• Global volume sales of bottled water climbed by 6.7% between 2014 and 2015 to reach 193 billion litres, marking the strongest annual growth since 2012

• The sugar backlash continues to benefit consumer demand for bottled water

• Launch activity flourishes in emerging regions, although stricter safety regulations may present challenges for smaller, local brands in future

The global bottled water market continues to enjoy strong growth, with some particularly eye-catching performances in Asia. Volume sales across key global markets climbed 6.7% between 2014 and 2015 to reach 193 billion litres, which is the strongest annual growth since 2012. There are various factors driving this growth. In developed markets like Europe, North America and Australasia, the sugar backlash has seen a migration from carbonated soft drinks and fruit juices to bottled water. For example, nearly six in 10 (57%) German bottled water users were prompted to drink more bottled water in 2015 owing to the sugar content of soft drinks.

Emerging markets continue to inspire growth. China is forecast to account for nearly a quarter of the global market in 2015, having reported an impressive 13% annual growth that year, and Indonesia cemented its position as the fourth largest market by volume with a huge 14% volume growth over the period. The sleeping giant that is India’s bottled water market saw a 14% growth, but from a small base. It remains challenged by one of the lowest per capita consumptions in the world – just 7 litres in 2015 - which is mainly due to low penetration in the country’s vast rural regions. Although the premium end of the market is in growth, it remains challenged by the prevalence of small, cottage industry-operations and popularity of other drinks categories.          

Another driver of global growth is increased levels of launch activity, and it is a sign of the market’s health that 2015 saw more bottled water launches than at any time since since at least 2011. The number of launches in the Asia Pacific, Latin America and Middle East and Africa regions has surged in recent years, as producers capitalise on rising incomes and consumer dissatisfaction with the quality and safety of domestic tap water. Small-scale, local brands continue to emerge in developing bottled water markets providing competition for more expensive global brands. However, as bottled water becomes more prevalent in these regions, it is likely that smaller brands will be forced to adhere to stricter government regulations in the interests of public safety. New standards were introduced to the bottled water industries in China and Saudi Arabia in 2015 and it is likely that other countries will follow.

Brands in both established markets like Europe and developing regions like the Middle East continue to celebrate the provenance of the water source and emphasize the purity to communicate a benefit over tap water and water filtration devices. Category blurring continues to be a vibrant source of innovation, with flavoured and sparkling variants finding widespread popularity as a way of easing the transition from sugary drinks to bottled water.

Figure 4: Top five consumers of bottled water, per capita (litres), 2015*

* Forecast

Source: INEGI, Economist Intelligence Unit, Information Resources, Inc., The Nielsen Company, VDM, Wafg/Mintel

* Please note: the market size data referenced in this report is current as of January 31, 2016