Table of Contents
Issues in the Market
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- Key themes
- Definition
- Abbreviations
Future Opportunities
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- Cleaning up its image
- Functional means differentiation…
- … but functionality also risks throwing purity out with the bathwater
Market in Brief
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- Consumption linked to consumer confidence
- Bottled water drinkers seriously question its value…
- … despite evidence of clear differentiating advantages
- Overall, the market is retaining its user base
- British brands see short-term spike
Internal Market Environment
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- Key points
- The bottled water backlash
- Bottled water as anti-environment
- Re-framing the debate away from being compared to tap water
- Demand for bottled water is closely tied to consumer confidence
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- Figure 1: Relationship between usage of bottled water and consumer confidence, by quarter, 2004-09
- At the mercy of the British weather
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- Figure 2: Trends in the quality of UK summers, compared to volume sales of bottled water, 2003-09
- Health benefits currently less of a consumer concern than calories
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- Figure 3: Trends in selected statements about healthy lifestyles, 2005-09
Broader Market Environment
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- Key points
- Disposable income declines in the wake of the recession
- A generation lost to bottled water
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- Figure 4: Total population, by age, 2004-14
- Figure 5: Attitudes towards bottled water amongst over-54s compared to all adults, June 2009
- Bottled water losing appeal amongst burgeoning middle class
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- Figure 6: Changes in UK adult population, by socio-economic group, 2004-14
- Figure 7: Attitudes towards bottled water among ABs compared to all adults, June 2009
Competitive Context
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- Key points
- An increasingly competitive marketplace even before the credit crunch
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- Figure 8: Trends in consumption of non-alcoholic drinks, by type, 2004-08
- Non-alcoholic drinks steal share from alcoholic
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- Figure 9: Comparison of total UK value sales for alcoholic and non-alcoholic drinks, 1998-2008
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- The trend for functionality in soft drinks leads to vitamin-enhanced water
- A healthier product – but what about the added sugar?
- A wide range of health claims
- Is enhanced water the future or a dead end?
- The introduction of slimming water
- Vitamin Waters put their faith in wisdom of the crowd
- Using scent to sell
Market Size and Forecast
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- Key points
- Market is closely aligned to consumer confidence
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- Figure 10: Relationship between usage of bottled water, consumer confidence and GDP, by quarter, 2007-09
- Expect the market to grow again, but only modestly
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- Figure 11: Forecast of volume and value sales of total bottled water market (includes plain water, enhanced water and water coolers), 2004-14
- Plain water is victim of commoditisation
- Enhanced water has the most growth potential
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- Figure 12: Forecast of volume and value sales of plain bottled water (including water coolers), 2004-14
- Figure 13: Forecast of volume and value sales of enhanced bottled water (either flavoured or fortified with vitamins/supplements), 2004-14
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- Figure 14: Forecast of proportion of total water value sales made up by plain and enhanced water (water coolers are included in plain figures), 2004-14
- Factors used in the forecast
Market Segmentation
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- Key points
- A shift away from on-premise consumption
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- Figure 15: Forecast of volume and value sales of total bottled water (incl. plain water, flavoured water and water coolers), by channel 2004-09
- Plain carbonated unable to grow its share
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- Figure 16: Volume sales of plain water, by type, 2004-09
- Sales growth of new flavoured functional segment defies recession
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- Figure 17: Forecast of volume sales of flavoured water, by type, 2004-09
Market Share
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- Key points
- A good time to be British
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- Figure 18: Manufacturers shares in UK take-home value sales of bottled water, 2007-09
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- Figure 19: Manufacturers’ estimated shares in take-home value sales of bottled water, 2009
Companies and Products
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- Key point
- Britvic Soft Drinks
- Coca-Cola
- Danone Waters
- Greencore
- Highland Spring
- Nestlé
Brand Elements
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- Key points
- Brand map
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- Figure 20: Attitudes towards and usage of bottled water brands, April 2009
- Brand qualities of bottled water brands
- Evian healthiest, Highland Spring natural, but Drench has youthful cool
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- Figure 21: Personalities of various bottled water brands, April 2009
- Experience of bottled water brands
- Heavy competition, but Danone slightly ahead
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- Figure 22: Consumer usage of various bottled water brands, April 2009
- Brand intentions for bottled water brands
- Loyalty low, competition tight
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- Figure 23: Consideration of various bottled water brands, April 2009
- Brand satisfaction for bottled water brands
- Satisfaction average for most, but Perrier lacking
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- Figure 24: Satisfaction with various bottled water brands, April 2009
- Brand commitment to bottled water brands
- Drench has highest loyalty
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- Figure 25: Commitment to various bottled water brands, April 2009
- Perrier
- What the consumer thinks
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- Figure 26: attitudes towards the Perrier brand, April 2009
- Drench
- What the consumer thinks
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- Figure 27: Attitudes towards the Drench brand, April 2009
- Evian
- What the consumer thinks
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- Figure 28: Attitudes towards the Evian brand, April 2009
Brand Communication and Promotion
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- Key points
- Advertising spend remains steady
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- Figure 29: Main monitored media advertising spend on bottled water, compared to volume sales, 2005-09
- Figure 30: Main monitored media advertising spend on bottled water, % by media channel, 2006-08
- Britvic increases its investment
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- Figure 31: Above-the-line advertising spend, by brands, 2006-08
- The rise of ethical branding
- 2009 sees the return of the Evian babies
Channels to Market
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- Key points
- Market plays into the hands of the supermarkets
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- Figure 32: Estimated volume sales of plain bottled water (incl. water coolers), by outlet type, 2007-09
- Challenging on-premise conditions
Consumer Usage
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- Key points
- 2007 sees beginning of the decline
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- Figure 33: Trends in frequency of drinking bottled water, 2005-09
- Young, and getting younger
- Blue-collar hydration
- Regional rewards
- Still water leaves sparkling behind
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- Figure 34: Trends in types of bottled water drunk most often, 2005-09
- Increased demand for smaller bottles
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- Figure 35: Trends in size of bottled water formats drunk most often, 2005-09
- Kids market parallels the adult
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- Figure 36: Trends in penetration of bottled water among kids and where drunk, 2006-09
How Has Consumption Changed Over the Past Two Years?
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- Key points
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- Figure 37: Changes in consumption of bottled water in the past two years, June 2009
- What are the drivers of change?
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- Figure 38: Net difference* in attitudes towards bottled water amongst those consuming more bottled water and those consuming less in the past two years, June 2009
- Those who drink less (15% of the population)
- Those who drink more (14% of the population)
Consumer Attitudes Towards Bottled Water
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- Key points
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- Figure 39: Attitudes towards bottled water, either still, fizzy or flavoured, June 2009
- Bottled water scores low on value for money
- Purity gives bottled water the edge over tap water
- No calories proves a major selling point
- Practical benefits offer a route into attracting the huge 55+ market
- Environmental concerns have limited effect on consumption habits
- Price dominates motivation to purchase
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- Figure 40: Most important things driving purchase of bottled water, June 2009
- Fuelling an on-the-go youth lifestyle
Targeting Opportunities
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- Key point
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- Figure 41: Marketing groups for bottled water based on attitudes, June 2009
- Seeking Enhancement (15% of bottled water drinkers)
- Needing Reassurance (26% of bottled water drinkers)
- On The Go (26% of bottled water drinkers)
- Unconvinced (33% of bottled water drinkers)
Appendix
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- Consumer research
- ACORN
- Advertising data
Appendix – Broader Market Environment
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- Figure 42: Trends in PDI and consumer expenditure, 2004-14
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Appendix – Brand Communication
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- Figure 43: Above-the-line advertising spend on bottled water, by media type, 2006-08
- Figure 44: Main monitored media advertising expenditure on bottled water, by top 10 companies, 2006-08
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Appendix – Consumer Usage
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- Figure 45: Trend in volume importance index for bottled water drinkers, 2005-09
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Appendix – How Has Consumption Changed in the Past Two Years?
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- Figure 46: Attitudes towards bottled water, either still, fizzy or flavoured, by changes in consumption of bottled water either still, fizzy or flavoured in past two years, June 2009
- Figure 47: Most important things in buying bottled water, by changes in consumption of bottled water either still, fizzy or flavoured in past two years, June 2009
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- Figure 48: Changes in consumption of bottled water either still, fizzy or flavoured in past two years by demographics, June 2009
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Appendix – Consumer Attitudes Towards Bottled Water
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- Figure 49: Attitudes towards bottled water, either still, fizzy or flavoured, by demographics, June 2009
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- Figure 50: Attitudes towards bottled water, either still, fizzy or flavoured, by demographics, June 2009 (continued)
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- Figure 51: Most popular things in buying bottled water, by demographics, June 2009
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- Figure 52: Most popular things in buying bottled water, by demographics, June 2009 (continued)
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- Figure 53: Attitudes towards bottled water, either still, fizzy or flavoured, by changes in consumption of bottled water either still, fizzy or flavoured in past two years, June 2009
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- Figure 54: Most important things in buying bottled water, by changes in consumption of bottled water either still, fizzy or flavoured in past two years, June 2009
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Appendix – Targeting Opportunities
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- Figure 55: The five most important things in buying bottled water, by target groups, June 2009
- Figure 56: Target groups, by demographics, June 2009
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- Figure 57: Changes in consumption of bottled water in the past two years, by target groups, June 2009
- Figure 58: Attitudes towards bottled water, either still, fizzy or flavoured, by target groups, June 2009
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