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Bottled Water - US - November 2009

The bottled water category faces numerous challenges including the economics of the “new normal” and increased environmental concern, and as a result, understanding market dynamics has become essential to ensure continued success. Opportunities do remain, however, and this report seeks out and finds them. Some of the topics covered in this report include:

  • How market forces are reshaping the bottled water category, suppressing sales in some segments and not in others
  • Specific product ideas, strategies and tactics likely to be well received in this changing category, including: identification of overlooked demos, what types of bottled water products respondents want but are not available, and product suggestions for specific use
  • How consumer attitudes are affecting category sales, and steps bottled water manufacturers can take to enhance their brands
  • An analysis of why certain brands are succeeding in the market and why others are struggling

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Sales data
          • Consumer survey data
            • Advertising creative
              • Abbreviations and terms
                • Abbreviations
                • Executive Summary

                  • Tough times for bottled water
                    • Segment snapshot: Sparkling water holding its own
                      • Opting for soda, energy drinks, and filtration systems
                        • Private label gaining on leaders
                          • SoBe and smartwater succeed in a tough market
                            • Innovation and Innovators
                              • Consumption habits by demographic
                                • The selection process
                                  • Consumers distrust industry
                                    • Some loyalty seen in spite of turn to private label
                                      • Bottled water versus tap water
                                        • More flavors, please
                                        • Insights and Opportunities

                                          • Key points
                                            • A winning recipe: New flavors, new sweeteners, new shapes
                                              • Looking to Japan’s health-oriented innovations
                                                • The sports beverage challenge
                                                  • Figure 1: Interest in sports beverages vs. bottled water, by gender, August 2009
                                                • Bottled water in the face of America’s polluted waterways
                                                  • A drink for what ails you
                                                    • Don’t forget dad
                                                      • Green cause marketing to ease environmental concerns
                                                      • Inspire Insights

                                                        • Introduction
                                                          • Fixing the green problem: Biodegradable Bags in 60 Days
                                                            • Bottled Water Backlash
                                                              • Transparency and clarity
                                                                • Customization
                                                                  • Implications
                                                                  • Market Size and Forecast

                                                                    • Key points
                                                                      • Sales dry up
                                                                          • Figure 2: U.S. FDMx sales and forecast of bottled water, at current prices, 2004-14
                                                                          • Figure 3: U.S. FDMx sales and forecast of bottled water, at inflation-adjusted prices, 2004-14
                                                                          • Figure 4: U.S. wholesale sales of bottled water, volume and value, 2004-08
                                                                        • Walmart sales
                                                                        • Competitive Context

                                                                          • Competition from other beverages
                                                                              • Figure 5: Number of beverages purchased yesterday, by gender, August 2009
                                                                              • Figure 6: Number of beverages purchased yesterday, by age, August 2009
                                                                              • Figure 7: Number of beverages purchased yesterday, by HH income, August 2009
                                                                            • Home carbonation
                                                                              • Figure 8: Drinking habits and practices, by household income, August 2009
                                                                            • Home water filtration
                                                                              • Private-label onslaught
                                                                              • Segment Performance

                                                                                • Key points
                                                                                  • The recession, energy drinks drain convenience segment
                                                                                    • Private label and tap dry sales
                                                                                      • Sparkling still bubbling
                                                                                        • Figure 9: U.S. FDMx sales and forecast of bottled water, at current prices, by segment, 2004-14
                                                                                        • Figure 10: U.S. FDMx sales of bottled water, by segment, 2008 and 2009
                                                                                    • Segment Performance—Convenience/PET

                                                                                      • Key points
                                                                                        • Tough times and category competition squeezing the segment
                                                                                          • Figure 11: U.S. FDMx sales and forecast convenience/PET still water, 2004-14
                                                                                      • Segment Performance—Jug/bulk

                                                                                        • Key points
                                                                                          • Challenges from many sides
                                                                                            • Figure 12: U.S. FDMx sales and forecast of jug/bulk still water, 2004-14
                                                                                        • Segment Performance—Sparkling Water

                                                                                          • Key points
                                                                                            • Bubbling along
                                                                                              • Figure 13: U.S. FDMx sales and forecast of sparkling/mineral water, 2004-14
                                                                                          • Retail Channels

                                                                                            • Key points
                                                                                              • Sales fall across all channels
                                                                                                • Figure 14: U.S. FDMx sales of bottled water, by retail channel, 2008 and 2009
                                                                                            • Retail Channels—Supermarkets

                                                                                              • Key points
                                                                                                • Deep discounts and private label drive down sales
                                                                                                  • Figure 15: U.S. FDMX sales of bottled water at supermarkets, 2004-09
                                                                                              • Retail Channels—Drug Stores and Other

                                                                                                • Key points
                                                                                                  • Sales of bottled water healthy at drug stores
                                                                                                    • Figure 16: U.S. FDMx sales of bottled water at drug and other FDMx stores, 2004-09
                                                                                                • Natural Channel/SPINS

                                                                                                  • Key points
                                                                                                    • Falling in the natural channel
                                                                                                      • Figure 17: Natural supermarket sales of bottled water, at current prices, 2007-09*
                                                                                                      • Figure 18: Natural supermarket sales of bottled water, at inflation-adjusted prices, 2007-09*
                                                                                                    • Implications
                                                                                                      • Natural channel sales by segment
                                                                                                        • Figure 19: Natural product supermarket retail sales of bottled water, by segment, 2007 and 2009
                                                                                                      • Brand tables
                                                                                                        • Brand table: Bottled water
                                                                                                          • Figure 20: Manufacturer brand natural supermarket sales of bottled water*, 2007 and 2009
                                                                                                        • Natural channel sales of still water: enhanced vs. regular
                                                                                                          • Figure 21: Natural product supermarket retail sales of still water, by enhanced vs. regular, 2007 and 2009
                                                                                                        • Natural channel sales of sparkling water; by flavor
                                                                                                          • Figure 22: Natural product supermarket retail sales of sparkling water, by flavor, 2007 and 2009
                                                                                                      • Market Drivers

                                                                                                        • Key points
                                                                                                          • The recession douses sales and prices
                                                                                                            • A flood of negative press
                                                                                                                • Figure 23: Criteria used when purchasing water, August 2009
                                                                                                              • The recession/environment/diet one-two-three punch
                                                                                                                • Figure 24: Drinking habits and practices, August 2009
                                                                                                              • The affluent choosing alternatives
                                                                                                                  • Figure 25: Drinking habits and practices, by household income, August 2009
                                                                                                                • BPA still scares
                                                                                                                • Leading Companies

                                                                                                                  • Key points
                                                                                                                    • The big three lose ground
                                                                                                                      • Figure 26: FDMx sales of leading bottled water companies, 2008 and 2009
                                                                                                                  • Selected Brand Analysis—Convenience/PET

                                                                                                                    • Key points
                                                                                                                      • Compelling benefits still draw
                                                                                                                        • But most brands stumble
                                                                                                                          • Figure 27: Selected FDMx manufacturer and brand sales of convenience/PET still water, 2008 and 2009
                                                                                                                        • Brand usage data
                                                                                                                          • Only private label gaining in usage
                                                                                                                            • Figure 28: Incidence of drinking selected brands of still bottled water, 2006-09
                                                                                                                          • Younger respondents show increased use of Aquafina, Dasani, and Nestlé
                                                                                                                            • Figure 29: Incidence of drinking selected brands of still bottled water, by age, February 2008-March 2009
                                                                                                                        • Selected Brand Analysis—Jug/bulk

                                                                                                                          • Key points
                                                                                                                            • Pristine sells
                                                                                                                              • Figure 30: Selected FDMx manufacturer and brand sales of jug/bulk still water, 2008 and 2009
                                                                                                                          • Selected Brand Analysis—Sparkling water

                                                                                                                            • Key points
                                                                                                                              • An affordable luxury
                                                                                                                                • Figure 31: Selected FDMx brand sales of sparkling/mineral in the U.S., 2008 and 2009
                                                                                                                              • Brand usage: Aquafina far in the lead, but number two slot up for grabs
                                                                                                                                • Figure 32: Top brands of sparkling water purchased, by age, August 2009
                                                                                                                                • Figure 33: Top brands of sparkling water purchased, by HH income, August 2009
                                                                                                                            • Brand Qualities

                                                                                                                              • Glacéau smartwater
                                                                                                                                • SoBe Lifewater
                                                                                                                                • Innovation and Innovators

                                                                                                                                  • Innovation drives demand
                                                                                                                                    • Figure 34: Number of new bottled water products introduced, by year, 2006-09
                                                                                                                                    • Figure 35: Growth of U.S. bottled water new product launches, 2006-09
                                                                                                                                    • Figure 36: Top claims in U.S. bottled water new product launches, 2006-09
                                                                                                                                    • Figure 37: Top manufacturers, based on number of new product launches of U.S. bottled waters, 2006-09
                                                                                                                                  • Innovative products
                                                                                                                                    • Flavored bottled water
                                                                                                                                      • Enhanced bottled water
                                                                                                                                        • Environmentally friendly products
                                                                                                                                        • Advertising and Promotion

                                                                                                                                          • Introduction
                                                                                                                                            • Figure 38: Adspend by category leaders, 2007 and 2008
                                                                                                                                          • Noteworthy initiatives
                                                                                                                                            • Online initiatives
                                                                                                                                              • Noteworthy partnerships
                                                                                                                                                • Website activity
                                                                                                                                                  • Ice Mountain (Nestlé)
                                                                                                                                                    • Evian
                                                                                                                                                      • SoBe Lifewater
                                                                                                                                                        • TV commercials
                                                                                                                                                          • Glacéau goes after dads
                                                                                                                                                            • Figure 39: Glacéau vitaminwater Revive television ad, 2009
                                                                                                                                                          • Crystal Geyser: We aren’t selling tap
                                                                                                                                                            • Figure 40: Crystal Geyser television ad, 2009
                                                                                                                                                          • Nestlé selling health to moms
                                                                                                                                                            • Figure 41: Nestlé Pure Life television ad, 2009
                                                                                                                                                          • SoBe’s lizards chase the young and hip
                                                                                                                                                            • Figure 42: SoBe television ad, 2009
                                                                                                                                                          • Perrier keeps you cool
                                                                                                                                                            • Figure 43: Perrier television ad, 2009
                                                                                                                                                        • Consumption

                                                                                                                                                          • Flavored water has room for growth
                                                                                                                                                            • Figure 44: Beverage usage, by gender, February 2008-March 2009
                                                                                                                                                          • Increased usage in women dependent on increased penetration
                                                                                                                                                            • Figure 45: Weekly consumption of still and sparkling bottled water, by gender, February 2008-March 2009
                                                                                                                                                          • Ages 12-64 show high levels of consumption
                                                                                                                                                            • Figure 46: Weekly consumption of still and sparkling water, by age, February 2008-March 2009
                                                                                                                                                        • Trust, Taste and Loyalty

                                                                                                                                                          • Trust: Wariness towards manufacturers’ claims
                                                                                                                                                            • Figure 47: Trust in bottled water claims, August 2009
                                                                                                                                                          • Taste: Women more likely to taste a difference, but majority still do not
                                                                                                                                                            • Figure 48: Perception of taste/quality differences between water brands, by gender, August 2009
                                                                                                                                                          • Loyalty
                                                                                                                                                            • Figure 49: Degree of brand loyalty with bottled water, by age, August 2009
                                                                                                                                                          • Children in the house and brand-loyal
                                                                                                                                                            • Figure 50: Degree of brand loyalty with bottled water, by presence of children in HH, August 2009
                                                                                                                                                        • The Selection Process

                                                                                                                                                          • Price and taste in the lead
                                                                                                                                                            • Figure 51: Criteria used when purchasing unflavored, unsweetened water, by gender, August 2009
                                                                                                                                                          • Shape of bottle can shape brand choice in 18-34s
                                                                                                                                                            • Figure 52: Criteria used when purchasing unflavored, unsweetened water, by age, August 2009
                                                                                                                                                          • Parents buying for flavor, bottle shape, and convenience
                                                                                                                                                            • Figure 53: Criteria used when purchasing unflavored, unsweetened water, by presence of children in HH, August 2009
                                                                                                                                                        • Bottled vs. Tapped

                                                                                                                                                          • Comparisons with tap not entirely favorable
                                                                                                                                                            • Figure 54: Tap water vs. bottled water, opinions on health and taste, August 2009
                                                                                                                                                          • Favorable opinions decline with age
                                                                                                                                                            • Figure 55: Tap water vs. bottled water, opinions on health and taste, by age, August 2009
                                                                                                                                                          • Positive attitudes seen in households with children
                                                                                                                                                            • Figure 56: Tap water vs. bottled water, opinions on health and taste, by presence and number of children in HH, August 2009
                                                                                                                                                        • All-day Hydration vs. Workout Replenishment

                                                                                                                                                          • Hydration for the young (and young at heart)
                                                                                                                                                            • Figure 57: Habits concerning hydration, by age, August 2009
                                                                                                                                                          • Hydration for women; exercise for men
                                                                                                                                                            • Figure 58: Habits concerning hydration, by gender, August 2009
                                                                                                                                                        • Flavoring, Sweetening and Carbonation

                                                                                                                                                          • Key points
                                                                                                                                                            • vitaminwater10 in line with consumer desire
                                                                                                                                                              • Figure 59: Drink preferences, attitudes towards flavoring and carbonation, August 2009
                                                                                                                                                            • Tackling sports beverages
                                                                                                                                                              • Figure 60: Drink preferences, attitudes towards flavoring and carbonation, by gender, August 2009
                                                                                                                                                            • Under-45s most keen on flavor
                                                                                                                                                              • Figure 61: Drink preferences, attitudes towards flavoring and carbonation, by age, August 2009
                                                                                                                                                            • Parents use coupons, like new products, and want less sweet options
                                                                                                                                                              • Figure 62: Drink preferences, attitudes towards flavoring and carbonation, by presence and number of children in HH, August 2009
                                                                                                                                                          • Impact of Race/Hispanic Origin

                                                                                                                                                            • Blacks consume all types of bottled water
                                                                                                                                                              • Fighting obesity
                                                                                                                                                                • Figure 63: Number of beverages purchased yesterday, by race/Hispanic origin, August 2009
                                                                                                                                                              • Dasani, Deer Park, Dannon more popular with blacks
                                                                                                                                                                • Figure 64: Incidence of drinking selected brands of still bottled water, by race/Hispanic origin, February 2008-March 2009
                                                                                                                                                            • Cluster Analysis

                                                                                                                                                                • Flavorers
                                                                                                                                                                  • Straights
                                                                                                                                                                    • Opportunity
                                                                                                                                                                      • Savers
                                                                                                                                                                        • Cluster characteristics
                                                                                                                                                                          • Figure 65: Bottled water clusters, August 2009
                                                                                                                                                                          • Figure 66: Number of beverages purchased yesterday, by bottled water clusters, August 2009
                                                                                                                                                                          • Figure 67: Water vs. bottled water, opinions on health and taste, by bottled water clusters, August 2009
                                                                                                                                                                          • Figure 68: Brand loyalty, by bottled water clusters, August 2009
                                                                                                                                                                          • Figure 69: Product selection, by bottled water clusters, August 2009
                                                                                                                                                                          • Figure 70: Drink preferences, attitudes towards flavoring and carbonation, by bottled water clusters, August 2009
                                                                                                                                                                          • Figure 71: Reasons to drink or avoid drinking bottled water, by bottled water clusters, August 2009
                                                                                                                                                                        • Cluster demographics
                                                                                                                                                                          • Figure 72: Bottled water clusters, by gender, August 2009
                                                                                                                                                                          • Figure 73: Bottled water clusters, by age, August 2009
                                                                                                                                                                          • Figure 74: Bottled water clusters, by race/Hispanic origin, August 2009
                                                                                                                                                                        • Cluster methodology
                                                                                                                                                                        • Custom Consumer Groups

                                                                                                                                                                          • Women aged 18-54 drinking a wide variety of beverages
                                                                                                                                                                              • Figure 75: Beverage usage, by gender and age, February 2008-March 2009
                                                                                                                                                                              • Figure 76: Weekly consumption of still and sparkling bottled water, by gender and age, February 2008-March 2009
                                                                                                                                                                            • Dads are brand-loyal
                                                                                                                                                                              • Figure 77: Degree of brand loyalty with bottled water, by gender and presence of children under 18 in HH, August 2009
                                                                                                                                                                            • Getting Dad off Gatorade/Powerade
                                                                                                                                                                              • Figure 78: Drink preferences, sports vs. flavored or unflavored water, by gender and presence of children in HH, August 2009
                                                                                                                                                                          • IRI/Builders—Key Household Purchase Measures

                                                                                                                                                                              • Overview
                                                                                                                                                                                • Convenience/PET still water
                                                                                                                                                                                  • Brand map
                                                                                                                                                                                    • Figure 79: Brand map, selected brands of convenience/PET still water, buying rate by household penetration, 2008*
                                                                                                                                                                                  • Brand leader characteristics
                                                                                                                                                                                    • Key purchase measures
                                                                                                                                                                                      • Figure 80: Key purchase measures for top brands of convenience/PET still water, by household penetration, 2008*
                                                                                                                                                                                    • Jug/bulk still water
                                                                                                                                                                                      • Brand map
                                                                                                                                                                                        • Figure 81: Brand map, selected brands of jug/bulk still water, buying rate by household penetration, 2008*
                                                                                                                                                                                      • Brand leader characteristics
                                                                                                                                                                                        • Key purchase measures
                                                                                                                                                                                          • Figure 82: Key purchase measures for top brands of jug/bulk still water, by household penetration, 2008*
                                                                                                                                                                                        • Sparkling/mineral water
                                                                                                                                                                                          • Brand map
                                                                                                                                                                                            • Figure 83: Brand map, selected brands of sparkling/mineral water, buying rate by household penetration, 2008*
                                                                                                                                                                                          • Brand leader characteristics
                                                                                                                                                                                            • Key purchase measures
                                                                                                                                                                                              • Figure 84: Key purchase measures for top brands of sparkling/mineral water, by household penetration, 2008*
                                                                                                                                                                                          • Appendix: Other Useful Consumer Tables

                                                                                                                                                                                            • Widespread usage among under-65s
                                                                                                                                                                                              • Figure 85: Beverage usage, by age, February 2008-March 2009
                                                                                                                                                                                            • Affluent consuming more still bottled water
                                                                                                                                                                                              • Figure 86: Weekly consumption of still and sparkling bottled water, by HH income, February 2008-March 2009
                                                                                                                                                                                            • Blacks drink more bottled water
                                                                                                                                                                                              • Figure 87: Weekly consumption of still and sparkling bottled water, by race/Hispanic origin, February 2008-March 2009
                                                                                                                                                                                            • 18-24s not believing in health risks
                                                                                                                                                                                              • Figure 88: Perception of health risk about drinking bottled/canned beverages, by age, August 2009
                                                                                                                                                                                            • Other popular brands
                                                                                                                                                                                              • Figure 89: Other brands of sparkling water purchased, by age, August 2009
                                                                                                                                                                                            • 18-34s refilling, over-35s recycling
                                                                                                                                                                                              • Figure 90: Reuse and recycling of water bottles, by age, August 2009
                                                                                                                                                                                            • No children and recycling
                                                                                                                                                                                              • Figure 91: Reuse and recycling of water bottles, by presence of children in HH, August 2009
                                                                                                                                                                                            • Households with children less skeptical
                                                                                                                                                                                              • Figure 92: Trust in bottled water claims, by presence of children in HH, August 2009
                                                                                                                                                                                          • Appendix: Trade Associations

                                                                                                                                                                                            Companies Covered

                                                                                                                                                                                            • American Beverage Association, The
                                                                                                                                                                                            • Arby's Restaurant Group
                                                                                                                                                                                            • Beverage Marketing Corporation
                                                                                                                                                                                            • Centers for Disease Control and Prevention
                                                                                                                                                                                            • Clover Farms Dairy
                                                                                                                                                                                            • Coca-Cola Company (The) (USA)
                                                                                                                                                                                            • Crystal Geyser Alpine Spring Water
                                                                                                                                                                                            • Dannon Co
                                                                                                                                                                                            • Dell Inc.
                                                                                                                                                                                            • DS Waters of America LP
                                                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                                                            • Fiji Water
                                                                                                                                                                                            • Ford Motor Company (USA)
                                                                                                                                                                                            • Gatorade
                                                                                                                                                                                            • Google, Inc.
                                                                                                                                                                                            • Greenfield Online
                                                                                                                                                                                            • Hawaiian Holdings Inc.
                                                                                                                                                                                            • International Bottled Water Association
                                                                                                                                                                                            • JCPenney (department stores and catalog)
                                                                                                                                                                                            • Kirin Brewery of America
                                                                                                                                                                                            • Los Angeles Times
                                                                                                                                                                                            • MySpace.com
                                                                                                                                                                                            • National Basketball Association
                                                                                                                                                                                            • National Beverage Corp.
                                                                                                                                                                                            • National Soft Drink Association
                                                                                                                                                                                            • Nestlé Waters North America Inc.
                                                                                                                                                                                            • Pepsi-Cola North America
                                                                                                                                                                                            • Roll International Corporation
                                                                                                                                                                                            • Snapple Beverage Corporation
                                                                                                                                                                                            • Sunny Delight Beverages Company
                                                                                                                                                                                            • The New York Times Company
                                                                                                                                                                                            • Twitter, Inc.
                                                                                                                                                                                            • U.S. Bureau of Labor Statistics
                                                                                                                                                                                            • U.S. Department of Agriculture
                                                                                                                                                                                            • U.S. Environmental Protection Agency
                                                                                                                                                                                            • Walmart Stores (USA)
                                                                                                                                                                                            • Wegmans Food Markets, Inc
                                                                                                                                                                                            • YouTube, Inc.

                                                                                                                                                                                            Bottled Water - US - November 2009

                                                                                                                                                                                            £3,277.28 (Excl.Tax)