From a trickle to a tidal wave. That best describes the recent rush in the bottled-water category, as a sea of new brands enter the market to soak up rising consumption.
Canadians can’t get hydrated enough these days, and water seems to be our go-to drink.
While flavoured pop and juice sales are falling, water is on the rise. Flat- water sales are up 2% in dollars in the last year, according to Nielsen, and carbonated water is up 8% in dollars and a bubbly 21% in units. Coconut water is defying the “fad” tag, with units up 8%.
Carbonated bottled water, meanwhile, posted unit sales growth of 21%.
The primary market for carbonated water is 25- to 40-year-old “social trendsetters who are online, in-the-know and looking for something unexpected,” says Jennifer Semley-Robert of Nestlé Waters, referring to the recent addition of Perrier L’Orange to its fold of flavoured water varieties.
Trends identified in Nielsen’s “Global Health and Wellness Survey” support such category innovation, as 23% of consumers say they plan to buy more water to improve their overall health.
The largest share of water drinking occasions occur among millennials, according to an Ipsos Five study examining Canadian eating habits.
“Interestingly, sparkling water is more likely to be consumed by 35- to 49-year-olds and skews higher to females, those living in Quebec and consumers residing in urban centres,” cites the report.
Consumers are also looking for beverages that will contribute to their health, says Robert Kral from Protein2o, a protein-based water beverage in the U.S. Protein2o [handled in Canada by Unique Foods] aims to tap into the female- driven, health-conscious market with its focus on low-calorie and high-protein ingredients.
“Our research shows 60% of Canadians are looking to add protein to their diets,” he says, so a water beverage with protein would seem to make sense. In the U.S., Protein2o is currently on the shelves of major grocers such as Kroger and Roundy’s. Kral says the drink’s primary customers are women 22 to 45.
While more brands are targeting the fitness market, some new entrants, such as Shloer, aim to profit from other segments, such as alcohol abstainers and pregnant women.
“Shloer is positioned as a sophisticated alcohol alternative and is ideal for social and special occasions, such as baby showers and weddings,” says Amanda Graham, marketing director at U.K.-based SHS Group.
The company wants to replicate the success of its Bottlegreen brand here, which has enjoyed a 10% increase in sales in the last year, while its cordial range jumped by 42%. Tree of Life is handling SHS Group brands in Canada.
Squeezed by increasing competition on store shelves, brands are vying for consumers’ eyes through innovative packaging and design. Sparkling Ice, for example, comes in a fashionable “sleek and portable” bottle.
Distributed in Canada by Sun-Rype Products, the flavoured water was an immediate hit in the U.S. upon launch in 2012.
First-year sales reached US$122 million, making it one of the Top 10 launches that year, according to research firm IRI. Sun-Rype’s Warren Sarafinchan hopes Sparkling Ice “reaches the same potential in Canada.”
Another marketing driver is sustainability. Almost 80% of Canadians say it is important to recycle and not drink out of new, “first-use” plastic bottles, according to a survey by Flow water.
Billed as Canada’s first “social” water company, Flow is sold in Tetra Paks. Seventy per cent of its packaging comes from a renewable source.
“Consumers are seeking natural products that have not been commercially treated, and they are becoming savvy to the fact that there are differences between waters and water brand offerings,” says Flow’s CEO, Nicholas Reichenbach.
Locally sourced water, Reichenbach adds, is also high on consumers’ agendas when buying. Flow’s water comes from a spring on Reichenbach’s family land, in Mildmay, Ont.
For retailers, the message is clear: having a diverse range of waters satisfies different consumer buying motivations. As Ipsos noted in its Five report, flat bottled water consumption is driven by a need for convenience and portability. Sparkling water purchases, are more often motivated by craving, taste and relaxation.