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Bottled Water - UK - June 2007

ISSUES IN THE MARKET
Key themes of the report
Definition
Definition excludes
Explanation and types
Abbreviations
INSIGHTS AND OPPORTUNITIES
Vegetables with flavour
Bottling sensations
Water with personality
Male focus
Connoisseurs of carbonation
MARKET IN BRIEF
Topline trends
Bottled water fits the bill (but so do juice drinks)
Brands and ethics
Future trends
FAST FORWARD TRENDS
 TREND 1: MARKET AS CONVERSATION
Definition
What's it about?
What next?
 TREND 2: END OF (U.S.) EMPIRE?
Definition
What we've seen
What’s next?
INTERNAL MARKET ENVIRONMENT
Key points:
Health and fitness – mineral water drinkers more proactive
Flavoured water drinkers – guilt- and diet-obsessed
Focus on green credentials intensifies
Figure 1: Agreement with selected attitudinal statements on diet and health, by consumption of bottled mineral water, 2006
Schools – working up a thirst…
How does this affect bottled water?
…but confusion over guidelines causes chaos
Leisure venue catering
BROADER MARKET ENVIRONMENT
Key points:
Bottled water companies like it hot
Figure 2: Trends in the amount of sunshine and rainfall in the UK, 1971-2000 and 2002-06
Pure water v pure air
More opportunities for regional brands
Smoking ban – mixed blessings
Key European markets provide insight
Keeping ABs hydrated
Older age – developing a taste for water
Adapting to one-person households
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
COMPETITIVE CONTEXT
Key points:
Figure 3: UK retail sales of soft drinks, by value, 2002-06
Bottled water and fruit juice meet consumer demand
School rules favour bottled water
Energy and sports drinks v functional bottled water
Smoothies – sales growing faster than bottled water
Water cooler sales stagnate
WHO’S INNOVATING?
Key points:
Savour that exotic flavour
Splashing around – bottled water for children
Lunchbox launches
Trendy teenagers and active urbanites
Ethical concerns
Free-from
Health and fitness
Blurring the boundaries – functional water and functional drinks
Getting to grips with packaging
Oxygen…disappearing into thin air?
The Scottish heritage trail
A lighter touch
Cross-branding
Premium launches
Bottling sensations
Freeze!
Future NPD
MARKET VALUE AND FORECAST
Key points:
Figure 4: Forecast of UK sales of bottled water*, by volume, value and average price, 2007-12
Hot summers help boost volume sales in 2003 and 2006
Value growth boosted by premiumisation and ethical launches
Future trends
SEGMENT PERFORMANCE
Key points:
Spring/table water gains momentum
Figure 5: UK retail volume sales of bottled water, by type of source, 2003-06
Flavour – a major focus for NPD
Sugar versus sugar-free
Still water flows more freely
Figure 6: UK retail volume sales of bottled water, by volume and value, by carbonation, 2003-06
More products for children
NPD adds value to still water sales
Figure 7: Bottled water volumes, by packaging type, 2003-06
Convenience factor favours plastic packaging
On-the-go lifestyles favour sports cap bottles
Popularity of multipacks a key source of growth
On-trade – different operating conditions
MARKET SHARE
Key points:
Volume sales reflect benefit of brand owner investment
Figure 8: Estimated brand shares in the bottled water off-trade, by volume*, 2004-06
And the winner is…Danone
Niche players battle with big brands
Own-label share declines
Value sales favour key brands
Figure 9: Estimated brand shares in the bottled water off-trade, by value*, 2006
Volvic and Evian command significant premium
Niche players achieve value growth
On-trade boost value for specialists
COMPANIES AND BRANDS
Key points:
Britvic Soft Drinks – tighter focus on better-for-you drinks
Coca-Cola dips its toe in UK waters again
Greencore invests in vertical integration
Highland Spring invests in promoting hydration benefits
Matthew Clark – new joint venture signals expansion
Nestlé Waters revitalises Buxton and Vittel
Princes invests heavily in Aqua-Pura brand
Ty Nant cultivates arty image
Niche companies intensify focus on bottled water
Ethical concerns – charting new waters
Own-brands – premiumisation trends
BRAND COMMUNICATION AND PROMOTION
Key points:
Figure 10: Main monitored media advertising expenditure on bottled water, 2002-07
Brands drive market
Figure 11: Main monitored media advertising expenditure on bottled water, by key brand, 2002-06
Evian – hey big spender
Volvic – it’s a taste eruption
Buxton – nothing touches it
Highland Spring – a long journey
TV loses to press and outdoor advertising
Figure 12: Main monitored media advertising expenditure on bottled water, by media, 2002-07
Spending reveals seasonal nature of market
Figure 13: Main monitored media advertising expenditure on bottled water, by channel, by quarter, 2006
Preparing for summer
BRAND ELEMENTS
Brand map
Figure 14: Attitudes and usage of bottled water brands, May 2007
 EVIAN
Figure 15: Words associated with danone water’s Evian brand, May 2007
Brand qualities
Evian preferred choice. Excellent, but why?
 SAN PELLEGRINO
Figure 16: Words associated with Nestlé’s San Pellegrino brand, May 2007
Brand qualities
San Pellegrino – The Jewel of the Italian Alps has untapped magic
 VOLVIC/VOLVIC TOUCH OF FRUIT
Figure 17: Words associated with Danone’s Volvic and Volvic Touch of Fruit brands, May 2007
Brand qualities
Full of volcanicity for all ages
 VITTEL
Figure 18: Words associated with Nestlé’s Vittel brand, May 2007
Brand qualities
Vittel needs re-vittelising right enough
 PERRIER
Figure 19: Words associated with Nestlé’s Perrier brand, May 2007
Brand qualities
Perrier losing its fizz, pride and UK ratings
 BRAND QUALITIES
Figure 20: Consumer usage of various bottled water brands, May 2007
Rugged Highland Spring and boring Buxton are the most ethical brands
 USAGE OF BRANDS
Evian, Volvic and Highland Spring lead the way
Figure 21: Consumer usage of various bottled water brands, May 2007
 ATTITUDES TOWARDS BRANDS
Figure 22: Attitudes towards bottled water brands, May 2007
 BRAND SATISFACTION AND PERFORMANCE
Evian tops excellence. Perrier rates poorest
Figure 23: Customer rating of users of bottled water brands, May 2007
 BRAND COMMITMENT
Figure 24: Degree of customer commitment to bottled water brands, June 2007
 ROUND UP
CHANNELS TO MARKET
Key points:
Stronger on-trade growth in 2006
Figure 25: UK retail sales of bottled water, by outlet type, 2004-06
Health issues influence on-trade market
Figure 26: UK retail sales of bottled water, by outlet type, 2004-06
Grocery multiples driving growth
Other impulse favours vending
Wider availability in leisure and catering outlets
Pubs and clubs clean up their act
THE CONSUMER – CONSUMPTION TRENDS
Key points:
Bottled water consumption declines with age
Figure 27: Consumption of selected soft drinks – 7-14-year-olds, by age, 2002-06
Figure 28: Consumption of bottled water – 7-19-year-olds, 2006
Drinking preferences
Figure 29: Flavoured or unflavoured – 7-14-year-olds, 2006
Location, location, location
Medium users – fastest-growing adult group
Figure 30: Consumption of bottled mineral water (non-flavoured) in the last 12 months, 2002-06
Medium users – young, female and living in Greater London
Non-users – chart
Figure 31: Types drunk, 2002-06
Still water gains further momentum
Importance of branding for plain water
Figure 32: Consumption of branded and supermarket own-label bottled mineral water, 2006
Figure 33: Consumption of branded and supermarket own-label, flavoured water, herbal and premium soft drinks, 2006
THE CONSUMER – POPULARITY OF DIFFERENT TYPES
Key points:
Come a long way
Figure 34: Types of water drunk, March 2007
Offering potential for growth
Competition from water filters in the home
Incentives to drink bottled water
Figure 35: Main reasons for drinking bottled water, March 2007
Health and fitness
Eau naturel
Cross-branding opportunities
Understanding conscientious objectors
Figure 36: Reasons for not buying bottled water, March 2007
Price – the biggest obstacle to purchasing bottled water
Just tap water for me please
Hot drinks – hindrance to bottled water
CONSUMER PRIORITIES
Key points:
Decision-making
Figure 37: Important factors when choosing bottled water, March 2007
Still or sparkling – the deciding factor
Straightforward intentions
Bottled connoisseurs
Who are these selective shoppers?
Distinct habits
Figure 38: Nets of bottled water consumption, March 2007
APPENDIX
Consumer research
ACORN
Advertising data
Internal market environment
Figure 39: Body mass index cross-tabs, 2006
Figure 40: Agreement with selected attitudinal statements on health, 2002-06
Figure 41: Agreement with selected attitudinal statements on diet and health, by consumption of flavoured water, herbal and premium soft drink, 2006
Broader market environment
Forecast adult population trends
Figure 42: Forecast adult population trends, by socio-economic group, 2001-11
Trends in age structure
Figure 43: Trends in the age structure of the UK population, by gender, 2001-11
Household size
Figure 44: UK households and one-person households, 2000-10
Competitive context
Figure 45: Penetration and frequency of consumption of soft drinks, by type, by country, 2005
Who’s innovating?
All in a good cause
I’m a Celebrity – get me a bottled water deal
Market value and forecast
Figure 46: UK sales of bottled water*, by volume and average price, 2002-07
Figure 47: UK retail value sales of bottled water*, 2002-07
Factors used in the forecast
Consumer 1 – Detailed demographics
Figure 48: Consumption of bottled water – 11-14-year-olds, 2002-06
Figure 49: Still or sparkling – 11-14-year-olds, 2002-06
Figure 50: Where bottled water is drunk – 7-10-year-olds, 2006
Figure 51: Where bottled water is drunk – 11-14-year-olds, 2002-06
Figure 52: Consumption of bottled water – 7-14-year-olds, by gender, age, socio-economic group and region, 2006
Figure 53: Consumption of bottled mineral water (non-flavoured) in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel’s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
Consumption of flavoured water, herbal and premium soft drinks
Figure 54: Consumption of flavoured water, herbal and premium soft drinks in the last 12 months, 2002-06
Stagnation in flavoured water consumption
Plain v flavoured water – different demographics
Functional water for the over-65s?
Figure 55: Consumption of flavoured water, herbal and premium soft drinks in the last 12 months, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel’s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car ownership, 2006
Consumer 2 – Detailed demographics
Figure 56: Types of water drunk, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, daily Internet usage, supermarket usage, mobile phone provider, TV reception and smoker/non-smoker, March 2007
Figure 57: Main reasons for drinking water, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, daily Internet usage, supermarket usage, mobile phone provider, TV reception and smoker/non-smoker, March 2007
Figure 58: Important factors when choosing bottled water, March 2007
Figure 59: Important factors when choosing bottled water, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, daily Internet usage, supermarket usage, mobile phone provider, TV reception and smoker/non-smoker, March 2007
Figure 60: Important factors when choosing bottled water, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, daily Internet usage, supermarket usage, mobile phone provider, TV reception and smoker/non-smoker, March 2007
Figure 61: Reasons for not buying bottled water, by gender, age, region, socio-economic group, daily and Sunday newspaper readership, household income, presence of children, daily Internet usage, supermarket usage, mobile phone provider, TV reception and smoker/non-smoker, March 2007
Consumer 3 – Detailed demographics
Repertoires
Figure 62: Repertoire of influences when buying bottled water, by gender, age, socio-economic group, region, newspaper readership, household income, presence of children, supermarket usage, mobile phone provider, satellite TV and smoker/non-smoker, March 2007
Figure 63: Repertoire of influences when buying bottled water, March 2007
Figure 64: Repertoire of influences when buying bottled water, by reasons for drinking bottled water, March 2007
Figure 65: Repertoire of influences when buying bottled water, by influences when buying bottled water, March 2007
Figure 66: Tap versus bottled water nets, by gender, age, socio-economic group, region, newspaper readership, household income, presence of children, daily internet usage, supermarket usage, mobile phone provider, satellite TV and smoker/non-smoker, March 2007
Figure 67: Tap versus bottled water nets, March 2007
Figure 68: Tap versus bottled water nets, by reasons for drinking bottled water, March 2007
Figure 69: Tap versus bottled water nets, by influences when buying bottled water, March 2007
Figure 70: Tap versus bottled water nets, by reasons for not drinking bottled water, March 2007
Figure 71: Tap versus bottled water nets, by gender, age, socio-economic group, region, newspaper readership, household income, presence of children, supermarket usage, mobile phone provider, satellite TV and smoker/non-smoker, March 2007
Figure 72: Tap versus bottled water nets, March 2007
Figure 73: Tap versus bottled water nets, by reasons for drinking bottled water, March 2007
Figure 74: Tap versus bottled water nets, by influences when buying bottled water, March 2007

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