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Bottled Water Is A Potential Growth Category That Can't Be Ignored
While major soft drink companies continue to battle declining carbonated soft drink sales, another segment continues to grow volume sales, and is now expected to overtake CSDs as the most consumed beverage worldwide this year. This beverage is none other than packaged water. According to the Canadean, consumption of packaged water will reach 233 billion liters in 2015, more than the intake of CSDs, which is estimated to be around 227 billion liters. The Coca-Cola Company, PepsiCo, and Dr Pepper Snapple have struggled to ramp up volumes in the ailing carbonated category in the U.S., which declined for the tenth consecutive year in 2014. Seeing how bottled water remains a high growth category, these companies might look to strengthen their water lineup and launch new products in this category to boost beverage sales going forward.
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While growth in the bottled water category is expected to continue outpacing growth in the CSD category in the next few years, most of this growth will come from emerging markets such as China, India, and Mexico–where clean tap water is not as easily available. In contrast, developed markets might not contribute much to the global bottled water growth. Packaged water in Germany, Italy, France, and Spain is forecast to grow at a CAGR of merely 1% between 2015-2020. However, an exception to this is the U.S., which remains the fastest growing bottled water market outside Asia, mainly as customers have grown more health conscious and look to trade-in their sugary soft drinks with healthier and more natural drinks–which bodes well for water. This is a trend that these large soft drink multinationals can’t ignore.
beverage volume sales in the U.S.
While trademark carbonated drinks Coke, Pepsi, and Dr Pepper all saw volume declines last year in the U.S., major water brands kept growing, as seen in the table below.