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Bottled Water - UK - May 2012

“Awareness of the importance of staying hydrated has grown, with more than half of consumers saying that this is an influencing factor when drinking bottled water, either in or out of the home, but there remains a need to remind consumers to increase their consumption.”

– Amy Lloyd, Senior Food and Drink Analyst

Some questions answered in this report include:

  • How can the market boost frequency of usage?
  • How can bottled water brands further leverage the convenience angle?
  • How can British brands leverage provenance to drive sales?
  • How can the market attract the growing group of older consumers?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Sales and forecast of the UK bottled water, by value, 2006-16
            • The future
              • Market factors
                • A growing need to engage the older population
                  • Healthier variants could provide a boost
                    • Fragile consumer confidence to dampen discretionary spend
                      • Companies, brands and innovation
                        • Danone brands dominate the market
                          • Figure 2: Estimated brand shares in the bottled water take-home market, 2011
                        • NPD continues to drive the market
                          • Danone continues to ramp up ad investment
                            • The consumer
                              • Penetration at almost eight in ten consumers
                                • Figure 3: Frequency of drinking bottled water, March 2012
                              • Out-of-home consumption dominates occasions
                                • Figure 4: Occasions for drinking bottled water, March 2012
                              • Hydration of importance to vast majority of consumers
                                • Figure 5: Agreement with statements on bottled water, March 2012
                              • What we think
                              • Issues in the Market

                                  • How can the market boost frequency of usage?
                                    • How can bottled water brands further leverage the convenience angle?
                                      • How can British brands leverage provenance to drive sales?
                                        • How can the market attract the growing group of older consumers?
                                        • Future Opportunities

                                            • Cool Vending
                                              • Moral Brands
                                              • Internal Market Environment

                                                • Key points
                                                  • Water benefits from its competitive pricing within the soft drinks market
                                                    • Figure 6: Price comparison of standalone soft drinks, April 2012
                                                  • Convenience remains a priority for consumers
                                                    • Figure 7: Agreement with the statement ‘Convenience often plays a part in my purchase decisions’, 2007-11
                                                  • Health becomes an everyday focus
                                                    • Interest in environmentally-friendly products wanes
                                                      • Figure 8: Change in attitudes towards selected lifestyle statements, 2007*-11**
                                                    • British brands should look to harness any concerns over the environment
                                                      • Sunshine hours have actually increased
                                                        • Figure 9: Annual sunshine hours 2006-11, compared to the 1971-2000 average
                                                    • Broader Market Environment

                                                      • Key points
                                                        • Sizeable minority of consumers feel ‘OK’ about their financial situation
                                                          • Figure 10: Trends in how respondents would describe their financial situation, Mar 2009-Mar 2012
                                                        • Consumer expenditure is forecast to rise
                                                          • Figure 11: Consumer expenditure and its forecast growth, at constant 2011 prices, 2006-16
                                                        • Demographics changes
                                                          • Changes to UK age structure prove a challenge and an opportunity
                                                            • Figure 12: Trends in the age structure of the UK population, 2006-11 and 2011-16
                                                          • Growth in ABs will aid premiumisation
                                                          • Competitive Context

                                                            • Key points
                                                              • A lucrative market
                                                                • Figure 13: Market value for non-alcoholic drinks*, 2000-10
                                                              • Bottled water threatened by competitive categories
                                                                • Figure 14: Change in usage of non-alcoholic drinks, percentage points, 2007-11
                                                              • Dining out remains a priority
                                                                • Figure 15: Items and activities extra money is spent on, March 2012
                                                            • Strengths and Weaknesses

                                                              • Strengths
                                                                • Weaknesses
                                                                • Who’s Innovating?

                                                                  • Key points
                                                                    • Flavoured water fails to maintain momentum
                                                                      • Figure 16: New product development in the bottled water market, by sub category, 2008-11
                                                                    • Vitamin/mineral fortified flavoured water offers functional benefits
                                                                      • International innovation identifies areas for further development with functional claims
                                                                        • Ethical claims continue to dominate
                                                                          • Figure 17: New product development in the bottled water market, by top five claims, 2009-11
                                                                        • Multipacks aim to offer affordability
                                                                          • Packaging can play a role in premiumisation
                                                                            • British brands look to emphasise provenance
                                                                            • Market Size and Forecast

                                                                              • Key points
                                                                                • Bottled water sales continue to rise
                                                                                  • Figure 18: Value and volume sales of bottled water, 2006-16
                                                                                • The market remains liable to price sensitivity
                                                                                  • Figure 19: Market size and forecast for volume sales of bottled water, 2006-16
                                                                                  • Figure 20: Market size and forecast for value sales of bottled water, 2006-16
                                                                                • Enhanced water continues to gain share
                                                                                  • Figure 21: Value sales of bottled water in the take-home channel, by water type, 2007-11
                                                                                • Forecast methodology
                                                                                • Market Share

                                                                                  • Key points
                                                                                    • Danone continues to lead a crowded market
                                                                                        • Figure 22: Brand market share of the take-home bottled water market, by value, 2009-11
                                                                                      • Buxton and Highland Spring trade on their British credentials
                                                                                        • Consumers still looking for value
                                                                                        • Companies and Products

                                                                                          • Britvic
                                                                                            • Coca-Cola
                                                                                              • Danone
                                                                                                • Highland Spring
                                                                                                  • Isklar
                                                                                                    • Nestlé Waters
                                                                                                    • Brand Research

                                                                                                      • Brand map
                                                                                                          • Figure 23: Attitudes towards and usage of brands in the bottled water sector, February 2012
                                                                                                        • Correspondence analysis
                                                                                                          • Brand attitudes
                                                                                                            • Figure 24: Attitudes, by bottled water brand, February 2012
                                                                                                          • Brand personality
                                                                                                            • Figure 25: Bottled water brand personality – macro image, February 2012
                                                                                                            • Figure 26: Bottled water brand personality – micro image, February 2012
                                                                                                          • Brand experience
                                                                                                            • Figure 27: Bottled water brand usage, February 2012
                                                                                                            • Figure 28: Satisfaction with various bottled water brands, February 2012
                                                                                                            • Figure 29: Consideration of bottled water brands, February 2012
                                                                                                            • Figure 30: Consumer perceptions of current bottled water brand performance, February 2012
                                                                                                            • Figure 31: Bottled water brand recommendation – Net Promoter Score, February 2012
                                                                                                          • Brand index
                                                                                                            • Figure 32: Bottled water brand index, February 2012
                                                                                                            • Figure 33: Bottled water brand index vs. recommendation, February 2012
                                                                                                          • Target group analysis
                                                                                                            • Figure 34: Target groups, February 2012
                                                                                                            • Figure 35: Bottled water brand usage, by target groups, February 2012
                                                                                                          • Group One – Conformists
                                                                                                            • Group Two – Simply the Best
                                                                                                              • Group Three – Shelf Stalkers
                                                                                                                • Group Four – Habitual Shoppers
                                                                                                                  • Group Five – Individualists
                                                                                                                  • Brand Communication and Promotion

                                                                                                                    • Key points
                                                                                                                      • Adspend declines in 2011
                                                                                                                        • Figure 36: Main monitored media advertising spend on bottled water, 2008-11
                                                                                                                      • Second quarter dominates as advertisers shore up awareness for summer
                                                                                                                        • Figure 37: Quarterly distribution of advertising expenditure, 2008-11
                                                                                                                      • Danone continues to dominate spend
                                                                                                                        • Figure 38: Share of above-the-line advertising spend, by top advertisers, 2011
                                                                                                                        • Figure 39: Share of above-the-line advertising spend, by top five brands, 2011
                                                                                                                    • Channels to Market

                                                                                                                      • Key points
                                                                                                                        • Take-home continues to gain share
                                                                                                                          • Figure 40: Volume and value sales of the UK bottled water market, by channel, 2007-11
                                                                                                                        • Supermarkets leverage their scale
                                                                                                                          • Figure 41: Value sales and share of take-home bottled water, multiples versus impulse sector, 2009-11
                                                                                                                        • The on-trade remains an opportunity
                                                                                                                        • Consumer – Usage

                                                                                                                          • Key points
                                                                                                                            • Four in five adults drink bottled water
                                                                                                                                • Figure 42: Frequency of drinking bottled water, March 2012
                                                                                                                              • Usage dominated by the young and the affluent
                                                                                                                                  • Figure 43: Usage of bottled water, by selected demographics, March 2012
                                                                                                                                • Londoners are heaviest drinkers of bottled water
                                                                                                                                  • Figure 44: Usage of bottled water on a ‘heavy*’ basis, by region, March 2012
                                                                                                                                • Over-55s are disengaged with the category
                                                                                                                                  • Figure 45: Frequency of drinking bottled water, by over-55s, March 2012
                                                                                                                                • Majority drink less than six glasses a day
                                                                                                                                    • Figure 46: Volumes of any water drunk on a daily basis, March 2012
                                                                                                                                • Consumer – Occasions

                                                                                                                                  • Key points
                                                                                                                                    • Majority of consumers drink bottled water out of home
                                                                                                                                        • Figure 47: Occasions for drinking bottled water, March 2012
                                                                                                                                      • Older consumers more likely to drink bottled water in-home
                                                                                                                                        • Figure 48: Occasions for drinking bottled water ‘At home’, by age and working status, March 2012
                                                                                                                                      • On-premise consumption appeals most to affluent consumers
                                                                                                                                        • Figure 49: Drinking bottled water in pubs, cafés, restaurants, by socio-economic and income groups, March 2012
                                                                                                                                    • Consumer – Factors Influencing Bottled Water Usage

                                                                                                                                      • Key points
                                                                                                                                        • Hydration is the main selling point for bottled water
                                                                                                                                            • Figure 50: Reasons to drink bottled water at home, March 2012
                                                                                                                                            • Figure 51: Reasons to drink bottled water out of home, March 2012
                                                                                                                                          • In-home drinkers believe in the purity of taste
                                                                                                                                              • Figure 52: Factors influencing reasons to drink bottled water at home, by store used for ‘top-up’ shopping, March 2012
                                                                                                                                            • Convenience and portability are plus points for out-of-home users
                                                                                                                                                • Figure 53: Reasons to drink bottled water out of home, by store used for ‘top-up’ shopping, March 2012
                                                                                                                                              • Potential for on-premise to capture on-the-go consumers
                                                                                                                                                • Benefits over other soft drinks
                                                                                                                                                • Consumer Attitudes Towards Bottled Water

                                                                                                                                                  • Key points
                                                                                                                                                    • Hydration of importance to vast majority of consumers
                                                                                                                                                        • Figure 54: Agreement with statements on bottled water, March 2012
                                                                                                                                                      • Formats aid convenience
                                                                                                                                                          • Figure 55: Agreement with the statements ‘I prefer the convenience of smaller bottles (ie 500 ml or less) to larger bottles (500 ml plus)’ and ‘The convenience of bottled water make it worth paying for’, by presence of own children, March 2012
                                                                                                                                                          • Figure 56: Agreement with the statements ‘I prefer the convenience of smaller bottles (ie 500 ml or less) to larger bottles (500 ml plus)’ and ‘The convenience of bottled water make it worth paying for’, by age, March 2012
                                                                                                                                                        • Environment is still a concern for a sizeable minority
                                                                                                                                                          • Cost remains a potential barrier
                                                                                                                                                            • Bulk buying appeals to the majority of consumers
                                                                                                                                                              • Brand loyalty looks to provenance issue
                                                                                                                                                                • Products with added benefits need to educate consumers
                                                                                                                                                                  • Figure 57: Agreement with statements on health benefits of bottled water, March 2012
                                                                                                                                                              • Targeting Opportunities

                                                                                                                                                                • Key points
                                                                                                                                                                  • Four target groups
                                                                                                                                                                    • Figure 58: Target groups based on attitudes towards bottled water, March 2012
                                                                                                                                                                  • Disengaged (28%)
                                                                                                                                                                    • Advocates (30%)
                                                                                                                                                                      • Exercisers (20%)
                                                                                                                                                                        • Sceptics (22%)
                                                                                                                                                                        • Appendix – Internal Market Environment

                                                                                                                                                                            • Figure 59: Attitudes towards product origin, 2007-11
                                                                                                                                                                            • Figure 60: Attitudes towards selected lifestyle statements, by demographics, 2011
                                                                                                                                                                        • Appendix – Broader Market Environment

                                                                                                                                                                            • Figure 61: Forecast adult population trends, by socio-economic group, 2006-16
                                                                                                                                                                            • Figure 62: Forecast adult population trends, by lifestage, 2006-16
                                                                                                                                                                            • Figure 63: GDP, PDI, consumer expenditure and savings, at constant 2011 prices, 2006-16
                                                                                                                                                                        • Appendix – Market Size and Forecast

                                                                                                                                                                            • Figure 64: Best- and worst-case forecasts for bottled water, by value, 2011-16
                                                                                                                                                                            • Figure 65: Best- and worst-case forecasts for bottled water, by volume, 2011-16
                                                                                                                                                                        • Appendix – Brand Research

                                                                                                                                                                            • Figure 66: Brand usage, February 2012
                                                                                                                                                                            • Figure 67: Brand commitment, by demographic, February 2012
                                                                                                                                                                            • Figure 68: Brand momentum, February 2012
                                                                                                                                                                            • Figure 69: Brand diversity, February 2012
                                                                                                                                                                            • Figure 70: Brand satisfaction, February 2012
                                                                                                                                                                            • Figure 71: Brand recommendation, February 2012
                                                                                                                                                                            • Figure 72: Brand attitude, February 2012
                                                                                                                                                                            • Figure 73: Brand image – macro image, February 2012
                                                                                                                                                                            • Figure 74: Brand image – micro image, February 2012
                                                                                                                                                                            • Figure 75: Profile of target groups, by demographic, February 2012
                                                                                                                                                                            • Figure 76: Psychographic segmentation, by target groups, February 2012
                                                                                                                                                                            • Figure 77: Brand usage, by target group, February 2012
                                                                                                                                                                          • Brand index
                                                                                                                                                                            • Figure 78: Brand index, February 2012
                                                                                                                                                                        • Appendix – Brand Communication and Promotion

                                                                                                                                                                            • Figure 79: Top 10 advertisers in UK bottled water market, 2010-11
                                                                                                                                                                            • Figure 80: Top 10 brands in bottled water market, 2010-11
                                                                                                                                                                        • Appendix – Channels to Market

                                                                                                                                                                            • Figure 81: Agreement with the statement ‘I often eat in good restaurants’, 2007-11
                                                                                                                                                                            • Figure 82: Agreement with the statement ‘I often eat in good restaurants’, by demographics, 2011
                                                                                                                                                                        • Appendix – Consumer – Usage

                                                                                                                                                                            • Figure 83: Most popular frequency of drinking bottled water, by demographics, March 2012
                                                                                                                                                                            • Figure 84: Next most popular frequency of drinking bottled water, by demographics, March 2012
                                                                                                                                                                            • Figure 85: Most common volumes of water drunk on a daily basis, by demographics, March 2012
                                                                                                                                                                            • Figure 86: Next most common volumes of water drunk on a daily basis, by demographics, March 2012
                                                                                                                                                                        • Appendix – Consumer – Occasions

                                                                                                                                                                            • Figure 87: Most popular occasions for drinking bottled water, by demographics, March 2012
                                                                                                                                                                            • Figure 88: Next most popular occasions for drinking bottled water, by demographics, March 2012
                                                                                                                                                                            • Figure 89: Average trip duration for work in the UK, 1995/97-2010
                                                                                                                                                                        • Appendix – Consumer – Factors

                                                                                                                                                                            • Figure 90: Most popular reasons to drink bottled water at home, by demographics, March 2012
                                                                                                                                                                            • Figure 91: Next most reasons to drink bottled water at home, by demographics, March 2012
                                                                                                                                                                            • Figure 92: Most popular reasons to drink bottled water out of home, by demographics, March 2012
                                                                                                                                                                            • Figure 93: Next most popular reasons to drink bottled water out of home, by demographics, March 2012
                                                                                                                                                                        • Appendix – Consumer Attitudes Towards Bottled Water

                                                                                                                                                                            • Figure 94: Agreement with statements on bottled water, March 2012
                                                                                                                                                                            • Figure 95: Agreement with the statements ‘It’s important to drink at least 1.5 litres of water per day’ and ‘I prefer the convenience of smaller bottles (ie 500 ml or less) to larger bottles (500 ml plus)’, by demographics, March 2012
                                                                                                                                                                            • Figure 96: Agreement with the statements ‘Buying bottled water in multipacks makes it affordable’ and ‘Price makes little difference to the quality of bottled water’, by demographics, March 2012
                                                                                                                                                                            • Figure 97: Agreement with the statements ‘Buying bottled water is an unnecessary expense in the current economic climate’ and ‘I prefer to buy British bottled water brands’, by demographics, March 2012
                                                                                                                                                                            • Figure 98: Agreement with the statements ‘I trust the water quality of established brands’ and ‘The convenience of bottled water makes it worth paying for’, by demographics, March 2012
                                                                                                                                                                            • Figure 99: Agreement with the statements ‘Buying bottled water is not a good thing for the environment’ and ‘Drinking bottled water with vitamins is healthier than drinking plain bottled water’, by demographics, March 2012
                                                                                                                                                                            • Figure 100: Agreement with the statements ‘Bottled water companies have become more ethical in the past couple of years’ and ‘The health benefits of bottled water make it worth paying for’, by demographics, March 2012
                                                                                                                                                                        • Appendix – Targeting Opportunities

                                                                                                                                                                            • Figure 101: Target groups, by demographics, March 2012
                                                                                                                                                                            • Figure 102: Agreement with statements on bottled water, by target groups, March 2012
                                                                                                                                                                            • Figure 103: Reasons to drink bottled water out of home, by target groups, March 2012
                                                                                                                                                                            • Figure 104: Reasons to drink bottled water at home, by target groups, March 2012
                                                                                                                                                                            • Figure 105: Occasions for drinking bottled water, by target groups, March 2012
                                                                                                                                                                            • Figure 106: Frequency of drinking bottled water, by target groups, March 2012
                                                                                                                                                                            • Figure 107: Volumes of water drunk on a daily basis, by target groups, March 2012

                                                                                                                                                                        Companies Covered

                                                                                                                                                                        • Badoit
                                                                                                                                                                        • Britvic Soft Drinks
                                                                                                                                                                        • Buxton Foods
                                                                                                                                                                        • Coca-Cola GB
                                                                                                                                                                        • Danone UK Ltd
                                                                                                                                                                        • Facebook, Inc.
                                                                                                                                                                        • Groupe Danone
                                                                                                                                                                        • Highland Spring
                                                                                                                                                                        • Isklar
                                                                                                                                                                        • Nestlé S.A.
                                                                                                                                                                        • Nestlé UK Ltd
                                                                                                                                                                        • Nestlé Waters
                                                                                                                                                                        • PepsiCo Inc
                                                                                                                                                                        • Perrier Vittel UK Ltd
                                                                                                                                                                        • YouTube, Inc.

                                                                                                                                                                        Bottled Water - UK - May 2012

                                                                                                                                                                        £1,995.00 (Excl.Tax)