Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Category shows solid growth prospects through 2021
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- Figure 1: Total US sales and fan chart forecast of bottled water market, at current prices, 2011-21
- The issues
- Inexpensive alternatives to bottled water are widely available
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- Figure 2: Consumption of water, by type of water, November 2016
- Beverage blurring creates competition from unexpected quarters
- Cost, environmental concerns, and refillable water bottles limit usage
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- Figure 3: Reasons for consuming less bottled water, November 2016
- The opportunities
- Key opportunities lie with 25-34-year-olds, Hispanics, and parents
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- Figure 4: Same or increased consumption of bottled water, by type and select demographics, November 2016
- Diverse motives for drinking bottled water
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- Figure 5: Motivation for drinking bottled water, November 2016
- Diverse benefits show many inroads for growth
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- Figure 6: Purchase drivers for water consumption, November 2016
- What it means
The Market – What You Need to Know
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- Market shows solid growth, tops $16.5 billion in sales
- PET/convenience segment is largest, sparkling water fastest growing
- Tap water quality and alternatives to bottled water shape market context
Market Size and Forecast
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- Market reaches $16.5 billion in 2016, solid growth forecast through 2021
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- Figure 7: Total US sales and fan chart forecast of bottled water market, at current prices, 2011-21
- Figure 8: Total US retail sales and forecast of bottled water, at current prices, 2011-21
Market Breakdown
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- Three major segments make up the bottled water market
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- Figure 9: Market share of bottled water, 2016
- Convenience/PET is largest segment, but sparkling is fast growing
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- Figure 10: Total US retail sales of bottled water, by segment, at current prices, 2014 and 2016
- Figure 11: Total US retail sales and forecast of bottled water, by segment, at current prices, 2016
- “Other retail channels” lead category sales and build share
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- Figure 12: Total US retail sales of bottled water, by channel, at current prices, 2014 and 2016
Market Perspective
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- Water filtration systems offer an alternative to unfiltered tap water
- Other beverages, including soda and juices, compete with bottled water
- Competition from refillable containers and at-home carbonation systems
Market Factors
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- Healthy living, hydration, and weight loss drive water consumption
- Obesity epidemic remains underpinning driver for BFY drinks
- Concern with safety of tap water in context of aging infrastructure
- Macro-economic factors support higher spending on bottled water
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- Figure 13: Consumer confidence and unemployment, 2000-September 2016
- Population growth among 25-34-year-olds bodes well for market
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- Figure 14: US population aged 18+, by age, 2012-22
- Younger generations and families will be evermore racially diverse
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- Figure 15: Population by race and Hispanic origin, 2012-22
Key Players – What You Need to Know
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- Four leaders command 58% share, but smaller players growing fast
- Premium brands, natural flavors, and sparkling water doing well
- Family-friendly packaging, branding, and cross-promotion
- Water with added benefits, new ingredients, and a hybrid nature
- Eco-friendly partnerships and donations to crisis areas
Brand Sales of Bottled Water
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- The four largest players together command over half of MULO sales
- Private label shows positive growth, smaller suppliers build share
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- Figure 16: Manufacturer sales of bottled water, 2015 and 2016
What’s Working?
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- Premium brands and naturally sourced, imported offerings
- Innovation and interest in natural colors, flavors, and ingredients
- Sparkling water sales grow with natural flavors and strong promotion
- Coca-Cola and PepsiCo promote brand extensions in sparkling water category
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- Figure 17: Dasani Sparkling Water “Break for Bubbles,”, TV ad, July 2016
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- Figure 18: Aquafina “In perfect sync” Sparkling Water TV ad, May 2016
- Private label offerings expand into flavored sparkling water category
- Family-friendly packaging, branding, and cross-promotion
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- Figure 19: Aquafina Ice Age: Collision Course & Aquafina, TV ad, July 2016
What’s Struggling?
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- Nestlé – still the largest supplier – sees growth slow and share shrink
- Uneven brand performance in the PET/Still water segment
- In jug/bulk segment, Nestlé loses share to Crystal Geyser and private label
- In sparkling, Nestlé’s sales are stronger, though innovation could bolster position
What’s Next?
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- Water with added benefits, new ingredients, and a hybrid nature
- Botanical extracts for holistic health and probiotics for digestive support
- Sports waters offer energy, electrolytes, and protein
- Water infused with caffeine . . . and alcohol
- Eco-friendly positioning, water stewardships, and strategic partnerships
- Promoting bottled water in areas facing tap water issues
The Consumer – What You Need to Know
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- Penetration is highest for unflavored, non-carbonated bottled water
- Heavily engaged consumers include youth, parents, and Hispanics
- Engaged consumers have varied motivations, seek more added benefits
- Water used for many occasions throughout the day
- “Natural” is the most widely valued attribute in bottled water
- Refillable water bottles, price, and environmental concerns blunt usage
Consumption of Bottled Water
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- Consumption strong for a wide range of bottled water products
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- Figure 20: “Any or more” consumption of water, by type of water, November 2016
- Unflavored, non-carbonated water is “go-to” option with 83% penetration
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- Figure 21: Any consumption and increased consumption of water, by type of water, November 2016
- Majority of 18-34s report drinking more water in past three months
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- Figure 22: “Same or more” consumption of water, by type of water and by age, November 2016
- Women drink more filtered water, while men consume more varieties
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- Figure 23: “Same or more” consumption of water, by type of water and by gender, November 2016
- Household income is a key driver up to the $50K HH income level
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- Figure 24: “Same or more” consumption of water, by type of water and household income, November 2016
- Parents stand out for high consumption of many bottled water variations
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- Figure 25: “Same or more” consumption of water, by type of water and parental status, November 2016
- Hispanics consume more filtered and bottled water
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- Figure 26: “Same or more” consumption of water, by Hispanic origin, November 2016
Attitudes and Habits Related to Water Consumption
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- Consumers drink more water to hydrate, replace other beverages
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- Figure 27: Attitudes and habits related to water consumption, November 2016
- Younger consumers seek more varieties of water
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- Figure 28: Attitudes and habits related to water consumption, by age, November 2016
- Parents show enthusiasm for bottled water variety
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- Figure 29: Attitudes and habits related to water consumption, by parental status, November 2016
- Hispanics often drink more water to cut back on sugar and caffeine
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- Figure 30: Attitudes and habits related to water consumption, by race/ethnicity, November 2016
Consumption Occasion
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- Bottled water consumed on its own, on-the-go, with food and exercise
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- Figure 31: Occasion for water consumption, November 2016
- Female consumers drink water at a greater number, range of occasions
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- Figure 32: Occasion for water consumption, by gender, November 2016
- Parents show high usage of water at meals, when exercising
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- Figure 33: Occasion for water consumption, by parental status, November 2016
Motivation for Drinking Water
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- Hydration as well as water quality, health, and weight loss drive usage
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- Figure 34: Reasons for water consumption, November 2016
- Younger consumers most likely to be motived by health, weight loss
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- Figure 35: Reasons for water consumption, by age and gender, November 2016
- Parents also motivated by reasons beyond hydration, quenching thirst
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- Figure 36: Reasons for water consumption, November 2016
- Hispanics and Blacks cite many reasons other than hydration
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- Figure 37: Reasons for water consumption, by race/Hispanic origin, November 2016
Purchase Drivers of Bottled Water
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- “Natural” water is a priority, but consumers seek many other benefits
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- Figure 38: Purchase drivers for water consumption, November 2016
- Males 18-34 stand out for very high interest in water with added benefits
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- Figure 39: Purchase drivers for water consumption part 1, by age and gender, November 2016
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- Figure 40: Purchase drivers for water consumption, part 2, by age and gender, November 2016
- Parents also very open to water with added benefits and supplements
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- Figure 41: Reasons for water consumption, by parental status, November 2016
- Hispanics seek bottled water with a range of added benefits
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- Figure 42: Reasons for water consumption, by race/Hispanic origin, November 2016
Key Driver Analysis
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- Methodology
- 35-44s drink range of water types, motivated by hydration and weight loss
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- Figure 43: Key drivers of drinking more types of bottled water, October 2016
Purchase Deterrents to Bottled Water Consumption
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- Using refillable water bottles is top barrier to drinking more bottled water
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- Figure 44: Reasons for consuming less bottled water, November 2016
- Consumers aged 18-34 most likely to use refillable water bottles
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- Figure 45: Reasons for consuming less bottled water, by age, November 2016
- Affluent consumers cite environmental concerns, use refillable bottles
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- Figure 46: Reasons for consuming less bottled water, November 2016
- Parents cut back on bottled water usage for wide range of reasons
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- Figure 47: Reasons for consuming less bottled water, by parental status, November 2016
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – Market
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- Figure 48: Total US sales and forecast of bottled water market, at inflation-adjusted prices, 2011-21
- Figure 49: Total US retail sales and forecast of bottled water, by segment, at inflation-adjusted prices, 2011-21
- Figure 50: Total US retail sales of bottled water, by retail channel, at current prices, 2010-20
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- Figure 51: Average household size, by race and Hispanic origin, 2016
- Figure 52: Distribution of generations by race and Hispanic origin, 2017
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- Figure 53: Median household income, by race and Hispanic origin of householder, 2015
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Appendix – Key Players
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- Figure 54: MULO sales of jug/bulk bottled water by leading companies and brands, rolling 52 weeks 2015 and 2016
- Figure 55: MULO sales of convenience/PET still water, by leading companies and brands, rolling 52 weeks 2015 and 2016
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- Figure 56: MULO sales of sparkling/mineral water, by leading companies and brands, rolling 52 weeks 2015 and 2016
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Appendix – Consumer
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- Figure 57: Any, same or more consumption of water, by age, November 2016
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Appendix – Key Driver Analysis
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- Interpretation of results
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- Figure 2: Key drivers of drinking more types of bottled water – Key driver output, October 2016
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