Credit Crunch, Climate and Carbon Footprints Challenge Bottled Water – Innova Market Insights

Europe accounted for about half of the bottled water launches tracked in The Innova Database in the first half of 2009, well ahead of North America on just over 20%. The bulk of launches in these markets, however, were made up of enhanced or flavored waters.

20/07/09 Launches of bottled water have been relatively static globally over the past few years, although there was a slight fall in activity recorded in the first half of 2009 in comparison with the same period in 2008, according to Innova Market Insights (www.innovadatabase.com). This could be attributed to a number of factors, including the credit crunch and poor summer weather in key European markets, as well as attacks from environmentalists over carbon emissions created by manufacturing plastic bottles and transporting water many miles for a consumer who, in the western world, could drink it straight from a tap at home.

Europe accounted for about half of the bottled water launches tracked in The Innova Database in the first half of 2009, well ahead of North America on just over 20%. The bulk of launches in these markets, however, particularly in North America, were made up of enhanced or flavored waters, which are not just used for hydration purposes and are thus less likely to be adversely influenced by the current setbacks in the market. The US bottled water market, for example fell 1% by volume in 2008, while the market for flavored and enhanced water rose by over 8%. This was not true across all markets, however, as all sectors of the UK retail market for bottled water fell in 2008, although still water fell over 8% by volume, while flavored water did better or, perhaps it might be said, slightly less badly, with a fall of just over 6%.
 
Looking at innovative product activity, Fonterra has launched its wh2ole bottled water drinks fortified with protein and fibre to aid satiety and “bridge the hunger gap” in New Zealand. In the US, there has been considerable activity in enhanced waters, and we saw the first vitamin-enhanced waters to use the PureVia zero-calorie stevia sweetener with the launch of PepsiCo’s SoBe Lifewater range infused with herbal ingredients. The US also saw the first omega 3-enriched waters with Zymes Omega Solutions’ OmegaChill range; Totally Organica, the first flavored sparkling water to be certified as organic; a range of 10-calorie vitamin fortified water drinks under the Glaceau VitaminWater10 range, now under the Coca-Cola umbrella; and Vapor Water from AriZona Beverages, described as a vapor-distilled product infused with a blend of electrolytes. Environmental pollutants are removed during distillation and the clean water is then combined with calcium, magnesium and potassium to increase hydration and enhance physical performance.
 
In Europe, there has been perhaps more focus on extending the range of flavored waters available in recent months. The Active O2 range from Adelholzener in Germany, for example, has been extended with coffee and fruit blends to include Mango + Coffee and Himbeer (Raspberry) + Coffee variants, but still featuring the Active O2’s trademark enhanced oxygen content of 15 times the standard level. The original Active O2 range was also launched in France in March 2009 in Cherry, Apple Kiwi and Orange Lemon flavors. Germany also saw the launch of Nestlé’s Pure Life still water brand in June 2009, as well St Leonhard’s AquaSola, which is claimed to be the first bottled water in Germany with a natural iodine content.
 
LuAnn Williams, Innova Market Insights’ Head of Research believes that with the problems facing bottled water in Europe and North America, it is likely that multinational companies, such as Nestlé and Danone, may increasingly turn to the emerging markets to maintain growth as they struggle to compete in the current climate. “The standard pure bottled water market is likely to face ongoing problems for the foreseeable future” she contends “and new product activity, as the Innova Database is currently illustrating, is likely to continue to focus on value-added and enhanced waters.”

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