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Bottled Water - UK - May 2011

Mintel’s bottled water report looks at how the market has fared following its rapid fall from grace from 2007-09. The findings are that, while the market may never reach the heights of 2006, it is surprisingly robust given the economic context, with many perceived advantages over its main competitor tap water.

  • Evian may have shifted away from its purity positioning, but it still a powerful proposition for water brands to use. Mintel’s research shows that 26 million UK adults think that bottled water has less impurities than tap water.
  • Manufacturers can focus on the substantial consumer demand for smaller, easily portable bottles as well as innovations such as packaging which keeps the water chilled longer. This is in light of Mintel’s research showing that buying water for travelling is the most popular occasion to purchase for, with 64% of UK bottled water drinkers doing so.
  • There is a significant opportunity for value water brands and own-label ranges to target C2DE adults. Mintel finds that while less of this group buy bottled water than ABC1s, those that do drink it more frequently because they are more likely to drink it at home. For example, half of C2DE water buyers drink it at home compared to three in five of ABC1s.
  • Mintel’s consumer data highlights the importance of targeting vitamin-enhanced flavoured drinks at young (16-34 year-old) men rather than predominantly at kids, as has often been the case. Young men have helped grow the energy drinks market to around £1 billion and are 25% more likely than bottled water drinkers in general to believe that drinking water with vitamins gives you some benefits.
  • Communication which focuses on the hydration benefits of bottled water, such as Drench’s Brains from Thunderbirds campaign is likely to be particularly successful. When asked what the major benefits of bottled water are, the majority (64%) appreciated that it kept them hydrated throughout the day.
  • The Olympics represents a big opportunity for British water brands: Currently just under half (47%) of all bottled water drinkers prefer to buy British brands where possible, and this has helped Buxton grow its sales by 34% in the take-home channel between 2008 and 2010.

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Market size and forecast for value sales of bottled water, 2005-15
            • Market factors
              • Companies, brands and innovation
                  • Figure 2: Market share for value sales of bottled water brands in the take-home market, 2010
                • The consumer
                  • Figure 3: Attitudes among UK consumers towards bottled water versus tap water, March 2011
                • What we think
                • Issues in the Market

                    • Will the bottled water market ever reach the heights achieved five years ago?
                      • To what extent are consumers switching to tap water and how can this be prevented?
                        • What drives people to buy one bottled water brand over another?
                          • What occasions should bottled water companies target?
                          • Future Opportunities

                              • Transumers
                                • Purity
                                • Internal Market Environment

                                  • Key points
                                    • Bottled water lowers its price point to ensure a better value proposition...
                                      • Figure 4: Changing prices of soft drinks compared to bottled water, 2007-10
                                    • …and despite negative predictions, proves a robust market
                                      • People continue to lead healthier lifestyles
                                        • Figure 5: The most pressing personal concerns among the UK population, February 2011
                                      • Convenience remains as crucial as ever
                                        • The UK climate becomes hotter
                                          • Figure 6: Proportion of bottled water consumed in UK as a share of other selected European countries, 2009
                                          • Figure 7: Annual sunshine hours 2003-10, compared to the 1971-2000 average
                                        • A growing demand for ‘British’ brands
                                          • Figure 8: Trends in consumers’ preference for buying goods produced in their own country, 2006-10
                                        • Environmental/ethical concerns recede
                                          • Figure 9: Trends in agreement with selected lifestyle statements, 2006-10
                                          • Figure 10: Consumer attitudes towards packaging and recycling, July 2009
                                      • Broader Market Environment

                                        • Key points
                                          • Bottled water is at the mercy of the macroeconomic context…
                                            • Figure 11: A comparison of sales of bottled water and consumer expenditure, 2006-10
                                          • …and inflation is putting the squeeze on UK consumers in 2011
                                            • Figure 12: RPI and average weekly earnings, January 2005-February 2011
                                          • However, things should slowly improve from 2012
                                            • Figure 13: Consumer expenditure and its forecast growth, at constant 2010 prices, 2007-15
                                          • Rise in ABC1s fuels trends for premiumisation and convenience
                                            • The importance of connecting with the sceptical older generation
                                              • Figure 14: Growth of the bottled water market compared to the ageing of the over-55 population, 1950-2010
                                          • Competitive Context

                                            • Key points
                                              • Soft drinks market sees steady growth as alcohol consumption wanes
                                                • Figure 15: Volume of soft drinks consumption, 2000-10
                                              • Increased competition within the soft drinks market
                                                • Figure 16: Trends in usage of soft drinks, 2006-10
                                              • Economic downturn changes market dynamics…
                                                • …and leads to a correction in price points
                                                • Strengths and Weaknesses in the Market

                                                  • Strengths
                                                    • Weaknesses
                                                    • Who’s Innovating?

                                                      • Key points
                                                        • Bottled water aims to dispel its environmentally unfriendly image
                                                          • Figure 17: New product development in the bottled water market, by claims, 2008-10
                                                        • A continued drive towards flavoured water
                                                          • Figure 18: New product development in the bottled water market, by sub-category, 2008-10
                                                        • Where flavoured water might end up
                                                          • Enhancing unflavoured water
                                                            • An on-the-go format that allows consumers to add flavour
                                                            • Market Size, Forecast and Segmentation

                                                              • Key points
                                                                • Bottled water sales remain steady after dramatic decline...
                                                                    • Figure 19: Value sales of bottled water, at current and constant 2005 prices, 2005-15
                                                                  • …but price sensitivities will cut into profits
                                                                    • Figure 20: Market size and forecast for value sales of bottled water, 2005-15
                                                                  • Volume sales will start to reverse from 2011
                                                                    • Figure 21: Volume sales of bottled water, 2005-15
                                                                  • Enhanced water has grown its share – but only very incrementally
                                                                    • Figure 22: Value sales of bottled water in the take-home channel, by water type, 2006-10
                                                                  • Forecast methodology
                                                                  • Market Share

                                                                    • Key points
                                                                      • Danone remains dominant despite declining sales
                                                                        • Figure 23: Brand market share of the take-home bottled water market, by value, 2008-10
                                                                      • The rise of mainstream British brands
                                                                        • Value brands flourish
                                                                        • Companies and Products

                                                                          • Key points
                                                                            • Britvic Soft Drinks
                                                                              • Coca-Cola
                                                                                • Danone
                                                                                  • Highland Spring
                                                                                    • Nestlé Waters
                                                                                    • Brand Research

                                                                                      • Brand map
                                                                                          • Figure 24: Attitudes towards and usage of water brands, March 2011
                                                                                        • Brand attitudes
                                                                                          • Figure 25: Attitudes, by water brand, March 2011
                                                                                        • Brand personality
                                                                                          • Figure 26: Water brand personality – macro image, March 2011
                                                                                          • Figure 27: Water brand personality – micro image, March 2011
                                                                                        • Correspondence analysis
                                                                                          • Brand experience
                                                                                            • Figure 28: Water brand usage, March 2011
                                                                                            • Figure 29: Satisfaction with various water brands, March 2011
                                                                                            • Figure 30: Consideration of water brands, March 2011
                                                                                            • Figure 31: Consumer perceptions of current water brand performance, March 2011
                                                                                            • Figure 32: Water brand recommendation – Net Promoter Score, March 2011
                                                                                          • Brand index
                                                                                            • Figure 33: Water brand index, March 2011
                                                                                            • Figure 34: Water brand index vs. recommendation, March 2011
                                                                                          • Target group analysis
                                                                                            • Figure 35: Target groups, March 2011
                                                                                            • Figure 36: Water brand usage, by target groups, March 2011
                                                                                          • Group One – The Conformists
                                                                                            • Group Two – Simply the Best
                                                                                              • Group Three – Shelf Stalkers
                                                                                                • Group Four – Habitual Shoppers
                                                                                                  • Group Five – The Individualists
                                                                                                  • Brand Communication and Promotion

                                                                                                    • Key points
                                                                                                      • Discounting activity comes at the expense of above-the-line expenditure
                                                                                                        • Figure 37: Main monitored media advertising spend on bottled water (in £millions), 2006-10
                                                                                                      • Danone still the biggest brand builder
                                                                                                        • Figure 38: Share of above-the-line advertising spend, by advertisers, 2008-10
                                                                                                        • Figure 39: Above-the-line advertising spend, by brands, 2008-10
                                                                                                    • Channels to Market

                                                                                                      • Key points
                                                                                                        • Take-home takes an increasing share of the profits
                                                                                                          • Figure 40: Volume and value sales of the UK bottled water market, by channel, 2006-10
                                                                                                        • Supermarkets benefit from consumer caution
                                                                                                          • Figure 41: Value sales and share of bottled water, multiples versus impulse sector, 2008-10
                                                                                                        • The on-trade is the next big opportunity
                                                                                                        • Consumer Usage of Bottled Water

                                                                                                          • Key points
                                                                                                            • Bottled water’s pool of users continues to shrink
                                                                                                                • Figure 42: Trends in usage and frequency of drinking bottled mineral water, 2006-10
                                                                                                              • Usage is dominated by ABC1 younger women…
                                                                                                                  • Figure 43: Bottled mineral water drinkers, by gender, age and socio-economic group, 2010
                                                                                                                • …but frequency of consumption is greatest among C2DEs…
                                                                                                                    • Figure 44: Bottled water consumption occasions per month, by gender, age and socio-economic group,, 2010
                                                                                                                  • …due to being more likely to drink bottled water at home
                                                                                                                      • Figure 45: Those who consumed bottled water at home in the past 6 months, by socio-economic group, March 2011
                                                                                                                    • Bottled water is primarily drunk on the go…
                                                                                                                        • Figure 46: Occasions where people purchase bottled water to drink, March 2011
                                                                                                                      • …but in-home/work drinking is much more frequent
                                                                                                                          • Figure 47: Frequency with which people drink bottled water, by selected occasion, July 2010
                                                                                                                        • Younger people especially likely to drink bottled water when out and about
                                                                                                                            • Figure 48: Net difference between occasions when under-45s drink bottled water compared to over-45s, March 2011
                                                                                                                          • The convenience of portability drives preference for small formats
                                                                                                                            • Figure 49: Volume of bottled mineral water drunk most often, 2010*
                                                                                                                          • Does portability apply equally to the home?
                                                                                                                              • Figure 50: Key statements on which bottled water drinkers at home differ from overall bottled water drinkers, March 2011
                                                                                                                            • Sparkling remains a niche sector
                                                                                                                                • Figure 51: Trends in types of bottled mineral water drunk most often, 2006-10
                                                                                                                            • Consumer Attitudes – Bottled Water Versus Tap Water

                                                                                                                              • Key points
                                                                                                                                • Convenience is bottled water’s major USP versus tap water…
                                                                                                                                  • Figure 52: Attitudes among UK consumers towards bottled water versus tap water, March 2011
                                                                                                                                • …but half the UK population also think it is purer
                                                                                                                                  • Younger people are particularly sold on bottled water’s health benefits
                                                                                                                                      • Figure 53: Net difference in attitudes towards bottled water compared to tap water, under-45s versus over-45s, March 2011
                                                                                                                                    • C2DEs less concerned about bottled water’s environmental impact
                                                                                                                                        • Figure 54: Attitudes towards bottled water versus tap water, ABC1 versus C2DE adults, March 2011
                                                                                                                                    • General Consumer Attitudes towards Bottled Water

                                                                                                                                      • Key points
                                                                                                                                        • Established rather than niche boutique brands are the most trusted
                                                                                                                                          • Figure 55: General attitudes towards bottled water, March 2011
                                                                                                                                        • An especially opportune time to be big and British
                                                                                                                                            • Figure 56: Net difference in general attitudes towards bottled water, under-45s compared to over-45s, March 2011
                                                                                                                                          • Bottled water remains a compelling proposition in spite of the downturn…
                                                                                                                                            • …due to its convenience...
                                                                                                                                              • …combined with its hydration benefits...
                                                                                                                                                  • Figure 57: Perceived health benefits of bottled water, March 2011
                                                                                                                                                • …and the benefits of its perceived purity
                                                                                                                                                    • Figure 58: Net difference between perceived health benefits of bottled water, by gender, March 2011
                                                                                                                                                  • Eco credentials plus style tap into younger drinkers’ self-consciousness
                                                                                                                                                    • Reasons why own-label is buoyant
                                                                                                                                                      • Fill-ups are hindering frequency of sales
                                                                                                                                                        • There is untapped potential for vitamin-infused water among young men
                                                                                                                                                            • Figure 59: Index of agreement with statements about flavoured/vitamin water, by gender, age and socio-economic group, March 2011
                                                                                                                                                        • Appendix – Broader Market Environment

                                                                                                                                                            • Figure 60: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
                                                                                                                                                            • Figure 61: GDP, PDI, consumer expenditure and savings, at constant 2010 prices, 2005-15
                                                                                                                                                            • Figure 62: GfK NOP Consumer monthly consumer confidence index, January 2007-February 2011
                                                                                                                                                            • Figure 63: Forecast adult population trends, by socio-economic group, 2005-15
                                                                                                                                                            • Figure 64: Trends in the age structure of the UK population, 2005-15
                                                                                                                                                        • Appendix – Brand Research

                                                                                                                                                            • Figure 65: Brand usage, March 2011
                                                                                                                                                            • Figure 66: Brand commitment, March 2011
                                                                                                                                                            • Figure 67: Brand momentum, March 2011
                                                                                                                                                            • Figure 68: Brand diversity, March 2011
                                                                                                                                                            • Figure 69: Brand satisfaction, March 2011
                                                                                                                                                            • Figure 71: Brand attitude, March 2011
                                                                                                                                                            • Figure 72: Brand image - Macro image, March 2011
                                                                                                                                                            • Figure 73: Brand image - Micro image, March 2011
                                                                                                                                                            • Figure 74: Profile of target groups, by demographics, March 2011
                                                                                                                                                            • Figure 75: Psychographic segmentation by Target groups, March 2011
                                                                                                                                                            • Figure 76: Brand usage by Target groups, March 2011
                                                                                                                                                            • Figure 77: Brand index, March 2011
                                                                                                                                                        • Appendix – Brand Communication and Promotion

                                                                                                                                                            • Figure 78: Above-the-line advertising spend, by advertisers, 2008-10
                                                                                                                                                        • Appendix – Consumer Usage

                                                                                                                                                            • Figure 79: Frequency of drinking bottled mineral water, by demographics, 2010
                                                                                                                                                            • Figure 80: Places where bottled water is consumed, by demographics, March 2011
                                                                                                                                                        • Appendix – Consumer Attitudes – Bottled Water Versus Tap Water

                                                                                                                                                            • Figure 81: Agreement with the statement 'Drinking bottled water is more convenient than tap water ie when out and about’, by demographics, March 2011
                                                                                                                                                            • Figure 82: Agreement with the statement 'Drinking bottled water instead of tap water is an unnecessary indulgence’, by demographics, March 2011
                                                                                                                                                            • Figure 83: Agreement with the statement 'Drinking bottled water instead of tap water is bad for the environment’, by demographics, March 2011
                                                                                                                                                            • Figure 84: Agreement with the statement 'Bottled water has fewer impurities than tap water’, by demographics, March 2011
                                                                                                                                                            • Figure 85: Agreement with the statement 'I prefer the taste of bottled water to tap water’, by demographics, March 2011
                                                                                                                                                            • Figure 86: Agreement with the statement 'Bottled water is better for you than tap water’, by demographics, March 2011
                                                                                                                                                            • Figure 87: Agreement with the statement 'Drinking bottled water instead of tap water makes me feel like I’m treating myself’, by demographics, March 2011
                                                                                                                                                            • Figure 88: Agreement with the statement 'I would rather be seen drinking bottled water than tap water’, by demographics, March 2011
                                                                                                                                                        • Appendix – General Consumer Attitudes towards Bottled Water

                                                                                                                                                            • Figure 89: Most popular perceived health benefits of bottled water, by demographics, March 2011
                                                                                                                                                            • Figure 90: Next most popular perceived health benefits of bottled water, by demographics, March 2011
                                                                                                                                                            • Figure 91: Agreement with the statement 'To save money I fill up my bottle with tap water when possible', by demographics, March 2011
                                                                                                                                                            • Figure 92: Agreement with the statement 'I prefer to buy British bottled water brands (eg Highland Spring, Buxton etc) where possible', by demographics, March 2011
                                                                                                                                                            • Figure 93: Agreement with the statement 'The convenience of drinking bottled water on the go makes it worth the money', by demographics, March 2011
                                                                                                                                                            • Figure 94: Agreement with the statement 'I trust the water quality of established brands (eg Evian, Buxton) more than less well-known brands', by demographics, March 2011
                                                                                                                                                            • Figure 95: Agreement with the statement 'Flavoured water is less bad for your health/teeth than the majority of soft drinks', by demographics, March 2011
                                                                                                                                                            • Figure 96: Agreement with the statement 'I believe that drinking water with vitamins in it gives you some health benefits', by demographics, March 2011
                                                                                                                                                            • Figure 97: Agreement with the statement 'If I did not drink bottled water, I would not drink enough water', by demographics, March 2011
                                                                                                                                                            • Figure 98: Agreement with the statement 'Buying more ethical/environmentally friendly bottled water brands makes me feel better about myself', by demographics, March 2011
                                                                                                                                                            • Figure 99: Agreement with the statement 'I am put off flavoured water by its calorie content', by demographics, March 2011
                                                                                                                                                            • Figure 100: Agreement with the statement 'With bottled water brands, you get what you pay for', by demographics, March 2011
                                                                                                                                                            • Figure 101: Agreement with the statement 'I am attracted to bottled water brands with stylish packaging', by demographics, March 2011
                                                                                                                                                            • Figure 102: Agreement with the statement 'I like stylish bottled water brands that not everyone drinks eg Acqua Panna, Isklar', by demographics, March 2011

                                                                                                                                                        Companies Covered

                                                                                                                                                        • AG Barr
                                                                                                                                                        • Alliance Boots
                                                                                                                                                        • Asda Group Ltd
                                                                                                                                                        • Bank of England
                                                                                                                                                        • Barclays Bank plc
                                                                                                                                                        • British Dietetic Association (BDA)
                                                                                                                                                        • British Market Research Bureau (BMRB)
                                                                                                                                                        • British Nutrition Foundation
                                                                                                                                                        • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                        • British Soft Drinks Association
                                                                                                                                                        • Britvic Soft Drinks
                                                                                                                                                        • Cadbury Schweppes Plc
                                                                                                                                                        • Co-operative Group
                                                                                                                                                        • Coca-Cola GB
                                                                                                                                                        • Danone UK Ltd
                                                                                                                                                        • Freeview
                                                                                                                                                        • Gfk NOP
                                                                                                                                                        • Groupe Danone
                                                                                                                                                        • Highland Spring
                                                                                                                                                        • Innocent Drinks Ltd
                                                                                                                                                        • Kantar Media
                                                                                                                                                        • Kraft Foods UK
                                                                                                                                                        • Lidl (UK)
                                                                                                                                                        • mmO2 plc
                                                                                                                                                        • Nestlé S.A.
                                                                                                                                                        • Nestlé UK Ltd
                                                                                                                                                        • Nestlé Waters
                                                                                                                                                        • Office for National Statistics
                                                                                                                                                        • Orange plc (UK)
                                                                                                                                                        • Paul Smith Ltd
                                                                                                                                                        • Pepsi-Cola UK
                                                                                                                                                        • Perrier Vittel UK Ltd
                                                                                                                                                        • Red Bull UK
                                                                                                                                                        • Superdrug Stores Plc
                                                                                                                                                        • T-Mobile (UK) Ltd
                                                                                                                                                        • Tesco Plc
                                                                                                                                                        • Virgin Media Ltd
                                                                                                                                                        • Vodafone Group Plc (UK)

                                                                                                                                                        Bottled Water - UK - May 2011

                                                                                                                                                        £1,995.00 (Excl.Tax)