The bottled water industry has grown strongly over the past five years, along with population growth and a growing focus on healthy, convenient beverages – and so has competition in the industry, including from private-label brands.
That means that revenue has grown at a slower rate than volumes, according to IBISWorld.
Another issue faced by this industry is growing consumer concern in regard to environmental footprint.
Marketing and advertising spend is also high in this space to help differentiate brands.
This has opened the way for edgy new approaches, such as that taken by Thankyou Group, a social enterprise that exists for the sole purpose of funding safe water projects in developing countries.
Its founder Daniel Flynn says: "The fact that we can inspire Australians to change lives for the better through the purchase of a simple product is what drives us.”
Liquid water enhancers, like those just launched by Schweppes offer water drinkers a new dimension, with concentrated flavours packaged in a neat, pocket-size format.
The Australian Beverages Council CEO Geoff Parker says another industry challenge is to refute the notion that bottled water competes with tap water.
“Bottled water competes with all those other packaged beverages it shares shelf space with – on supermarket shelves and in petrol stations. Water is cheapest when it comes out of the tap – but when out and about and a tap or bubbler is not available, bottled water is a legitimate option for people to have a zero kilojoule convenient hydration beverage,” he says.
“Also, those who talk about banning bottled water purely on an environmental basis are ignoring the fact that as a commercial beverage, water has one of the lowest environmental footprints."
Canadean predicts that packaged water will overtake global carbonates consumption to reach over 233 billion litres in 2015, while carbonates are expected to grow at a slower pace to around 227 billion litres.
To put this growth in perspective, back in 2010 the global population consumed only 170 billion litres of packaged water, compared to 215 billion litres of carbonates.
KEY OPPORTUNITIES
The convenience of bottled water is a key feature for the bottled water category, says Parker. People are increasingly out-and-about and seeking a consistently good-tasting, convenient, zero-kilojoule option.
"That is the core strength and value proposition of bottled water for consumers," he says.
