Consumers drink bottled water for a healthy and convenient beverage option.
As consumers continue seeking healthy beverages, bottled water and sports drinks have come to reflect the latest in cleaner labels, amino acid-added and mineral-infused beverages.
Bottled water was the top beverage in the U.S. by volume in both 2016 and 2017, respectively, growing by 7% in 2017, with 13.7 billion gallons consumed, according to the International Bottled Water Association (IBWA) and the Beverage Marketing Corp. (BMC).
Data from Persistence Market Research indicates the bottled water industry is projected to top $22 billion by the end of 2024.
Comparably, the flavored-seltzer market is growing by more than 10% annually, with the top five brands — Sparkling Ice, LaCroix, Perrier, San Pellegrino and Polar — now accounting for $1.2 billion in yearly sales, according to research group IBISWorld.
“At McLane, branded bottled water has grown approximately 4% year-to-date in consumer units and dollars,” said Michael Carlson, merchandising manager at McLane. “Historically, we have seen water grow 9-10% year over year, and we will continue to see steady growth in this category for the foreseeable future.”
The growth in bottled water is attributed to the healthier preferences that consumers are moving toward, along with the convenience factor, Carlson added.
In the convenience channel, it’s the traditional sports drinks and bottled water varieties that continue to prevail.
“Gatorade has still been able to maintain its popularity, despite seeing more and more competition in the sports drink market,” said Nicolette Jaeger, loyalty and food service manager at The PRIDE Stores Inc., a 12-store chain based in Warrenville, Ill. “Competitors like vitaminwater and Powerade have definitely made an indentation in the market, forcing Gatorade to reinvent itself.”
The competition in the category as well as scrutiny about sugar content have made the climate more challenging for sports drink sales in convenience stores. Bottled water flavors are tapping into this beverage demand.
“While Powerade has now carried Powerade Zero for a while now, 2018 is the first time Gatorade introduced a zero-sugar sports drink, Gatorade Zero,” Jaeger said. “While at The PRIDE Stores, Gatorade is still one of our top sellers, it definitely has some competition outside of its own market with beverages like Neuro, and even the water market has taken a few cues from the sports drink category.”
In water, the category began with purified brands, then moved to fruit flavors as an alternative to soft drinks.