G H Q
THE BOON OF
Consumer interest in bottled water continues
to rise, and the end is nowhere in sight.
BY SETH MENDELSON
THREE DECADES AGO, not only did the bottled water category essentially not exist, but was scorned as a non-starter by the few people who knew about it. After all, what consumer would be foolish enough to purchase a product that he or she
could get just by turning on the kitchen faucet?
Today, this category is on the verge of overtaking carbonated beverages as the largest beverage segment in unit sales. In fact, many industry observers predict that it will continue to grow by leaps and bounds
as more varieties of bottled water hit the marketplace and consumers
seek more ways to obtain safe, healthy and clean drinking water.
According to Chicago-based IRI, the bottled water category grew by
an impressive 8.2 percent in dollars and nearly 6. 5 percent in units over
the 52-week period ended Oct. 30. Total dollar sales for the category
in retail outlets, which includes supermarkets, drug stores, mass merchandisers and convenience stores, totaled about $14.7 billion, while
unit sales totaled about 7. 56 billion.
“When I first got into this business I would not even consider putting
bottled water on my store shelves,” says one retail official old enough
to remember the start of the category in the mid to late 1980s. “Who
would have thought that it would have developed into this type of cat-
egory, one where there are just so many different options?”
Well, that is the point of this category. Bottled water is not just about
simple H2O anymore. Not even close. Today there are all types of waters
on retail shelves, ranging from premium, like Evian to
private label brands like Ice River Spring Water; vita-
min and oxygen-infused brands; sparkling items; fla-
vored brands; and products that focus on kids or ath-
letes. Now there are even companies offering product in
non-traditional packaging, including paper cartons, to
catch the consumer’s eye. The bottom line is that this is
not your mom’s bottled water category anymore. In fact,
it may never have been.
“There is a market out there for everyone in this growing seg-
ment,” says Kevin Sherman, president and CEO of Irvine, Calif.-based
TrueDrinks. “The key is having the right product with the right ingre-
dients and merchandising it properly to the correct audience.”
The enthusiasm for the category is being felt virtually everywhere.
Suppliers, sensing consumer interest and demand, are rapidly intro-
ducing brands and varieties to capture as much attention as possible.
Retailers are making room in their beverage section for more and more
bottled water products, often at the expense of the beleaguered carbon-
ated beverage segment.
“It has been a remarkable ride,” says Tom Hipwell, vice president of
business development for Stamford, Conn.-based Nestlé Waters North
America. “From 2000 to today the category has
grown by more than 120 percent. That growth has
come because consumers see water as a product that
offers health and wellness.”
Manufacturers, big and small, are almost giddy
about the potential. “Collectively, the still and pre-
mium water categories have the highest dollar
growth of any beverage category,” says Scott Wiley,
senior manager, category insights for water, tea