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Bottled Water - UK - March 2013

“Features such as purity, low calorie content and sourcing/origins are all strengths for the bottled water market and operators should not marginalise these in their efforts to make water a more exciting and adventurous market.”
– Chris Wisson, Senior Drinks Analyst
Some questions answered in this report include:

  • What added value features resonate most with users?
  • How can bottled water boost its usage over ‘non-peak’ months?
  • Are health considerations a threat to the flavoured water segment?
  • How can bottled water become a more popular part of kids’ diets?

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Table of contents

  1. Introduction

      • Definitions
        • Natural mineral water
          • Spring water
            • Table water
              • Abbreviations
              • Executive Summary

                  • The market
                    • Figure 1: Forecast of UK value sales of bottled water, 2007-17
                  • Market factors
                    • Affordability helps to keep bottled water competitive
                      • Low consumer confidence remains a threat to the market
                        • Population changes also provide threats, but opportunities as well
                          • Weather and events can also be a shot in the arm for the bottled water market
                            • Companies, brands and innovation
                              • Danone continues to dominate but is under increasing pressure
                                • Figure 2: Value market shares of top-selling bottled water brands in the off-trade, 2012
                              • Flavoured water drives innovation in the market
                                • Above-the-line advertising continues to fall
                                  • The consumer
                                    • Unflavoured still water dominates usage
                                      • Figure 3: Frequency of drinking bottled water, by subcategory, December 2012
                                    • Low prices drive the decision making process
                                      • Hydration and convenience are bottled water’s main strengths
                                        • Figure 4: Users’ attitudes towards bottled water, December 2012
                                      • Flavoured water adds an element of excitement to the market
                                        • Bottled water packaging should now be 100% recyclable
                                          • Figure 5: Users’ attitudes towards bottled water packaging, December 2012
                                        • What we think
                                        • Issues in the Market

                                            • What added value features resonate most with users?
                                              • How can bottled water boost its usage over ‘non-peak’ months?
                                                • Are health considerations a threat to the flavoured water segment?
                                                  • How can bottled water become a more popular part of kids’ diets?
                                                  • Trend Application

                                                      • Mood to Order
                                                        • Transumers
                                                          • Mintel Futures: Brand Intervention
                                                          • Internal Market Environment

                                                            • Key points
                                                              • Bottled water competes well on price
                                                                • Figure 6: Price per 100 ml of selected soft drinks, February 2013
                                                              • A growing discount mentality
                                                                • Figure 7: Attitudes towards the price of groceries, 2008-12
                                                              • Consumers hold mixed attitudes towards recycling…
                                                                • Figure 8: Attitudes towards ethical/environmental considerations, 2008-12
                                                              • … and towards the issue of health
                                                                • Figure 9: Attitudes towards health and wellness, 2008-12
                                                            • Broader Market Environment

                                                              • Key points
                                                                • Consumer confidence remains low amid the economic downturn
                                                                  • Figure 10: Household income vs expenditure per head (£), 2003-12
                                                                  • Figure 11: Consumer Confidence Index, monthly, January 2007-January 2013
                                                                • An ageing population is a threat to the bottled water market…
                                                                  • Figure 12: Projected trends in the age structure of the UK population, 2012-17
                                                                • … however there is potential in appealing to under-35s
                                                                  • C2s may emerge as an increasingly influential group
                                                                    • Figure 13: Changes in the adult socio-economic structure of the UK population, 2012-17
                                                                  • The weather also plays a role in sales of bottled water
                                                                    • Figure 14: Hours of sunshine in the UK, by month, 2008-12
                                                                • Competitive Context

                                                                  • Key points
                                                                    • Bottled water remains under threat from other soft drink categories
                                                                      • Most soft drink markets on the up
                                                                        • Figure 15: Performance of selected drinks markets competing with bottled water, 2008-12
                                                                      • Bottled water remains a small player on the innovation landscape
                                                                        • Figure 16: NPD in the UK non-alcoholic drinks market, by category, 2008-12
                                                                    • Strengths and Weaknesses

                                                                      • Strengths
                                                                        • Weaknesses
                                                                        • Who’s Innovating?

                                                                          • Key points
                                                                            • Bottled water NPD continues to rise
                                                                              • Figure 17: Share of NPD in the UK bottled water market, by subcategory, 2008-12
                                                                            • Own-label share of innovation grows
                                                                              • Figure 18: Share of NPD in the UK bottled water market, branded vs own-label, 2008-12
                                                                            • The greener, the better
                                                                                • Figure 19: NPD in the UK bottled water market, by leading claims over the 2008-12 period
                                                                              • Tapping into Britishness
                                                                                • Manufacturers look to set themselves apart with packaging innovation
                                                                                  • International packaging innovation may provide new ideas
                                                                                    • Innovative explorations into alternative bottle designs
                                                                                      • Going beyond the bottle
                                                                                        • If the cap fits…
                                                                                        • Market Size and Forecast

                                                                                          • Key points
                                                                                            • Bottled water shows small but steady growth
                                                                                              • Figure 20: UK Value and volume sales of bottled water, 2007-17
                                                                                            • Volume sales propped up by heavy promotional activity
                                                                                              • Figure 21: Forecast of UK volume sales of bottled water, 2007-17
                                                                                            • Value sales also well set to continue showing steady growth
                                                                                              • Figure 22: Forecast of UK value sales of bottled water, 2007-17
                                                                                            • Sparkling and flavoured waters achieve gains in 2012
                                                                                              • Forecast methodology
                                                                                              • Market Share

                                                                                                • Key points
                                                                                                  • Danone continues to dominate but is under increasing pressure
                                                                                                    • Figure 23: Value market share of top-selling bottled water brands in the off-trade, 2010-12
                                                                                                  • The Nestlé water charge
                                                                                                    • Own-label provides a threat to the branded market
                                                                                                    • Channels to Market

                                                                                                      • Key points
                                                                                                        • Off-trade sales outperforming the on-trade
                                                                                                            • Figure 24: Off-trade value and volume sales of bottled water, 2007-17
                                                                                                            • Figure 25: On-trade value and volume sales of bottled water, 2007-17
                                                                                                          • Supermarkets leverage their scale
                                                                                                            • Figure 26: Value sales and share of take-home bottled water, multiples versus impulse sector, 2009-11
                                                                                                          • Notable opportunities are still present in the on-trade
                                                                                                          • Companies and Products

                                                                                                            • Britvic/Barr Britvic Soft Drinks
                                                                                                              • Background
                                                                                                                • Product range
                                                                                                                  • Recent activity and innovation
                                                                                                                    • Brand communication and promotion
                                                                                                                      • Coca-Cola
                                                                                                                        • Background
                                                                                                                          • Product range
                                                                                                                            • Recent activity and innovation
                                                                                                                              • Brand communication and promotion
                                                                                                                                • Danone Waters
                                                                                                                                  • Background
                                                                                                                                    • Product range
                                                                                                                                      • Recent activity and innovation
                                                                                                                                        • Brand communication and promotion
                                                                                                                                          • Highland Spring
                                                                                                                                            • Background
                                                                                                                                              • Product range
                                                                                                                                                • Recent activity and innovation
                                                                                                                                                  • Brand communication and promotion
                                                                                                                                                    • Isklar
                                                                                                                                                      • Background
                                                                                                                                                        • Product range
                                                                                                                                                          • Nestlé Waters
                                                                                                                                                            • Background
                                                                                                                                                              • Product range
                                                                                                                                                                • Brand communication and promotion
                                                                                                                                                                • Brand Communication and Promotion

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Bottled water adspend falls again in 2012
                                                                                                                                                                      • Figure 27: Main monitored media advertising spend on bottled water, 2008-12
                                                                                                                                                                    • Summer represents the key period for water advertisers
                                                                                                                                                                      • Figure 28: Advertising expenditure on bottled water, by quarter, 2012
                                                                                                                                                                    • Danone dominates the advertising landscape
                                                                                                                                                                      • Figure 29: Share of above-the-line advertising spend, by top advertisers, 2012
                                                                                                                                                                    • Volvic Touch of Fruit jumps to the top of the pile in 2012
                                                                                                                                                                      • Figure 30: Share of above-the-line advertising spend, by top brands, 2012
                                                                                                                                                                    • Bottled water brands open up to alternative advertising channels
                                                                                                                                                                      • Figure 31: Above-the-line advertising spend, by media channel, 2008-12
                                                                                                                                                                  • Consumer – Usage of Bottled Water

                                                                                                                                                                    • Key points
                                                                                                                                                                      • Unflavoured still water dominates usage
                                                                                                                                                                          • Figure 32: Frequency of drinking bottled water, by subcategory, December 2012
                                                                                                                                                                        • Bottled water usage declines with age
                                                                                                                                                                            • Figure 33: Usage of bottled water weekly or more often, by age, December 2012
                                                                                                                                                                          • Half of bottled water users stick to drinking just one type
                                                                                                                                                                            • Figure 34: Repertoire of types of bottled water used in the past six months, December 2012
                                                                                                                                                                        • Consumer – Choice Factors

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Price still leads the way when buying bottled water
                                                                                                                                                                              • Figure 35: Choice factors when buying bottled water, December 2012
                                                                                                                                                                            • Purity and convenience provide effective points of difference
                                                                                                                                                                              • Many other factors carry surprisingly limited influence when buying
                                                                                                                                                                              • Consumer – Attitudes Towards Bottled Water

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • Hydration and convenience are bottled water’s main strengths
                                                                                                                                                                                    • Figure 36: Users’ attitudes towards bottled water, December 2012
                                                                                                                                                                                  • Staying hydrated is an important consideration for bottled water users…
                                                                                                                                                                                    • Figure 37: Users’ attitudes towards hydration, December 2012
                                                                                                                                                                                  • … along with the ability to drink it on the move
                                                                                                                                                                                    • Figure 38: Users’ attitudes towards the convenience and packaging of bottled water, December 2012
                                                                                                                                                                                  • Price concerns continue to impact upon the market
                                                                                                                                                                                    • Figure 39: Users’ attitudes towards the price of bottled water, December 2012
                                                                                                                                                                                  • Bottled fails to put clear water between itself and tap
                                                                                                                                                                                    • Figure 40: Users’ attitudes towards the qualities of bottled water vs tap water, December 2012
                                                                                                                                                                                  • British brands best placed to appeal to users
                                                                                                                                                                                    • Figure 41: Users’ attitudes towards bottled water brands, December 2012
                                                                                                                                                                                • Consumer – Attitudes Towards Flavoured Water

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • Flavoured waters can bring excitement to drinking water
                                                                                                                                                                                      • Figure 42: Bottled water users’ attitudes towards flavoured water, December 2012
                                                                                                                                                                                    • Health attributes of flavoured waters continue to be questioned by consumers
                                                                                                                                                                                    • Consumer – Attitudes Towards Bottled Water Packaging

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Water bottles should now be 100% recyclable
                                                                                                                                                                                          • Figure 43: Users’ attitudes towards bottled water packaging, December 2012
                                                                                                                                                                                          • Figure 44: Household waste recycling rates, 2000/01-2011/12
                                                                                                                                                                                        • Plastic delivers on portability but falls behind on other attributes
                                                                                                                                                                                          • Figure 45: Attributes associated with glass and plastic bottles, October 2012
                                                                                                                                                                                        • Three quarters of users like to see the water
                                                                                                                                                                                          • Portability is an important consideration for bottled water users
                                                                                                                                                                                            • Interest in innovation could fuel market growth
                                                                                                                                                                                            • Consumer – Target Groups

                                                                                                                                                                                              • Key points
                                                                                                                                                                                                • Three target groups
                                                                                                                                                                                                  • Figure 46: Target groups for bottled water, December 2012
                                                                                                                                                                                                • Enthusiasts (39%)
                                                                                                                                                                                                  • Price-conscious (32%)
                                                                                                                                                                                                    • Sceptics (29%)
                                                                                                                                                                                                    • Appendix – Internal Market Environment

                                                                                                                                                                                                        • Figure 47: Agreement with selected lifestyle statements, by demographics, 2012
                                                                                                                                                                                                        • Figure 48: Attitudes towards selected lifestyle statements, by demographics, 2012 (continued)
                                                                                                                                                                                                        • Figure 49: Attitudes towards selected lifestyle statements, by demographics, 2012 (continued)
                                                                                                                                                                                                    • Appendix – Market Size and Forecast

                                                                                                                                                                                                        • Figure 50: Best- and worst-case forecasts for the total bottled water market, by value, 2012-17
                                                                                                                                                                                                        • Figure 51: Best- and worst-case forecasts for the total bottled water market, by volume, 2012-17
                                                                                                                                                                                                    • Appendix – Brand Communication and Promotion

                                                                                                                                                                                                        • Figure 52: Advertising in the bottled water market, by segment, 2008-12
                                                                                                                                                                                                        • Figure 53: Leading advertisers in the UK bottled water market, 2008-12
                                                                                                                                                                                                        • Figure 54: Leading brands advertised in the UK bottled water market, 2008-12
                                                                                                                                                                                                    • Appendix – Consumer – Usage of Bottled Water

                                                                                                                                                                                                        • Figure 55: Usage of different types of bottled water, December 2012
                                                                                                                                                                                                        • Figure 56: Usage frequency of unflavoured still mineral water, by demographics, December 2012
                                                                                                                                                                                                        • Figure 57: Usage frequency of unflavoured still mineral water, by demographics, December 2012 (continued)
                                                                                                                                                                                                        • Figure 58: Usage frequency of flavoured still mineral water, by demographics, December 2012
                                                                                                                                                                                                        • Figure 59: Usage frequency of unflavoured sparkling mineral water, by demographics, December 2012
                                                                                                                                                                                                        • Figure 60: Usage frequency of flavoured sparkling mineral water, by demographics, December 2012
                                                                                                                                                                                                        • Figure 61: Repertoire for usage of mineral water, December 2012
                                                                                                                                                                                                        • Figure 62: Usage frequency of different types of bottled water, by repertoire of usage, December 2012
                                                                                                                                                                                                    • Appendix – Consumer – Choice Factors

                                                                                                                                                                                                        • Figure 63: Most popular choice factors when buying bottled water, by demographics, December 2012
                                                                                                                                                                                                        • Figure 64: Next most popular choice factors when buying bottled water, by demographics, December 2012
                                                                                                                                                                                                        • Figure 65: Choice Factors when buying bottled water, by weekly usage of different types of bottled water, December 2012
                                                                                                                                                                                                    • Appendix – Consumer – Attitudes Towards Bottled Water

                                                                                                                                                                                                        • Figure 66: Users’ attitudes towards bottled water, December 2012
                                                                                                                                                                                                        • Figure 67: Agreement with the statements ‘Bottled water is a convenient way to keep hydrated during/after exercise’ and ‘Bottled water is easy to carry around when on the move’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 68: Agreement with the statements ‘Drinking bottled water is a good way to reach your recommended daily water intake’ and ‘I would be willing to buy bottled water as part of a lunch ‘meal deal’’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 69: Agreement with the statements ‘Tap water tastes just as good as bottled water’ and ‘Bottled water is purer than tap water’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 70: Agreement with the statements ‘Buying bottled water is an unnecessary expense at the current time’ and ‘I prefer British bottled water brands over those from other countries’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 71: Agreement with the statements ‘I trust the water quality of established brands more than less well-known brands’ and ‘Bottled water is healthier than tap water’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 72: Agreement with the statements ‘I would be more likely to buy bottled water if the packaging was less harmful to the environment’ and ‘I am happy to pay more for bottled water with added benefits’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 73: Users’ attitudes towards bottled water, by choice factors, December 2012
                                                                                                                                                                                                        • Figure 74: Users’ attitudes towards bottled water, by choice factors, December 2012 (continued)
                                                                                                                                                                                                    • Appendix – Consumer – Attitudes Towards Flavoured Water

                                                                                                                                                                                                        • Figure 75: Most popular bottled water users’ attitudes towards flavoured water, by demographics, December 2012
                                                                                                                                                                                                        • Figure 76: Next most popular bottled water users’ attitudes towards flavoured water, by demographics, December 2012
                                                                                                                                                                                                    • Appendix – Consumer – Attitudes Towards Bottled Water Packaging

                                                                                                                                                                                                        • Figure 77: Users’ attitudes towards bottled water packaging, December 2012
                                                                                                                                                                                                        • Figure 78: Agreement with the statements ‘Water bottles should be 100% recyclable’ and ‘I prefer transparent bottles so that I can see the water inside’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 79: Agreement with the statements ‘I would like water bottles to be easier to carry around’ and ‘The labelling on bottles should be clearer’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 80: Agreement with the statements ‘I prefer uncoloured bottles rather than those with coloured tints’ and ‘I prefer screw caps over sports caps’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 81: Agreement with the statements ‘I prefer smaller bottle sizes (250-300ml) to larger ones’ and ‘I would be open to trying bottled water in different formats’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 82: Agreement with the statements ‘I would be interested in bottled waters with caps containing added vitamins/flavours that are released only when the package is opened’ and ‘I think that glass bottles offer a higher quality of water than plastic ones’, by demographics, December 2012
                                                                                                                                                                                                        • Figure 83: Agreement with the statements ‘I think the new lightweight bottled water packaging is too flimsy’ and ‘I would pay more for bottled water with innovative packaging’, by demographics, December 2012
                                                                                                                                                                                                    • Appendix – Consumer – Target Groups

                                                                                                                                                                                                        • Figure 84: Target groups, by demographics, December 2012
                                                                                                                                                                                                        • Figure 85: Usage of different types of bottled water, by target groups, December 2012
                                                                                                                                                                                                        • Figure 86: Choice factors when buying bottled water, by target groups, December 2012
                                                                                                                                                                                                        • Figure 87: Users’ attitudes towards bottled water, by target groups, December 2012
                                                                                                                                                                                                        • Figure 88: Bottled water users’ attitudes towards flavoured water, by target groups, December 2012
                                                                                                                                                                                                        • Figure 89: Users’ attitudes towards bottled water packaging, by target groups, December 2012

                                                                                                                                                                                                    Companies Covered

                                                                                                                                                                                                    • AG Barr
                                                                                                                                                                                                    • Agnes B
                                                                                                                                                                                                    • Britvic Soft Drinks
                                                                                                                                                                                                    • Buxton Foods
                                                                                                                                                                                                    • Coca-Cola GB
                                                                                                                                                                                                    • Competition Commission
                                                                                                                                                                                                    • Danone UK Ltd
                                                                                                                                                                                                    • Facebook, Inc.
                                                                                                                                                                                                    • Gatorade
                                                                                                                                                                                                    • Investec
                                                                                                                                                                                                    • Nestlé UK Ltd
                                                                                                                                                                                                    • Pepsi-Cola UK
                                                                                                                                                                                                    • Perrier Vittel UK Ltd
                                                                                                                                                                                                    • Rubicon Drinks Ltd
                                                                                                                                                                                                    • Strathmore Mineral Water Co Ltd
                                                                                                                                                                                                    • The Feel Good Drinks Company
                                                                                                                                                                                                    • The Prince's Trust

                                                                                                                                                                                                    Bottled Water - UK - March 2013

                                                                                                                                                                                                    £1,995.00 (Excl.Tax)