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Bottled Water - US - January 2017

Published By :

Mintel

Published Date : Feb 2017

Category :

Bottled Water

No. of Pages : N/A

The bottled water market saw sales increase from 2015-16. Healthy living trends, consumer interest in hydration, as well as the development of new flavored, sparkling, and enhanced bottled water variations have been key drivers. Future growth will hinge on capitalizing on consumer interest in added benefits to bottled water, addressing concerns about cost and environmental impact, and targeting key consumer groups such as 25-34-year-olds, parents, and Hispanics.

Table of Content

Overview

What you need to know
Definition

Executive Summary
Category shows solid growth prospects through 2021
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
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
Figure 3: Reasons for consuming less bottled water, November 2016
The opportunities
Key opportunities lie with 25-34-year-olds, Hispanics, and parents
Figure 4: Same or increased consumption of bottled water, by type and select demographics, November 2016
Diverse motives for drinking bottled water
Figure 5: Motivation for drinking bottled water, November 2016
Diverse benefits show many inroads for growth
Figure 6: Purchase drivers for water consumption, November 2016
What it means

The Market – What You Need to Know
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
Market reaches $16.5 billion in 2016, solid growth forecast through 2021
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
Three major segments make up the bottled water market
Figure 9: Market share of bottled water, 2016
Convenience/PET is largest segment, but sparkling is fast growing
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
Figure 12: Total US retail sales of bottled water, by channel, at current prices, 2014 and 2016

Market Perspective
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
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
Macroeconomic factors support higher spending on bottled water
Figure 13: Consumer confidence and unemployment, 2000-September 2016
Population growth among 25-34-year-olds bodes well for market
Figure 14: US population aged 18+, by age, 2012-22
Younger generations and families will be evermore racially diverse
Figure 15: Population by race and Hispanic origin, 2012-22

Key Players – What You Need to Know
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 Bottle Water
The four largest players together command over half of MULO sales
Private label shows positive growth, smaller suppliers build share
Figure 16: Manufacturer sales of bottled water, 2015 and 2016

What’s Working?
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
Figure 17: Dasani Sparkling Water “Break for Bubbles,” TV ad, July 2016
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
Figure 19: Aquafina Ice Age: Collision Course & Aquafina, TV ad, July 2016

What’s Struggling?
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?
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
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
Consumption strong for a wide range of bottled water products
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
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
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
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
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
Figure 25: “Same or more” consumption of water, by type of water and parental status, November 2016
Hispanics consume more filtered and bottled water
Figure 26: “Same or more” consumption of water, by Hispanic origin, November 2016

Attitudes and Habits Related to Water Consumption
Consumers drink more water to hydrate, replace other beverages
Figure 27: Attitudes and habits related to water consumption, November 2016
Younger consumers seek more varieties of water
Figure 28: Attitudes and habits related to water consumption, by age, November 2016
Parents show enthusiasm for bottled water variety
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
Figure 30: Attitudes and habits related to water consumption, by race/ethnicity, November 2016

Consumption Occasion
Bottled water consumed on its own, on-the-go, with food and exercise
Figure 31: Occasion for water consumption, November 2016
Female consumers drink water at a greater number, range of occasions
Figure 32: Occasion for water consumption, by gender, November 2016
Parents show high usage of water at meals, when exercising
Figure 33: Occasion for water consumption, by parental status, November 2016

Motivation for Drinking Water
Hydration as well as water quality, health, and weight loss drive usage
Figure 34: Reasons for water consumption, November 2016
Younger consumers most likely to be motived by health, weight loss
Figure 35: Reasons for water consumption, by age and gender, November 2016
Parents also motivated by reasons beyond hydration, quenching thirst
Figure 36: Reasons for water consumption, November 2016
Hispanics and Blacks cite many reasons other than hydration
Figure 37: Reasons for water consumption, by race/Hispanic origin, November 2016

Purchase Drivers of Bottled Water
“Natural” water is a priority, but consumers seek many other benefits
Figure 38: Purchase drivers for water consumption, November 2016
Males 18-34 stand out for very high interest in water with added benefits
Figure 39: Purchase drivers for water consumption part 1, by age and gender, November 2016
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
Figure 41: Reasons for water consumption, by parental status, November 2016
Hispanics seek bottled water with a range of added benefits
Figure 42: Reasons for water consumption, by race/Hispanic origin, November 2016

Key Driver Analysis
Methodology
35-44s drink range of water types, motivated by hydration and weight loss
Figure 43: Key drivers of drinking more types of bottled water, October 2016

Purchase Deterrents to Bottled Water Consumption
Using refillable water bottles is top barrier to drinking more bottled water
Figure 44: Reasons for consuming less bottled water, November 2016
Consumers aged 18-34 most likely to use refillable water bottles
Figure 45: Reasons for consuming less bottled water, by age, November 2016
Affluent consumers cite environmental concerns, use refillable bottles
Figure 46: Reasons for consuming less bottled water, November 2016
Parents cut back on bottled water usage for wide range of reasons
Figure 47: Reasons for consuming less bottled water, by parental status, November 2016

Appendix – Data Sources and Abbreviations
Data sources
Sales data
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations

Appendix – Market
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
Figure 51: Average household size, by race and Hispanic origin, 2016
Figure 52: Distribution of generations by race and Hispanic origin, 2017
Figure 53: Median household income, by race and Hispanic origin of householder, 2015

Appendix – Key Players
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
Figure 56: MULO sales of sparkling/mineral water, by leading companies and brands, rolling 52 weeks 2015 and 2016

Appendix – Consumer
Figure 57: Any, same or more consumption of water, by age, November 2016

Appendix – Key Driver Analysis
Interpretation of results
Figure 58: Key drivers of drinking more types of bottled water – Key driver output, October 2016

List of Table

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