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Bottled Water - US - January 2017

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

This Report discusses the following key topics:

  • Inexpensive alternatives to bottled water are widely available
  • Beverage blurring creates competition from unexpected quarters
  • Cost, environmental concerns, and refillable water bottles limit usage

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Category shows solid growth prospects through 2021
          • Figure 1: Total US sales and fan chart forecast of bottled water market, at current prices, 2011-21
        • The issues
          • Inexpensive alternatives to bottled water are widely available
            • Figure 2: Consumption of water, by type of water, November 2016
          • Beverage blurring creates competition from unexpected quarters
            • Cost, environmental concerns, and refillable water bottles limit usage
              • Figure 3: Reasons for consuming less bottled water, November 2016
            • The opportunities
              • Key opportunities lie with 25-34-year-olds, Hispanics, and parents
                • Figure 4: Same or increased consumption of bottled water, by type and select demographics, November 2016
              • Diverse motives for drinking bottled water
                • Figure 5: Motivation for drinking bottled water, November 2016
              • Diverse benefits show many inroads for growth
                • Figure 6: Purchase drivers for water consumption, November 2016
              • What it means
              • The Market – What You Need to Know

                • Market shows solid growth, tops $16.5 billion in sales
                  • PET/convenience segment is largest, sparkling water fastest growing
                    • Tap water quality and alternatives to bottled water shape market context
                    • Market Size and Forecast

                      • Market reaches $16.5 billion in 2016, solid growth forecast through 2021
                        • Figure 7: Total US sales and fan chart forecast of bottled water market, at current prices, 2011-21
                        • Figure 8: Total US retail sales and forecast of bottled water, at current prices, 2011-21
                    • Market Breakdown

                      • Three major segments make up the bottled water market
                        • Figure 9: Market share of bottled water, 2016
                      • Convenience/PET is largest segment, but sparkling is fast growing
                        • Figure 10: Total US retail sales of bottled water, by segment, at current prices, 2014 and 2016
                        • Figure 11: Total US retail sales and forecast of bottled water, by segment, at current prices, 2016
                      • “Other retail channels” lead category sales and build share
                        • Figure 12: Total US retail sales of bottled water, by channel, at current prices, 2014 and 2016
                    • Market Perspective

                        • Water filtration systems offer an alternative to unfiltered tap water
                          • Other beverages, including soda and juices, compete with bottled water
                            • Competition from refillable containers and at-home carbonation systems
                            • Market Factors

                              • Healthy living, hydration, and weight loss drive water consumption
                                • Obesity epidemic remains underpinning driver for BFY drinks
                                  • Concern with safety of tap water in context of aging infrastructure
                                    • Macro-economic factors support higher spending on bottled water
                                      • Figure 13: Consumer confidence and unemployment, 2000-September 2016
                                    • Population growth among 25-34-year-olds bodes well for market
                                      • Figure 14: US population aged 18+, by age, 2012-22
                                    • Younger generations and families will be evermore racially diverse
                                      • Figure 15: Population by race and Hispanic origin, 2012-22
                                  • Key Players – What You Need to Know

                                    • Four leaders command 58% share, but smaller players growing fast
                                      • Premium brands, natural flavors, and sparkling water doing well
                                        • Family-friendly packaging, branding, and cross-promotion
                                          • Water with added benefits, new ingredients, and a hybrid nature
                                            • Eco-friendly partnerships and donations to crisis areas
                                            • Brand Sales of Bottled Water

                                              • The four largest players together command over half of MULO sales
                                                • Private label shows positive growth, smaller suppliers build share
                                                  • Figure 16: Manufacturer sales of bottled water, 2015 and 2016
                                              • What’s Working?

                                                • Premium brands and naturally sourced, imported offerings
                                                  • Innovation and interest in natural colors, flavors, and ingredients
                                                    • Sparkling water sales grow with natural flavors and strong promotion
                                                      • Coca-Cola and PepsiCo promote brand extensions in sparkling water category
                                                        • Figure 17: Dasani Sparkling Water “Break for Bubbles,”, TV ad, July 2016
                                                        • Figure 18: Aquafina “In perfect sync” Sparkling Water TV ad, May 2016
                                                      • Private label offerings expand into flavored sparkling water category
                                                        • Family-friendly packaging, branding, and cross-promotion
                                                          • Figure 19: Aquafina Ice Age: Collision Course & Aquafina, TV ad, July 2016
                                                      • What’s Struggling?

                                                        • Nestlé – still the largest supplier – sees growth slow and share shrink
                                                          • Uneven brand performance in the PET/Still water segment
                                                            • In jug/bulk segment, Nestlé loses share to Crystal Geyser and private label
                                                              • In sparkling, Nestlé’s sales are stronger, though innovation could bolster position
                                                              • What’s Next?

                                                                • Water with added benefits, new ingredients, and a hybrid nature
                                                                  • Botanical extracts for holistic health and probiotics for digestive support
                                                                    • Sports waters offer energy, electrolytes, and protein
                                                                      • Water infused with caffeine . . . and alcohol
                                                                        • Eco-friendly positioning, water stewardships, and strategic partnerships
                                                                          • Promoting bottled water in areas facing tap water issues
                                                                          • The Consumer – What You Need to Know

                                                                            • Penetration is highest for unflavored, non-carbonated bottled water
                                                                              • Heavily engaged consumers include youth, parents, and Hispanics
                                                                                • Engaged consumers have varied motivations, seek more added benefits
                                                                                  • Water used for many occasions throughout the day
                                                                                    • “Natural” is the most widely valued attribute in bottled water
                                                                                      • Refillable water bottles, price, and environmental concerns blunt usage
                                                                                      • Consumption of Bottled Water

                                                                                        • Consumption strong for a wide range of bottled water products
                                                                                          • Figure 20: “Any or more” consumption of water, by type of water, November 2016
                                                                                        • Unflavored, non-carbonated water is “go-to” option with 83% penetration
                                                                                          • Figure 21: Any consumption and increased consumption of water, by type of water, November 2016
                                                                                        • Majority of 18-34s report drinking more water in past three months
                                                                                          • Figure 22: “Same or more” consumption of water, by type of water and by age, November 2016
                                                                                        • Women drink more filtered water, while men consume more varieties
                                                                                          • Figure 23: “Same or more” consumption of water, by type of water and by gender, November 2016
                                                                                        • Household income is a key driver up to the $50K HH income level
                                                                                          • Figure 24: “Same or more” consumption of water, by type of water and household income, November 2016
                                                                                        • Parents stand out for high consumption of many bottled water variations
                                                                                          • Figure 25: “Same or more” consumption of water, by type of water and parental status, November 2016
                                                                                        • Hispanics consume more filtered and bottled water
                                                                                          • Figure 26: “Same or more” consumption of water, by Hispanic origin, November 2016
                                                                                      • Attitudes and Habits Related to Water Consumption

                                                                                        • Consumers drink more water to hydrate, replace other beverages
                                                                                          • Figure 27: Attitudes and habits related to water consumption, November 2016
                                                                                        • Younger consumers seek more varieties of water
                                                                                          • Figure 28: Attitudes and habits related to water consumption, by age, November 2016
                                                                                        • Parents show enthusiasm for bottled water variety
                                                                                          • Figure 29: Attitudes and habits related to water consumption, by parental status, November 2016
                                                                                        • Hispanics often drink more water to cut back on sugar and caffeine
                                                                                          • Figure 30: Attitudes and habits related to water consumption, by race/ethnicity, November 2016
                                                                                      • Consumption Occasion

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

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

                                                                                        • “Natural” water is a priority, but consumers seek many other benefits
                                                                                          • Figure 38: Purchase drivers for water consumption, November 2016
                                                                                        • Males 18-34 stand out for very high interest in water with added benefits
                                                                                          • Figure 39: Purchase drivers for water consumption part 1, by age and gender, November 2016
                                                                                          • Figure 40: Purchase drivers for water consumption, part 2, by age and gender, November 2016
                                                                                        • Parents also very open to water with added benefits and supplements
                                                                                          • Figure 41: Reasons for water consumption, by parental status, November 2016
                                                                                        • Hispanics seek bottled water with a range of added benefits
                                                                                          • Figure 42: Reasons for water consumption, by race/Hispanic origin, November 2016
                                                                                      • Key Driver Analysis

                                                                                        • Methodology
                                                                                          • 35-44s drink range of water types, motivated by hydration and weight loss
                                                                                            • Figure 43: Key drivers of drinking more types of bottled water, October 2016
                                                                                        • Purchase Deterrents to Bottled Water Consumption

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

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

                                                                                                          • Figure 48: Total US sales and forecast of bottled water market, at inflation-adjusted prices, 2011-21
                                                                                                          • Figure 49: Total US retail sales and forecast of bottled water, by segment, at inflation-adjusted prices, 2011-21
                                                                                                          • Figure 50: Total US retail sales of bottled water, by retail channel, at current prices, 2010-20
                                                                                                          • Figure 51: Average household size, by race and Hispanic origin, 2016
                                                                                                          • Figure 52: Distribution of generations by race and Hispanic origin, 2017
                                                                                                          • Figure 53: Median household income, by race and Hispanic origin of householder, 2015
                                                                                                      • Appendix – Key Players

                                                                                                          • Figure 54: MULO sales of jug/bulk bottled water by leading companies and brands, rolling 52 weeks 2015 and 2016
                                                                                                          • Figure 55: MULO sales of convenience/PET still water, by leading companies and brands, rolling 52 weeks 2015 and 2016
                                                                                                          • Figure 56: MULO sales of sparkling/mineral water, by leading companies and brands, rolling 52 weeks 2015 and 2016
                                                                                                      • Appendix – Consumer

                                                                                                          • Figure 57: Any, same or more consumption of water, by age, November 2016
                                                                                                      • Appendix – Key Driver Analysis

                                                                                                          • Interpretation of results
                                                                                                            • Figure 2: Key drivers of drinking more types of bottled water – Key driver output, October 2016

                                                                                                        Companies Covered

                                                                                                        • Walmart Stores (USA)

                                                                                                        Bottled Water - US - January 2017

                                                                                                        US $3,995.00 (Excl.Tax)