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Water Filtration - US - November 2015

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Sales have fallen from 2010-15, with water filters posting steep declines
Figure 1: Sales of water filtration products, by segment, at current prices, 2013 and 2015
Bottled water competes with filtered water and has shown strong growth
Barriers to usage range from adequate tap water to the cost of water filters
Figure 2: Select barriers to use of water filtration devices, August 2015
Figure 3: Select concerns of water filtration products, August 2015
The opportunities
Dynamic, growing demographic groups are top users of water filtration products
Figure 4: Any ownership of water filtration products, by millennials, Asians, and Hispanics, August 2015
Benefits to usage include heath, taste, saving money, and being eco-friendly
Figure 5: Top five reasons for owning water filtration products, August 2015
High interest in a range of innovations suggests growth opportunities
Figure 6: Interest in select product innovations, by millennials and Hispanics, August 2015
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Sales have fallen from 2010-15, declines projected to continue
Bottled water offers steep competition
Safety and taste issues with tap water can drive water filtration usage
Growth in Millennial, Asian, and Hispanic populations should drive sales
MARKET SIZE AND FORECAST
Sales decline for the third consecutive year
Prospects for growth lie with Millennials, Hispanics, and Asians
Figure 7: Total US sales and fan chart forecast of water filtration products, at current prices, 2010-20
Figure 8: Total US sales and forecast of water filtration products, at current prices, 2010-20
MARKET BREAKDOWN
Despite being largest segment, water filters see market share shrink
Filter sales projected to decline through 2020, devices to grow modestly
Figure 9: Sales of water filtration products, by segment, at current prices, 2013 and 2015
Figure 10: Total US sales and forecast of water filtration products, by segment, at current prices, 2010-20
Other retail channels account for 90% of water filtration sales
Figure 11: Total US sales of water filtration products, by channel, at current prices, 2013 and 2015
MARKET PERSPECTIVE
Bottled water competes on many fronts with water filtration products
Top users of bottled water also over index for water filtration usage
Interest in sparkling and enhanced water shape opportunities
Refrigerator or house-wide filters can limit water filtration device usage
Figure 12: Water filtration system ownership and interest, August 2015
MARKET FACTORS
Concerns about tap water drive water filtration usage
Growth in Millennial population should be a positive driver
Figure 13: Any ownership of select water filtration products, by generations, august 2015
Figure 14: population by generations, 2010-20
Millennials concerns, interests and tech-friendly habits will shape market
Hispanic and Asian population growth should also drive market
Figure 15: Any ownership of water filtration products, by race and Hispanic origin, august 2015
Figure 16: population by race and Hispanic origin, 2010-20
KEY PLAYERS – WHAT YOU NEED TO KNOW
Largest suppliers – Clorox and Helen of Troy – see MULO sales fall
New pitchers and filter indicators among Brita and PUR innovations
ZeroWater Technologies and Keurig Green Mountain grow share
More smart devices and embedded technology lie ahead
MANUFACTURER SALES OF WATER FILTRATION PRODUCTS
Clorox and Helen of Troy hold 78% market share, but see sales fall
Private label products are a growing market force
A few smaller suppliers build greater share of MULO sales
Manufacturer sales of water filtration products
Figure 17: MULO sales of water filtration products, by leading companies, rolling 52 weeks 2014 and 2015
WHAT’S WORKING?
Brita innovates around product design
PUR’s “Ultimate” and “PUR Plus” pitchers incorporate new features
Filtering integrated into Keurig brewing system post strong sales
ZeroWater Technologies touts superior performance, shares information
Figure 18: ZeroWater Television ad, comparison with brita, october 2014
WHAT’S STRUGGLING?
Brita and PUR water filters are losing share to private label filters
3M Filtrete devices and filters post declining MULO sales
WHAT’S NEXT?
Imbedded technology and automatic replenishment services
High-end filters integrated into connected refrigerators, brewers
Stylish, eco-friendly, high-end, and high-tech filtered water bottles
Seventh Generation’s stylish, fun, eco-friendly bobble
Black+Blum’s retro design with binchotan active charcoal
Tiny Watergizzi for everyday, emergency use and travel
ZeroWater Technologies new tumbler model with filter indicator
Figure 19: ZeroWater tumbler ad, november 2014
THE CONSUMER – WHAT YOU NEED TO KNOW
Younger adults, parents, and multicultural consumers represent core user
Health, taste, cost, and eco-friendliness motivate usage
Built-in filter system owners value space-saving and cost efficiency
High interest in a range of innovations suggests growth opportunities
Customers seek ease of use, ease of cleaning, and best water taste
OWNERSHIP AND INTEREST IN WATER FILTRATION PRODUCTS
Almost six in 10 own filtration products, with pitchers most widely owned
Figure 20: Water filtration product ownership and interest, August 2015
Ownership of water filtration products peaks among those aged 18-34
Figure 21: Any ownership of water filtration products, by age and parental status, august 2015
Hispanics over index for the full range of water filtration devices
Asians report high usage of pitchers and water bottles
Figure 22: Any ownership of water filtration products, by race and Hispanic origin, august 2015
REASONS FOR OWNING WATER FILTRATION PRODUCTS
Top factors driving water filtration ownership are health and taste
Figure 23: Reasons for owning water filtration products, August 2015
18-34-year-olds place high value on cost and eco-friendliness
Figure 24: Reasons for owning water filtration products, by age and by Hispanic origin, August 2015
Hispanics also use filtered water for cooking and beverage making
ATTITUDES TOWARD WATER FILTRATION SYSTEMS
Water systems valued for saving shelf-space and money
Figure 25: Attitudes toward water filtrations systems, August 2015
Consumers aged 45+ have more positive attitudes toward systems
Figure 26: Attitudes toward water filtration systems, by age, August 2015
ISSUES AND CONCERNS
A majority find filtered water healthier and better tasting
Figure 27: Select issues and concerns with tap water and filtered water, by age, Hispanic origin, and parental status, August 2015
“Clean enough to drink” tap water creates barrier to usage
Figure 28: Issues and concerns with tap water and filtered water, August 2015
Focus on health, value, and overall savings could temper cost concerns
Figure 29: Concerns about cost and safety of water filtration products, August 2015
More information on features and models could boost usage
Figure 30: Concerns with water filtration products and systems, August 2015
Top demographics for filtration products more likely to have issues
Figure 31: Concerns about cost and safety of water filtration products, by age, Hispanic origin, and parental status, August 2015
INTEREST IN PRODUCT INNOVATIONS
Millennials and parents show high interest in bottles with added features
Figure 32: Interest in portable water bottle innovations, August 2015
Figure 33: Interest in portable water bottle innovations, by age and parental status, August 2015
Interest in sustainable materials, drink mixes or decorative pitchers
Figure 34: Interest in pitcher/carafe innovations, August 2015
Figure 35: Interest in pitcher/carafe innovations, by age and parental status, August 2015
Indicators showing need for filter replacement are valued features
Figure 36: Interest in filter innovations, August 2015
Figure 37: Interest in filter innovations, by age, Hispanic origin, parental status, August 2015
Millennials and parents want smart technology in refrigerator filters
Figure 38: Interest in refrigerator water filtration systems, August 2015
Figure 39: Interest in refrigerator water filtration systems, by age and parental status, August 2015
PURCHASE INFLUENCERS
Ease-of-use, ease of cleaning, and superior taste are top influencers
Figure 40: Water filtration product purchase influencers, August 2015
Figure 41: Water filtration product purchase influencers ranked as very important, by age, Hispanic origin and parental status, August 2015
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
APPENDIX – MARKET
Market size and segment performance
Figure 42: Total US sales and forecast of water filtration products, at inflation-adjusted prices, 2010-20
Figure 43: Total US sales and forecast of water filters, at inflation-adjusted prices, 2010-20
Figure 44: Total US sales and forecast of water filtration devices, at inflation-adjusted prices, 2010-20
Figure 45: Sales of water filtration products, by segment, at current prices, 2013 and 2015
Market factors
Figure 46: Generations, by race and hispanic origin, 2015
APPENDIX – KEY PLAYERS
Manufacturer sales of water filters
Figure 47: MULO sales of water filters, by leading companies and brands, rolling 52 weeks 2014 and 2015
Manufacturer sales of water filtration devices
Figure 48: MULO sales of water filtration devices, by leading companies and brands, rolling 52 weeks 2014 and 2015
APPENDIX – CONSUMER
CHAID methodology
Analysis suggests granular marketing opportunities for key innovations
Figure 49: Product innovations – CHAID – Tree output, August 2015
Figure 50: Product innovations – CHAID – Table output, August 2015
Figure 51: Product innovations – CHAID – Table output, August 2015

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