Bottled Water Sales Bubble Up Thanks to Better-for-You Push

CHICAGO — As Americans continue to look for healthy, better-for-you alternatives to carbonated soft drinks, the bottled water category is reaching unprecedented heights.

New research from Mintel reveals that sales of bottled water increased 6.4 percent to reach $15 billion in 2015. Mintel expects sales to continue ascending at a rapid pace through 2020, with projected sales growth of 34.7 percent for the category, including 75.1-percent growth for the sparkling/mineral water/seltzer segment.

Consumer attitudes highlight that innovation in flavor is driving the category’s success, according to Mintel, with nearly half of bottled water drinkers (48 percent) saying they are drinking more flavored waters to replace high-sugared drinks.

Flavored bottled water consumption is highest among 18- to 34-year-old consumers (66 percent vs. 48 percent of consumers overall). They are also the most likely age group to consume any still bottled water (93 percent vs. 85 percent of overall consumers).

Consumers are also citing a wide range of interest in the functional attributes of bottled water. More than two in five (43 percent) are interested in bottled water enhanced with vitamins, while three in 10 agree the ideal bottled water should contain minerals (29 percent) and energy (29 percent).

When it comes to calorie-counting, consumers show a clear preference for zero-calorie bottled water (31 percent), according to Mintel, as opposed to less than 100-calorie offerings (13 percent).

The research also revealed consumers’ desire for bottled water that comes from the purest of products. Two in five say the ideal bottled water would have no artificial sweeteners (43 percent), artificial flavors (43 percent) or artificial colors (40 percent). More than that, 25 percent of consumers say their ideal bottled water would be GMO-free or organic (24 percent).

Additionally, as the demand for organic food and drink options continues to grow, Mintel research indicates 37 percent of consumers feel better about themselves when they buy organic foods and beverages.

“Bottled water brands benefit from the overarching consumer trend toward more healthful, better-for-you alternatives to unnatural and high-sugar drinks. This has spurred sales growth of bottled water with even greater projected growth over the next five years,” said Elizabeth Sisel, beverage analyst at Mintel.

“In the coming years, consumers will likely put even greater value on no artificial ingredients in bottled water. To capitalize on this trend, brands should emphasize free-from claims on packaging as they release new flavors and functions in order to engage the market’s most active consumers,” she continued. 

While bottled water drinkers indicate their overall top purchasing factor is price (62 percent), the majority are likewise interested in premium offerings. More than half (53 percent) prefer to drink premium bottled waters, while 39 percent agree bottled water is worth the added cost.

However, there is still some educating to be done as more than half of consumers (51 percent) are unfamiliar with premium water, according to Mintel.

“While price is a major purchasing factor for many consumers, the majority gravitate toward premium water offerings despite its typically higher cost,” Sisel concluded. “To attract the more price-conscious consumer, brands should look to incorporate product messaging that justifies a higher price point, as well as communicate the health benefits and sophistication of premium products in order to alleviate any confusion.”