Bottled Water - UK - March 2019

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Sales of bottled water continue to grow strongly
Uncertainties ahead for bottled water
Figure 1: Forecast of UK value sales of bottled water, 2013-23
Unflavoured still water accounts for two thirds of value retail sales
Sugar concerns lead shift away from sugary drinks
Consumers are concerned about plastic waste
Threat to bottled water from usage of reusable bottles
Companies and brands
Highland Spring and Volvic outperform the market
Nestlé Pure Life and Rubicon Spring also perform strongly
Figure 2: Leading brands’ sales and shares in the UK bottled water retail market, by value, 2017/18*
Majority of new launches come from flavoured waters
L/N/R sugar claims feature on nine in ten flavoured water launches
Functional health claims hope to add differentiation
Brands focusing on more sustainable packaging
Water in cans increasing from small base
Big bottled water brands lack differentiation
The consumer
Three quarters of adults drink bottled water
Figure 3: Frequency of drinking bottled water, by type, December 2018
Nearly a third of adults use water filter products
Best option out of home a reason for drinking for more than a third
Being seen as healthier than other drinks also drives usage
Figure 4: Reasons for drinking bottled water, December 2018
Efforts to reduce sugar are helping bottled water
Bottled water at risk from people opting more for tap water
Consumers need convincing on functional claims
Figure 5: Behaviours relating to bottled water, December 2018
Concern around plastic is a major issue for industry
Source of water and purity is important
Figure 6: Attitudes towards bottled water, December 2018
What we think
ISSUES AND INSIGHTS
Plastic packaging waste concerns are a major issue for industry
The facts
The implications
Bottled water’s healthier image needs stretching to maintain growth
The facts
The implications
Provenance and purity will become increasingly important
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Sales of bottled water continue to grow strongly
Move away from sugary drinks boosts sales
Uncertainties ahead for bottled water
Unflavoured still water two thirds of value retail sales
Sugar concerns lead shift away from sugary drinks
Consumers are concerned about plastic waste
Plastic particles in water are another worry
Threat from usage of reusable bottles
Growth in number of older kids/teenagers
MARKET SIZE AND FORECAST
Sales of bottled water continue to grow strongly
Figure 7: UK value and volume sales of bottled water, 2013-23
The future
Figure 8: Forecast of UK value sales of bottled water, 2013-23
Figure 9: Forecast of UK volume sales of bottled water, 2013-23
Forecast methodology
MARKET SEGMENTATION
Unflavoured still water still accounts for two thirds of value retail sales
Flavoured sparkling sees strong growth
Figure 10: UK retail value and volume sales of bottled water, by segment, 2016-18
Long run of growth for retail and on-premise sales
Figure 11: UK value and volume sales of bottled water, by retail and on-premise channels, 2013-18
MARKET DRIVERS
Soft Drinks Industry Levy came into effect in April 2018
Levy applies from 5g of sugar per 100ml
Healthy eating is high on consumers’ radars, with sugar the top concern
PHE and media put sugar in the spotlight
More people strive to eat healthily
Sugar concerns lead shift away from sugary drinks
Concern around plastic poses a major issue for bottled water industry
Consumers are concerned about plastic waste
Government considers deposit return scheme and announces tax on plastic packaging with less than 30% recycled content
Plastic particles in water are another source of worry
Threat from usage of reusable bottles and free water refill stations
Growth in number of older kids/teenagers
Figure 12: Trends in the age structure of the UK population, 2013-23
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Highland Spring and Volvic outperform the market
Nestlé Pure Life and Rubicon Spring also perform strongly
Majority of new launches come from flavoured waters
L/N/R sugar claims feature on nine in ten flavoured water launches
Functional health claims hope to add differentiation
Brands focus on more sustainable packaging
Water in cans increasing from small base
Flavoured waters take larger share of advertising
Big bottled water brands lack differentiation
Glaceau Smartwater seen as the most innovative
MARKET SHARE
Highland Spring and Volvic outperform the market
Nestlé Pure Life and Rubicon benefit from children’s and flavoured offering
Figure 13: Leading brands’ sales and shares in the UK bottled water retail market, by value and volume, 2016/17 and 2017/18
START-UPS AND DISRUPTORS – CASE STUDIES
CanO Water
What is it?
Founded:
Company mission statement:
Founder’s story:
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Figure 14: CanO Water, product list, February 2019
Media profile
Social media metrics
Figure 15: Social media metrics for CanO Water as of February 2019
The brand’s view
Sources of funding and support:
Target audience:
What consumer needs does the range meet?
Product stockists
Looking to the future
Aqua Esse
What is it?
Founded:
Company mission statement:
Founder’ story:
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Figure 16: Aqua Esse, February 2019
Media profile
Social media metrics
Figure 17: Social media metrics for Aqua Esse as of February 2019
The brand’s view
Sources of funding and support:
Target audience:
What consumer needs does the range meet?
Product stockists:
Looking to the future:
LAUNCH ACTIVITY AND INNOVATION
Majority of new launches come from flavoured waters
Less sweet flavours attract activity
Brand extension and category blurring continues
Figure 18: New product launches in the UK bottled water retail market, by segment, 2014-18
Flavoured waters seen as more tasty and exciting than unflavoured
Marked variation between perception of individual products
Figure 19: Perception map of attribute performance of flavoured bottled water in comparison to bottled water in the UK bottled water market, April 2018-March 2019
L/N/R sugar claims feature on nine in ten flavoured water launches
Figure 20: Share of flavoured bottled water launches featuring L/N/R sugar claims, 2014-18
Functional health claims hope to add differentiation
Figure 21: Share of flavoured and unflavoured bottled water launches featuring functional claims, 2014-18
Waters tap into interest in protein
Number of other new launches promoting health and wellbeing benefits
Figure 22: Examples of new products making functional claims in bottled water, 2018
Addressing concerns about plastic
Brands focusing on more sustainable packaging
Figure 23: Examples of new water products in more sustainable packaging, 2018
Water in cans increasing from small base
Figure 24: Share of new product launches in the UK bottled water retail market in cans, 2014-18
Figure 25: Examples of new water products in cans, 2018
Sparkling water launches now dominated by flavoured
Figure 26: New sparkling product launches in the UK bottled water market, by segment, 2014-18
Figure 27: Examples of new flavoured products in sparkling bottled water, 2018 and 2019
ADVERTISING AND MARKETING ACTIVITY
Flavoured waters taking larger share of advertising
Figure 28: Total above-the line, online display and direct mail advertising expenditure on bottled water, by type, 2015-18
Britvic Soft Drinks is the biggest spender in water
Figure 29: Total above-the line, online display and direct mail advertising expenditure on bottled water, by advertiser, 2015-18
Volvic focuses on health and lifestyle messages
Glaceau Smartwater announces new UK brand ambassador
San Pellegrino takes viewers on a journey
Robinsons emphasises real fruit and spring water combination
Rubicon Spring uses animated humour
Fit Water focuses on New Year resolutions and exercise
SodaStream launches local advertising campaign
Figure 30: SodaStream Facebook sponsored post, February 2019
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 31: Attitudes towards and usage of selected brands, January 2019
Key brand metrics
Figure 32: Key metrics for selected brands, January 2019
Brand attitudes: Evian is the most trusted brand
Figure 33: Attitudes, by brand, January 2019
Brand personality: San Pellegrino seen as less accessible than other brands
Figure 34: Brand personality – Macro image, January 2019
Highland Spring seen as most traditional
Figure 35: Brand personality – Micro image, January 2019
Brand analysis
More than four in ten see Volvic as refreshing
Figure 36: User profile of Volvic, January 2019
Evian is the most trusted brand
Figure 37: User profile of Evian, January 2019
Highland Spring seen as good value more than other brands
Figure 38: User profile of Highland Spring, January 2019
Glaceau Smartwater is seen as the most innovative brand
Figure 39: User profile of Glaceau Smartwater, January 2019
Nestlé Pure Life lacks strong associations
Figure 40: User profile of Nestlé Pure Life, January 2019
San Pellegrino seen as more sophisticated and stylish than others
Figure 41: User profile of San Pellegrino, January 2019
THE CONSUMER – WHAT YOU NEED TO KNOW
Three quarters of adults drink bottled water
Younger people are the biggest bottled water drinkers
Nearly a third of adults use water filter products
Best option out of home reason for drinking for a third
Being seen as healthier than other drinks also drives usage
Efforts to reduce sugar are helping bottled water
Bottled water at risk from people opting more for tap water
Consumers need convincing on functional claims
Concern around plastic is a major issue for industry
Source of water and purity is important
USAGE OF BOTTLED WATER
Three quarters of adults drink bottled water
Figure 42: Usage of bottled water, by type, December 2016-18
Unflavoured still is the most popular type of water
Figure 43: Frequency of drinking bottled water, by type, December 2018
Younger people are the biggest bottled water drinkers
USAGE OF WATER FILTER PRODUCTS AND REUSABLE WATER BOTTLES
Nearly a third of adults use water filter products
Figure 44: Usage of water filter products at home, December 2018
More than half of adults carry reusable water bottles
Figure 45: Carrying of reusable water bottles out of home, December 2018
REASONS FOR DRINKING BOTTLED WATER
Bottled water is seen as best option out of home by more than a third
Figure 46: Reasons for drinking bottled water, December 2018
Bottled water being deemed good for hydration is a big reason for drinking it
Being seen as a healthier drinks option also drives bottled water usage
BEHAVIOURS RELATING TO BOTTLED WATER
People’s efforts to reduce sugar are helping bottled water
Figure 47: Behaviours relating to bottled water, December 2018
Bottled water at risk from people opting more for tap water
Consumers need convincing on functional claims
ATTITUDES TOWARDS BOTTLED WATER
Concern around plastic is a major issue for the industry
Figure 48: Attitudes towards bottled water, December 2018
Cartons and cans appeal widely as alternatives to plastic bottles
Source of water is important, microplastics are widely seen as concern
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology
Figure 49: Best- and worst-case forecast of total UK retail value sales of bottled water, 2018-23
Figure 50: Best- and worst-case forecast of total UK retail volume sales of bottled water, 2018-23
APPENDIX – MARKET DRIVERS
EFSA low-sugar threshold undercuts the SDIL threshold
APPENDIX – MARKET SHARE
Figure 51: Leading manufacturer’s sales and shares in the UK bottled water retail market, by value and volume, 2016/17 and 2017/18
APPENDIX – LAUNCH ACTIVITY AND INNOVATION
Figure 52: Share of new product launches in the UK bottled water retail market, by brands and private label, 2014-18
Figure 53: Share of new product launches in the UK bottled water retail market, by top 25 claims, 2014-18
Figure 54: Share of new product launches in the UK bottled water retail market, by package type, 2014-18
Figure 55: Share of new product launches in the UK bottled water retail market that are ‘sparkling’, 2014-18
Figure 56: Attribute performance of flavoured bottled waters in comparison to unflavoured bottled waters in the UK bottled water market, April 2018-March 2019