Premium Bottled Waters Flood the Market

CHICAGO -- As the reigning champion of beverage-category growth, bottled water is the darling of the cold vault. And within it, sparkling, flavored and enhanced waters are the true stars.

From 2012 through 2017, bottled-water volume grew at a compound annual growth rate of 7.1% in the United States, according to Beverage Marketing Corp. During that same period, domestic sparkling grew its share of bottled-water sales in all channels from 2.7% to 5.8%.

In convenience stores, bottled water accounted for about 11% of all packaged-beverage sales in 2017, according to preliminary numbers from NACS’ State of the Industry Report of 2017 Data. C-stores’ bottled-water sales volume grew about 3% in 2017, while sales of premium water grew 10%, according to Nielsen.

As a result, the premium segment of the category has become the go-to area for innovation by beverage makers both old and new.

“On a pure growth basis, sparkling water is the fastest-growing segment, though off a small base,” said Gary Hemphill, managing director of research for Beverage Marketing Corp., New York. “Companies are using water as a springboard for innovation.”

All of the growth in the segment, however, is coming on the nonsweetened side, says Anthony Pitagora, senior manager of category and shopper solutions for Nestle Waters North America.

“There’s a big difference in trends for sweetened vs. unsweetened,” he says. Citing Nielsen data, Pitagora says sales of unsweetened sparkling water grew 30% in 2017, while sweetened waters declined 30%. “It’s not just the bubbles; it’s that migration of the diet soft-drink drinker looking for something healthier.”

Citing that desire for “healthier,” Hemphill says there are numerous entry points for manufacturers of enhanced water. “If you’re a small company looking to get into water, this is the place to do it because it’s tough to go head to head with the major [still] water brands,” he says. The benefit for c-store retailers is a higher ring because these premium products command a higher price.

Here’s a look at the variety of new premium waters flooding the market ...

Perrier is the granddaddy of the sparkling-water subcategory and the leading sparkling brand in c-stores, according to Nielsen. Brand owner Nestle Waters North America, Stamford, Conn., is doing its part to keep the brand fresh. “That really has been the key to our success,” says Jim Donker, director of business development. “It’s not just the bubble—it’s the flavors that make Perrier a migration point for the diet soft-drink drinker.” The newest flavor of Perrier is Peach, which debuted in April. Other flavors include Lime, L’Orange, Pink Grapefruit, Green Apple, Strawberry and Watermelon.

Nestle Waters also relaunched its regional sparkling brands in new packaging and flavors in the past year.

Other entrants:

• Voss Sparkling from Voss Water is now available in three flavors: Tangerine Lemongrass, Lemon Cucumber and Lime Mint.
• PepsiCo’s Bubly launched in February in eight flavors: Orange, Cherry, Lime, Strawberry, Apple, Mango, Grapefruit and Lemon.
• Coca-Cola Co.’s Dasani Sparkling Water added three new flavors: Meyer Lemon, Black Cherry and Lime.
• Waterloo Sparkling Water from Waterloo Sparkling Water Corp. is a line of flavored waters packaged in 12-ounce cans and available in seven flavors.
• Just Goods’ Just Water, packaged in 16.9-ounce paper cartons, added a line of waters “infused with a dash of fruit flavor” in three flavors: Lemon, Tangerine and Apple Cinnamon.

Coca-Cola Co. launched a nutrient-enhanced extension of its popular vitaminwater line in late 2017. The drinks come in three flavors: move it (strawberry black cherry), werk it (orange mango) and pump it (lemon lime). The drinks offer “sports drinklevel hydration” and electrolytes from natural sources such as coconut water and sea salt.

“Millennials are driving much of the demand for premium water, as they seek new experiences and flavors,” says Scott Wiley, senior manager of category insights, water, tea, coffee, for Coca-Cola Co., Atlanta. “Economic recovery and health and wellness trends have also led to a growing demand for premium products. And we know that 45% of consumers will purchase a beverage to impress, feel cool and look good.”

Other entrants:

• Verday Chlorophyll Water promotes healthy skin, can aid in weight loss and boosts the immune system, according to manufacturer Verday.
• Lalpina Hydrogen Energy Booster is a hydrogen-infused water that provides a natural energy boost, according to manufacturer American Premium Water.
• Fizzique is “the world’s first sparkling protein water,” with 20 grams of protein, zero carbs and 80 calories in each 12-ounce can, according to manufacturer Fizzique.
• Oxigen from Formula Four Beverages is a distilled bottled water infused with O4, an extra-dense oxygen molecule, to speed absorption of the water in the body.

Essentia Water is an ionized alkaline bottled water introduced in 1998 and relaunched in 2017. Promising “better hydration,” the brand grew c-store unit sales nearly 118% in 2017, according to IRI.

“Essentia achieves its high pH through our proprietary ionization process, which removes acidic ions and delivers a smooth, clean taste,” says Mike Sharman, vice president of sales for Essentia Water LLC, Bothell, Wash. “This fact resonates with our core consumers (millennials ages 18-34) who tend to take the time to become knowledgeable and educated about a product prior to making a purchase.”

Other entrants:

• Perfect Hydration has an ideal alkalinity (9.5+) for hydrating drinkers, plus electrolytes to speed absorption, according to manufacturer Perfect Hydration.
• Dr Pepper Snapple Group (DPSG) launched BodyArmor SuperWater in November. Carrying over the “superior hydration” mantra of the original BodyArmor sports drink, the new water boasts a balanced pH and added electrolytes to speed hydration.
• Alkaline88 is made with a state-of-the-art, proprietary electrolysis process that “produces alkaline water for a balanced lifestyle,” according to manufacturer Alkaline Water Co.

In October 2017, Green-Go launched Hint of Lemon Organic Cactus Water, which it said contains anti-inflammatory properties, helps clear up eczema and has hydration benefits. The beverage is said to be derived from “the nutrient-rich paddle of the nopal, or prickly pear, cactus.”

Other entrants:

• Blossom Water marries “complementary natural fruit and flower essences [with] just the right amount of sweetness,” according to its manufacturer, Blossom Water LLC.
• Caliwater says its Caliwater Cactus Water “is the original plant-based water powered by the prickly pear cactus fruit.”
• Treo Organic Birch Water Infusion is an organic fruit drink infused with water tapped from birch trees that manufacturer Treo Brands LLC says is naturally hydrating.
• Endo Water is a pH-balanced water infused with a 99.9% pure cannabinoid-rich hemp oil that allows the cannabinoid to penetrate cells as opposed to being absorbed by the body’s digestive system, providing antioxidants and improving sleep, according to manufacturer Endo Brands.
• KiKi Maple Sweet Water is made from “the pure liquid that is collected from the sugar of Canadian maple trees,” according to manufacturer Troll Bridge Creek. It’s said to provide vitamins, minerals and electrolytes for a healthy lifestyle.

Beverage makers straddling the water and energy-drink categories often market their products as a healthier alternative to traditional energy drinks, with healthier ingredients and less sugar. For example, Avitae launched a few years ago as a still, caffeinated bottled water. It’s now available in a sparkling version in five flavors.

“Avitae is healthy hydration that not only provides consumers with the instant go they are looking for to power through their day but also a zero-calorie, zero-sugar beverage option they can feel good about,” says Norman Snyder, president and CEO of Cleveland-based Avitae USA LLC.

Other entrants:

• Hydrive Energy Water “provides consumers with the hydration benefits of water with the added function of energy from B vitamins and caffeine,” according to Hydrive Energy Water.
• BiPro Protein Water from BiPro USA contains 20 grams of protein and 100 milligrams of caffeine per serving with zero sugar, fat and carbohydrates.
• Hint Water from Hint Inc. added 60 milligrams of caffeine to its latest line extension of flavored bottled water, dubbed Hint Kick.

DPSG’s Bai brand tackled the bottled-water category in early 2018 with the launch of Bai Antioxidant Water in 1-liter bottles. The “superpurified” drink is pH-balanced and infused with the antioxidant selenium.

“The new formula plays up Bai’s core brand attributes and conveys a sense of action and movement that resonates with the active, health-conscious, on-the-go bottled-water consumer,” says Kevin Martello, vice president and general manager, national accounts, convenience and gas channel, for DPSG, Plano, Texas. “Premium functional water is the fastest-growing water segment because it offers value-added benefits to the consumer beyond simple hydration.”

Other entrants:

• Core Hydration—one of DPSG’s allied brands—took its Core Organic line of flavored antioxidant waters national in early 2018.
• Ax Water packs the antioxidant and anti-inflammatory benefits of the aronia berry into a 16-ounce drink, according to manufacturer Ax Water.

Source waters get their panache from their place of origination. DPSG’s Fiji is the original source water and continues to lead the premium-water segment by dollar and volume sales, according to Nielsen.

But plenty of new sources have sprung up in recent years. For example, New Age Beverages’ Aspen Pure is a naturally pH-balanced water sourced from the Rocky Mountains, the company says. In 2017, the brand added a functional line extension with Aspen Pure Probiotic, a water infused with more than 10 billion live CFUs (colony-forming units, or viable cells) and said to provide immunity-boosting and digestive-health benefits.

Water sourced from unique locations has potentially been free from contamination for millions of years, says Jay Barrow, head of marketing for New Age Beverages Corp., Denver.

“[That is] appealing to customers who may be concerned about the effects of environmental pollution on today’s water sources,” he says.

Other entrants:

• Talking Rain is now bringing Himalayan Water, bottled in India, to c-stores. >  Nothing Water bills its selfnamed brand as the “world’s purest spring water.” It is sourced from “a deep, subglacial artesian aquifer in Norway,” according to the manufacturer.
• Kopu is a “luxury” sparkling water from the Kopu Water Co. It is sourced from an aquifer thousands of feet below the dormant volcanoes of New Zealand’s Bay of Plenty.
• Kona Deep from Kona Deep Corp. comes from “an extraordinary deep ocean current” off the coast of Hawaii.
• Icelandic Glacial from Icelandic Water Holdings is sourced from Iceland’s Olfus Spring.
• CForce Artesian Water is bottled from a spring on the family ranch of actor Chuck Norris in Navasota, Texas. There, the artesian water naturally surfaces through ancient volcanic rock and flows into a deep, sustainable aquifer that’s naturally high in pH, according to manufacturer CForce Bottling Co.