Health factor driving water sales worldwide
done little to dent sales of colas and other sugar-laden fizzy
drinks (not least because of the proliferation 'low and light'
variants of these drinks) but they have certainly had a major
effect on sales of packaged water, which have surged by more than
65 per cent since 1997, according to a recent report from
Canadean.
While the US remains the spiritual home of carbonates, it is western Europe which leads the way in terms of packaged water consumption, accounting for almost 40 per cent of total consumption and with a per capita figure some six times the world average.
But western Europe is not only the largest regional market, it is also the most developed, according to the Global Packaged Water Report. It is dominated by Italy, France, Spain, Belgium and Germany, which enjoy a significant combined share. Italians in particular are very heavy drinkers and per capita consumption is expected to exceed 200 litres by 2006.
As consumers adopt healthier lifestyles, they are becoming increasingly concerned about the quality of tap water. Scandinavia, which enjoys exceptionally high quality tap water, is therefore unsurprisingly the nation with the lowest consumption.
Despite its predilection for carbonates, North America is nonetheless the second largest market for packaged water, and has seen consumption more than double since 1997. In fact, average annual growth over this period is bettered only by Asia.
Still water is the leading segment in the North American market, as the share of consumption attributable to sparkling is minor, and declining. Spring water is also decreasing rapidly as the main growth continues to be delivered by distilled brands, with the report predicting a market share for spring water of no more than 5 per cent at the end of 2003 - a huge decline from the estimated 25 per cent less than a decade ago.
The marketing might of the likes of Coca-Cola and PespiCo, both of which have distilled water brands (Dasani and Bonaqua respectively), is largely responsible for the major gains made by what is essentially distilled tap water, and the recent launch of Dasani in France highlighted fears that a similar pattern could emerge in Europe - although spring water is so dominant there - and the major brands are increasingly owned by groups with equally large marketing budgets such as Danone and Nestlé - that any change would inevitably take far longer to achieve.
Third placed Asia has accelerated fastest in recent years, according to Canadean, with the huge population combined with very low per capita consumption offering huge potential for further growth. Interestingly, sparkling water is not widely viewed as a beverage and tends to be consumed mainly by tourists, and in fact sparkling water is increasingly being marketed as a distinct product across the world, the report suggests.
Overall, packaged water sales are expected to continue to rise sharply, providing much of the incremental volume for the soft drinks industry as a whole, Canadean concluded. As would be expected with such a potentially lucrative market, competition looks to be intensifying, but there should still be plenty of opportunity for price positioning, particularly in the more sophisticated markets.
