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Bottled Water - UK - March 2017

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Health concerns and low prices drive sales growth 2011-16
Soft drinks levy and economy to determine sales 2016-21
Figure 1: Forecast of UK sales of bottled water, by value, 2011-21
Unflavoured waters gain most from consumer sugar concerns
Greater volatility in on-premise sales
Soft drinks levy could strengthen category
Companies and brands
Volvic remains market leader but volume sales fall
Figure 2: Leading brands’ shares in the UK retail bottled water market, by value, 2015/16*
L/N/R sugar claims for flavoured water rise in 2016
Category blurring continues into 2016
Advertising spend rises in 2016
Evian is the most trusted brand, while Glacéau is the most likely to be seen as different
The consumer
Overall usage unchanged, but flavoured sparkling usage frequency rises
Figure 3: Usage frequency for bottled water, by type, December 2016
Future direction of the economy significant for bottled water sales
Figure 4: Bottled water drinking and buying behaviours, December 2016
Only a minority see bottled water as bad for the environment, but backlash risks are high
Emphasising environmental credentials is a promising means to appeal
Figure 5: Attitudes towards bottled water, December 2016
What we think
ISSUES AND INSIGHTS
Strong consumer interest in the environment provides opportunities for those best able to trade on positive credentials
The facts
The implications
Make-your-own flavoured water kits would cater to consumer desire for customisation
The facts
The implications
Parents’ strong tendency to buy bottled water provides scope for expansion in children’s products
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Health concerns and low prices drive sales growth over 2011-16
Soft drinks levy and economy to determine sales 2016-21
Unflavoured waters gain most from consumer sugar concerns
Greater volatility in on-premise sales
Soft drinks levy could strengthen category
MARKET SIZE AND FORECAST
Bottled water volumes benefit from low prices and sugar controversy over 2011-16
Figure 6: UK value and volume sales of bottled water, 2011-21
Forecast
Soft drinks levy likely to drive up volume sales over 2016-21
State of the economy could have conflicting effects
Demographic changes provide a boost and a challenge
Effects of exchange rates to be limited, but overall inflation to push up values over 2016-21
Figure 7: Forecast of UK sales of bottled water, by value, 2011-21
Figure 8: Forecast of UK sales of bottled water, by volume, 2011-21
Forecast methodology
MARKET SEGMENTATION
Unflavoured waters benefit particularly from heightened sugar concerns
Figure 9: Retail value and volume sales of bottled water, by segment, 2014-16
Fortified water benefits from increased availability and health trends
Greater volatility in on-premise sales
Figure 10: Value and volume sales of bottled water, by retail and on-premise channels, 2011-16
MARKET DRIVERS
State of the economy is key to future sales
Pound’s depreciation could lead to inflation for imported waters
Health concerns over sugar continue
Soft drinks tax could give a boost to unflavoured water
Some flavoured variants could lose out
Government advises parents to limit their children’s intake of sugary drinks
Changing population dynamics provide a challenge and an opportunity
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Volvic remains market leader but volume sales fall
L/N/R sugar claims for flavoured water rise in 2016
Category blurring continues into 2016
Advertising spend rises in 2016
Evian is the most trusted brand, while Glacéau is the most likely to be seen as different
MARKET SHARE
Mixed results for Danone’s brands
Increased advertising and range extensions helps Glacéau to grow
Figure 11: Leading brands’ sales and share in the UK bottled water retail market, by value and volume, 2013/14-2015/16
Figure 12: Leading manufacturers’ sales and share in the UK bottled water retail market, by value and volume, 2013/14-2015/16
LAUNCH ACTIVITY AND INNOVATION
Environmentally friendly packaging remains the top claim, but little real innovation
Figure 13: New product launches in the UK bottled water market, by top 20 claims (sorted by 2016), 2012-16
L/N/R sugar claims rise for flavoured water
CCE targets parents’ health concerns with Capri-Sun Fruity Water
Artificial sweeteners the primary sugar substitute, but some use of alternatives
Category blurring continues into 2016
Between flavoured waters and juice drinks…
…and coloured sparkling flavoured waters, offering competition to CSDs
Cucumber waters appear from smaller brands looking to appeal to desire for less sweet tastes
ADVERTISING AND MARKETING ACTIVITY
Advertising spend rises in 2016
Figure 14: Total above-the line, online display and direct mail advertising expenditure on bottled water, by top advertisers (sorted by 2016), 2012-16
CCE overtakes Danone as largest advertiser
Pushing a message of simplicity and purity with seasonal summaries
Beacon campaign pushes out-of-home recommendations
Promoting associations with Christmas to encourage winter drinking
Danone takes multiple approaches to promoting Volvic in 2016
Sports-led focus for Volvic’s plain variants
Flavoured variants portrayed as a way for people to express their individuality
Volvic Juiced shown as a mood-booster
Volvic draws on volcanic origins to promote inner strength
Evian continues its ‘Live Young’ campaign
AG Barr supports Rubicon Spring launch
Nielsen Ad Intel coverage
BRAND RESEARCH
What you need to know
Brand map
Figure 15: Attitudes towards and usage of selected brands, January 2017
Key brand metrics
Figure 16: Key metrics for selected brands, January 2017
Brand attitudes: Evian is the most trusted brand
Figure 17: Attitudes, by brand, January 2017
Brand personality: Volvic is seen as the most fun
Figure 18: Brand personality – Macro image, January 2017
Brand personality: Glacéau is seen as stylish and sophisticated
Figure 19: Brand personality – Micro image, January 2017
Brand analysis
Glacéau Smartwater stands out from other brands
Figure 20: User profile of Glacéau Smartwater, January 2017
Volvic scores highest for taste but fails to stand out
Figure 21: User profile of Volvic, January 2017
Evian is the brand most seen as worth paying more for
Figure 22: User profile of Evian, January 2017
Highland Spring enjoys favour among people in Scotland
Figure 23: User profile of Highland Spring, January 2017
Buxton could do more to showcase its support for the environment
Figure 24: User profile of Buxton, January 2017
THE CONSUMER – WHAT YOU NEED TO KNOW
Overall usage unchanged, but flavoured sparkling usage frequency rises
Future direction of the economy influential for bottled water sales
Only a minority see bottled water as bad for the environment, but backlash risks are high
Emphasising environmental credentials is a promising means to appeal
USAGE OF BOTTLED WATER
71% drink bottled water, with sugar focus boosting sparkling variants
Only a minority drink bottled water daily
Figure 25: Usage frequency for bottled water, by type, December 2016
Ageing population could limit volume sales growth
Figure 26: Usage of bottled water (any type), by age, December 2016
Filtered water a potential rival
Environmental concerns help to drive water filter usage
BOTTLED WATER BUYING OCCASIONS
Out-of-home occasions dominate, but over half buy to drink at home
Figure 27: Bottled water buying occasions, December 2016
Designer packaging could encourage special occasion usage
Opportunities for expansion in lunchbox formats
BOTTLED WATER DRINKING AND BUYING BEHAVIOURS
Sugar concerns prompt switching
L/N/R sugar flavoured waters will need to strongly emphasise this attribute
Consumer suspicions of artificial sweeteners present a barrier to reformulation
Figure 28: Bottled water drinking and buying behaviours, December 2016
The future direction of the economy is pivotal for bottled water sales
Flavoured water especially vulnerable to spending cutbacks
Make-your-own flavoured water kits would cater to consumers’ desire for customisation
ATTITUDES TOWARDS BOTTLED WATER
Bottled water is seen as bad for the environment by a significant minority
Figure 29: Attitudes towards bottled water, December 2016
Strong consumer interest in environmentally friendly options
Recycled plastic bottles have strong appeal
Demonstrating environmental commitments should provide a boost
Need to make environmental policies more prominent
Funding conservation projects would allow companies to demonstrate their commitment to the environment
Need to make charity links more tangible
QUALITIES ASSOCIATED WITH FLAVOURED WATER VS JUICE DRINKS
Flavoured water is associated with positive attributes such as hydration and refreshment
Figure 30: Qualities associated with flavoured water vs juice drinks, December 2016
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Figure 31: Forecast of UK sales of bottled water, by value, best- and worst-case, 2016-21
Figure 32: Forecast of UK sales of bottled water, by volume, best- and worst-case, 2016-21
Forecast methodology

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