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Bottled Water - UK - March 2016

Published By :

Mintel

Published Date : Mar 2016

Category :

Bottled Water

No. of Pages : N/A

Bottled water has enjoyed robust growth, benefiting as a low-cost option on the go while incomes were squeezed and boosted by good weather and its sugar-free credentials. The slow growth in real incomes should facilitate growth in spending. However, bottled water risks this prompting trading up to other drinks, highlighting the need for New Product Development to drive engagement.

Table of Content

Overview

What you need to know
Products covered in this Report

Executive Summary

The market
Bottled water sees impressive growth
Figure 1: UK value sales of bottled water, 2010-20
Backlash against sugar in soft drinks continues
Growth in real incomes should facilitate trading up
Companies and brands
Little change in competitive landscape
Figure 2: Leading brands in the UK retail bottled water market, by value share, 2014/15*
Brands dominate bottled water NPD activity
Total adspend continues to climb in 2015
The consumer
Seven in 10 drink bottled water
Figure 3: Frequency of drinking bottled water in the last three months, by type, December 2014 and December 2015
Citrus flavours hold the widest appeal
Figure 4: Interest in bottled water flavours, December 2015
Convenience is key reason for drinking bottled water
Figure 5: Reasons for drinking bottled water instead of tap water, December 2015
Brand is important to just three in 10 buyers
Figure 6: Choice factors for the purchase of bottled water, December 2015
Lighter carbonation and flavouring has potential
Figure 7: Preferences with regards to bottled water, December 2015
Seven in 10 are interested in supermarket recycling schemes
Figure 8: Attitudes towards bottled water, December 2015
What we think

Issues and Insights

Functional water has growth potential among Millennials
The facts
The implications
Convenience continues to warrant focus
The facts
The implications
Flavoured water suffers from doubts over healthiness
The facts
The implications

The Market – What You Need to Know

Bottled water sees impressive growth
Retail bottled water growth slows down
Backlash against sugar in soft drinks continues
Growth in real incomes but still a focus on price
Warm summers boost bottled water demand

Market Size and Forecast

Bottled water sees impressive growth
Figure 9: UK value and volume sales of bottled water, 2010-20
Forecast
Figure 10: UK value sales of bottled water, 2010-20
Figure 11: UK volume sales of bottled water, 2010-20
Forecast methodology

Market Segmentation

Retail bottled water growth slows down
Sparkling water growth lags behind
Glacéau Smartwater boosts fortified water sales
Figure 12: UK value and volume retail sales of bottled water, by segment, 2013-15
On-premise share continues to fall
Figure 13: UK value and volume sales of bottled water, by retail and on-premise, 2010-15

Market Drivers

Backlash against sugar in soft drinks
Growth in real incomes but still a focus on price
Taste and quality of tap water influence demand for bottled water
Warm summers boost bottled water demand
Figure 14: UK hours of sunshine, by month, January 2011-February 2016
Ageing population poses a challenge for bottled water
Figure 15: Trends in the age structure of the UK population, 2010-20
Growing child population creates opportunities for water

Companies and Brands – What You Need to Know

Little change in competitive landscape
Danone and Nestlé take nearly half of value retail sales
Bottled water launches drop in 2015
Brands dominate bottled water NPD activity
Total adspend continues to climb in 2015
Danone focuses adspend on Volvic

Market Share

Overall market growth sees shares remain stable
Glacéau sees impressive growth
Figure 16: Leading brands’ sales and shares in the UK bottled water retail market, by value and volume, 2013/14 and 2014/15
Danone and Nestlé take nearly half of value sales
Smaller manufacturers see notable growth
Figure 17: Leading manufacturers’ sales and shares in the UK bottled water retail market, by value and volume, 2013/14 and 2014/15

Launch Activity and Innovation

Bottled water launches drop in 2015
Figure 18: Share of new bottled water product launches in the UK non-alcoholic drinks market, 2011-15
Brands dominate bottled water NPD activity
Figure 19: Share of NPD in the UK bottled water market, branded vs own-label, 2011-15
Figure 20: Share of NPD in the UK bottled water market, by top 10 companies (sorted by 2015), 2011-15
Other selected branded launches
Environmentally friendly packaging and health claims continue to grow
Figure 21: Top 10 claims made by bottled water brands – Unflavoured water, 2011-15
Figure 22: Top 10 claims made by bottled water brands – Flavoured water, 2011-15
Lemon and lime is the most common flavour blend
Figure 23: Top 10 flavour blends in the flavoured water category (ordered by 2015), 2011-15

Advertising and Marketing Activity

Total adspend continues to climb in 2015
Figure 24: Total above-the line, online display and direct mail advertising expenditure on bottled water, by category, 2012-15
Nestlé becomes biggest spender on ad space in 2015
Figure 25: Total above-the line, online display and direct mail advertising expenditure on bottled water, by top 5 advertisers (sorted by 2015), 2012-15
Danone focuses adspend on Volvic
Volvic Mineral Water tie-in with The Force Awakens
Glacéau scales back adspend on Smartwater
Dry January is targeted by Glacéau Smartwater and Evian
Figure 26: Total above-the line, online display and direct mail advertising expenditure on bottled water, by top 10 brands (sorted by 2015), 2012-15
Highland Spring doubles adspend with ‘Everyone for Tennis’
Nielsen Media Research coverage

The Consumer – What You Need to Know

Seven in 10 drink bottled water
Millennials and people in urban areas are core users
Citrus flavours hold the widest appeal
Convenience is key reason for drinking bottled water
Brand is important to just three in 10 buyers
Added vitamins and minerals appeal to Millennials
Lighter carbonation and flavouring has potential
Seven in 10 are interested in supermarket recycling schemes
Flavoured water suffers from doubts over healthiness

Usage of Bottled Water

Seven in 10 drink bottled water
Figure 27: Frequency of drinking bottled water in the last three months, by type, December 2014 and December 2015
Millennials are the core users of bottled water
Figure 28: Usage of different types of bottled water at least once a week in the last three months, by age, December 2015
Bottled water usage skewed towards urban areas
Figure 29: Usage of different types of bottled water at least once a week in the last three months, by urban vs rural location, December 2015

Interest in Bottled Water Flavours

Citrus flavours hold the widest appeal
Figure 30: Interest in bottled water flavours, December 2015
Exotic flavours have potential
Herbal flavours can take inspiration from teas
Dessert flavours can be explored through limited editions

Reasons for Drinking Bottled Water over Tap Water

Convenience is key reason for drinking bottled water
Convenience also warrants a focus at home
Figure 31: Reasons for drinking bottled water instead of tap water, December 2015
Three in 10 prefer the taste of bottled water
Younger users most likely to think bottled water is healthier

Choice Factors for the Purchase of Bottled Water

Brand is important to just three in 10 buyers
Figure 32: Choice factors for the purchase of bottled water, December 2015
Country of origin holds limited sway
Added vitamins and minerals appeal to Millennials
Vitamin and flavour releasing caps interest 16-24-year-olds
Space for functional waters to target exercise

Bottled Water Preferences

Lighter carbonation and flavouring has potential
Figure 33: Preferences with regards to bottled water, December 2015
One in three prefer smaller bottles
Space for more visually appealing bottles

Attitudes towards Bottled Water

Seven in 10 are interested in supermarket recycling schemes
TerraCycle provides cues for return packaging
Figure 34: Attitudes towards bottled water, December 2015
Flavoured water suffers from doubts over healthiness
Branded water refilling stations have potential with students
Whole ingredients could add differentiation to flavoured water

Appendix – Data Sources, Abbreviations and Supporting Information

Abbreviations
Definitions
Consumer research methodology

Appendix – Market Size and Forecast

Forecast methodology
Best- and worst-case forecast
Figure 35: UK value sales of bottled water, best- and worst-case forecast, 2015-20
Figure 36: UK volume sales of bottled water, best- and worst-case forecast, 2015-20

List of Table

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