand map
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- Figure 83: Brand map, selected brands of bulk still water, by buying rate and household penetration, 2007*
- Brand leader characteristics
- Key purchase measures
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- Figure 84: Key purchase measures for the top brands of bulk still water, by household penetration, 2007*
- Sparkling/mineral water
- Consumer insights on key purchase measures—sparkling/mineral water
- Brand map
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- Figure 85: Brand map, selected brands of sparkling/mineral water, by buying rate and household penetration, 2007*
- Brand leader characteristics
- Key purchase measures
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- Figure 86: Key purchase measures for the top brands of sparkling/mineral water, by household penetration, 2007*
Appendix: Other Useful Consumer Tables
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- Non-carbonated bottled water consumption: brands vs. tap water
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- Figure 87: Incidence of drinking non-carbonated bottled water, brands vs. tap water, by gender, September 2008
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- Figure 88: Incidence of drinking non-carbonated bottled water, brands vs. tap water, by race/Hispanic origin, September 2008
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- Figure 89: Incidence of drinking non-carbonated bottled water, brands vs. tap water, by household income, September 2008
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- Figure 90: Incidence of drinking non-carbonated bottled water, brands vs. tap water, by region, September 2008
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- Figure 91: Incidence of drinking non-carbonated bottled water, brands vs. tap water, by presence of children, September 2008
- Mean frequency of drinking non-carbonated bottled water: brands vs. tap water
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- Figure 92: Mean frequency of drinking non-carbonated bottled water, brands vs. tap water, by age, September 2008
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- Figure 93: Mean frequency of drinking non-carbonated bottled water, brands vs. tap water, by race/Hispanic origin, September 2008
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- Figure 94: Mean frequency of drinking non-carbonated bottled water, brands vs. tap water, by household income, September 2008
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- Figure 95: Mean frequency of drinking non-carbonated bottled water, brands vs. tap water, by region, September 2008
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- Figure 96: Mean frequency of drinking non-carbonated bottled water, brands vs. tap water, by presence of children, September 2008
- Enhanced water: Consumption and desirable attributes
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- Figure 97: Purchase-driving attributes in enhanced water, by gender, September 2008
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- Figure 98: Purchase-driving attributes in enhanced water, by race/Hispanic origin, September 2008
- Reasons for buying or drinking bottled water
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- Figure 99: Reasons for buying or drinking bottled water, by gender, September 2008
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- Figure 100: Reasons for buying or drinking bottled water, by presence of children, September 2008
- Important attributes and brand preference in bottled water purchase
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- Figure 101: Important attributes and brand preference in bottled water, by race/Hispanic origin, September 2008
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- Figure 102: Important attributes and brand preference in bottled water, by age, September 2008
- Bottled water and environmental concerns
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- Figure 103: Bottled water consumption and environmental concerns, by gender, September 2008
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- Figure 104: Bottled water consumption and environmental concerns, by race/Hispanic origin, September 2008
Appendix: IRI/Builders Panel Data Definitions
Appendix: Trade Associations
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