Customized report service – Bottled water market in Canada and the United States

Key consumer trends in North America for the bottled water market

Health and wellness

In the North American market, flavoured water has become increasingly popular among millennials (1981-1996) and Generation Z (1997 to date) due to the growing awareness of risks associated with excessive consumption of sweets, high-calorie drinks, including carbonated soda and juice.

Soft drinks with low natural sweeteners (instead of artificial sweeteners), low sugar and with different levels of carbonation are gaining market share in the North American bottled water market. According to Global Data, the average consumption of carbonated soda and still drink beverages per capita in litre for Canadians has declined from 91.3 and 7.3 litres in 2010 to 71.5 and 5.2 litres, respectively in 2018.

Ecological packaging

North American consumers are expected to have more choices for products from green supply chains as the focus shifts to ethical consumption, including environmentally friendly packaging. As waste is subject to further scrutiny, such as hazardous plastics that harm ecosystems, consumer behavior will determine brand transparency in manufacturing as well as improved recyclability.

The increasing restrictions by local cities and government for the use of single-use plastics in packaging and the growing awareness of environmental protection can have a negative influence on the use of plastic containers. Having a bottled water product that has environmentally friendly packaging is a growing asset in the North American market.

Carbonated water

One of the most significant trends affecting the flavored bottled water market in North America is the dynamic growth of carbonated products. This segment continues to benefit from consumer migration to common sweet carbonate flavoured water as a healthier alternative to soft drinks due to the absence of artificial sweeteners, caffeine and flavour enhancers. The segment was once relatively small, consisting mainly of well-known imported brands and a handful of seltz products.

The carbonated bottled water segment is now an important and diversified one. The main drivers of this growth are clearly linked to the slowdown in sugar-carbonated consumption (that is, soda), as an increasing number of consumers have opted for healthier options. Distrust of artificial sweeteners is slowly leading North American consumers to bypass diet soft drinks, opting instead for flavored carbonated waters that are naturally calorie-free.

Premium options

North American consumers are buying premium bottled water (flavored or plain) as a healthy and convenient option. The perception of what is a premium bottled water product is complex because it's subjective and it differs from one consumer to another.

From a consumer's perspective, it can be related to the source of the water, which may have a distinct mineral composition or a link to a specific place or region, it can be related to the level of "purity", or it may be a premium bottled water product that has added functionalities (that is, vitamin).

Kid-friendly options

The market for sweetened and artificially flavored drinks for children is under pressure from a growing number of young North American families looking for flavored drinks while limiting the amount of sugar, artificial flavors and calorie intake. This results in market opportunities for flavored products for children including flavored bottled water products.

Retail sales

Carbonated water

National and local health organizations and associations in the United States (US) and Canada are attempting to reduce the consumption of sweetened soda pop to combat chronic health problems caused by high sugar drinks, which has been linked to diabetes, obesity and heart disease. As such, North American consumers (millennials and Gen Z) are looking to reduce sugar intake by opting for alternative carbonated products such as flavored bottle products.

Challenge

Migrating away from carbonated soft drinks (soda or juice) as they seek healthier alternatives. However, the average North American consumer switching from soda to flavoured water is still looking for a tasty and carbonated product.

Advice

A flavoured carbonated bottled water product that focuses its marketing strategy on "health promotion and low sugar content" should not underestimate the impact of "taste" when it comes to consumers' choice to buy or not.

The recent success of some of these products, such as Bubly and Lacroix, demonstrates that the market for flavored water products in the US and Canada is expanding rapidly.

Blackberry Sparkling Water

Company	PepsiCo
Manufacturer	PepsiCo
Brand	Bubly
Sub-category	Flavoured water
Market	United States
Date published	July 2019
Launch type	New packaging
Price in local currency	$0.75

Bubly Blackberry Sparkling Water has been repackaged in a new 12 fluid ounce recyclable can. It has been made with blackberry and other natural flavors, and is free from calories and sweeteners.

Companies and brands

In the US and Canada, companies operating in the flavored, enhanced and packaged bottled water market are developing and launching functional and flavored water in innovative ways to cater to growing consumer demand. Larger companies, like PepsiCo, Keurig, Dr. Pepper and Coca-Cola Co, have noted of the recent success of certain flavored and carbonated water products such as, LaCroix or Bubly. Carbonated and flavored waters are expected to play significant role in the portfolios of major beverage producers in North America.

Private labels follow market trends and have earned a growing share of the market for flavored and packaged water. For example, the market share held by private labels for flavored water products was 10% in 2016 - by 2019 this proportion had risen to 31.5%

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• Private Label: US$1,409.2 million (25.0%)
• Branded: US$4,235.1 (75.0%)

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• Private Label: US$1,496.8 million (45.4%)
• Branded: US$1,802.1 million (54.6%)

Description of above image

• Private Label: US$1,409.2 million (25.0%)
• Branded: US$4,235.1 (75.0%)

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• Private Label: US$10,415.9 million (37.5%)
• Branded: US$17,362.1 million (62.5%)

Brands in Canada

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• Other Private Label (PL): US$668.6 million (22.9%)
• Aquafina: US$514.7 million (17.6%)
• Nestle Pure Life: US$398.7 million (13.7%)
• Dasani: US$346.0 million (11.8%)
• President's Choice (PL): US$254.2 million (8.7%)
• Naya: US$230.1 million (7.9%)
• Others: US$183.4 million (6.3%)
• Perrier: US$174.5 million (6.0%)
• San Pellegrino: US$80.0 million (2.7%)
• Evian: US$70.0 million (2.4%)

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• Other Private Label (PL): US$668.6 million (22.9%)
• Aquafina: US$514.7 million (17.6%)
• Nestle Pure Life: US$398.7 million (13.7%)
• Dasani: US$346.0 million (11.8%)
• President's Choice (PL): US$254.2 million (8.7%)
• Naya: US$230.1 million (7.9%)
• Others: US$183.4 million (6.3%)
• Perrier: US$174.5 million (6.0%)
• San Pellegrino: US$80.0 million (2.7%)
• Evian: US$70.0 million (2.4%)

Brands in the United States

The biggest names in the beverage sector are acquiring brands to diversify their portfolios. Keurig Dr Pepper has agreed to acquire U.S.-based premium water company, Core Nutrition LLC for US$525 million. It's a fruitful environment for companies that can develop bottled water brands that appeal to today's consumers. It's also one that has beverage industry titans like Coca-Cola and Pepsi scanning the marketplace for potential acquisitions.

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• Others: US$2,347.7 million (48.1%)
• La Croix: US$1,337.9 million (27.4%)
• Other Private Label (PL): US$609.7 million (12.5%)
• Nestle Pure Life: US$229.9 million (4.7%)
• Dasani: US$119.8 million (2.5%)
• Perrier: US$109.6 million 2.2%
• Hint: US$50.2 million (1.0%)
• Arrowhead: US$41.6 million (0.9%)
• Poland Spring: US$18.9 million (0.4%)

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• Dasani: US$3,792.6 million (19.8%)
• Poland Spring: US$3,283.5 million (17.1%)
• Aquafina: US$2,559.1 million (13.4%)
• Other Private Label (PL): US$2,143.9 million (11.2%)
• Others: US$1,438.6 million (7.5%)
• Nestle Pure Life: US$1,407.3 million (7.3%)
• Sams Choice (PL): US$1,256.1 million (6.6%)
• Crystal Geyser: US$1,148.3 million (6.0%)
• Niagara: US$1,091.7 million (5.7%)
• San Pellegrino: US$1,039.8 million (5.4%)

Health and wellness

As enhanced bottled water products continue to generate growing demand in North America, the average consumer demand for products offering health and wellness benefits continues to grow for the flavored and packaged water categories.

Challenge

Millennials and Gen Z in particular, are expecting to get more from a traditional bottled water product (flavored or packaged), than just hydrating benefits. As the range of bottled water products with functionalities grows, their array of intended benefits also expands to include not only enhanced hydration through inclusion of electrolytes, but also vitamins, minerals and various other substances with diverse health claims.

Advice

Marketing around possible functionalities can help carbonated flavored and packaged water brands to stand out from the competition, as these products can position themselves as healthy alternatives from drinks already enjoyed by Millennials (energy drinks, healthy-oriented soft drinks, CSD, coffee).

Perfectly Balanced Water

Company	Core Nutrition
Sub-category	Water
Location of manufacture	United States
Date published	October 2019
Store name	Target
Store type	Mass merchandise/hypermarket
Launch type	New packaging
Price in local currency	US$2.49

Core Hydration Perfectly Balanced Water has been repackaged. The product is said to be ultra-purified in seven stages of purification process with a special combination of electrolytes and minerals to match the body's natural pH of 7.4 to stay hydrated and balanced. It is free from fluoride, chromium 6, MTBE, arsenic and chlorine, and retails in a 44-fluid ounce 100% recyclable bottle that is free from BPA.

#Energetic 100% Naturally Alkaline Spring Water

Company	Moodwater
Manufacturer	Moodwater
Brand	Moodwater
Sub-category	Water
Location of manufacture	Canada
Import status	Not imported
Store name	Provigo
Store type	Supermarket
Product source	Shopper
Launch type	New variety/range extension
Price in local currency	Can$2.29
Price in US dollars	1.74

Moodwater Express Yourself #Energetic 100% Naturally Alkaline Spring Water is described as the most funniest alkaline spring water in the world. This product has a pH value of eight and retails in a 1-litre BPA free bottle featuring the Facebook, Twitter and Instagram logos.

Note: These two product examples illustrate the growing trend among consumers that view beverages as a preventive nutritional opportunity. People are interested in functionality, and instead of asking "what's in that bottle", they wonder what that bottle does for me.

Product launch analysis

From January 2015 to August 2019, Mintel identified 1,604 new bottled water products in the North American market. Two thirds of these new launches were products identified as flavored water. Of the new products launched, 1,212 were launched in the American market.

New flavoured water bottle products

From January 2015 to August 2019, Mintel identified 1,092 new flavored bottled water products in the North American (857 in the U.S and 235 in Canada).

Type of flavors

Flavoured water is gaining popularity among consumers, especially Millennials and Gen Z, because of its various health benefits and the absence of surplus sugar often contained in juices and sodas. In addition, the variety of flavours available is the driving force behind market growth.

Lemon/lime remain the most popular flavors for bottled water products in North America followed by orange, strawberry and raspberry. Flavored water brands can also encourage consumption by innovating with familiar ingredients to appeal to local tastes.

Challenge

The Average North American consumer, especially Millennials and Gen Z. are seeking unique flavors in their water and other beverages.

Advice

Consumers wanting products labeled "fruit flavors" or "mix of fruits" are not as popular as they used to be. Consumers' perception of artificial flavours is not positive.

Challenge

Millennials and Gen Z in North America are educating themselves more and becoming more attentive to what they drink. Consumer perception of bottled water products containing artificial flavours is not positive. This means that some ingredients, such as sugar, are disappearing, while others - particularly natural and functional ingredients - are becoming the norm. The presence of high sugar content in different flavoured and functional waters hinders the success and marketing of these products.

Advice

Consumers are searching for convenient beverage options that offer nutritional and specific health benefits, including protein, vitamins and minerals, energy and relaxation support. At the same time, people want healthy, low-sugar or sugar-free products.

As lemon/lime has maintained its popularity for enhanced water and flavoured water products in the United States, other flavours have increased their popularity in the American market. Within the enhanced water category, flavors such as berries, orange and cherries have increased their presence between 2016 and 2019. Other flavours, often associated with juice products, have not captured the attention of American consumers, such as apple, pomegranate, peach and "other fruits". Within the favored water category, every major flavor, except "other fruits" have witnessed growth between 2016 and 2019.

Lime Flavored Sparkling Water Beverage

Company	Meijer
Brand	Meijer
Sub-category	Flavoured water
Market	United States
Store type	Supermarket
Date published	October 2019
Launch type	New packaging
Price in local currency	US$3.79

Meijer Lime Flavored Sparkling Water Beverage has been repackaged with a new look. This product contains natural lime flavor and other natural flavors, is free from gluten, calories, sweeteners, sodium and caffeine, and retails in a 144-fluid ounce pack, containing 12 12-fluid ounce cans and featuring a recipe suggestion.

Naturally Orange Essenced Sparkling Water

Company	La Croix Sparkling Water
Distributor	La Croix Sparkling Water
Brand	La Croix
Sub-category	Flavoured water
Market	United States
Location of manufacture	United States
Store type	Supermarket
Launch type	New packaging
Price in local currency	US$2.99

La Croix Naturally Orange Essenced Sparkling Water has been repackaged in a newly designed 96-fluid ounce recyclable pack containing 8 x 12-fluid ounce units. This kosher product is free from calories, sweeteners and sodium, and is said to be innocent.

Packaging and sustainability

Environmental challenges are becoming increasingly known, especially by urbanite Millennials and Gen Z., prompting products with environmentally friendly packaging. Beverage companies are responding to environmental concerns by becoming more eco-friendly. Single-use plastic water bottles are an ongoing concern, especially given the popularity of bottled water.

From 2015 to August 2019, the plastic bottle packaging-type for flavored water products dominated the North American market. However, a recent trend in Canada and the United States has a number of new products produced in can or cardboard format. Gradually, companies seem to launch new packaging to make it more environmentally friendly, including aluminum cans and paper boxes.

In 2015, 75.6% of new products launched on the North American market were in bottle format. By 2018, this proportion had fallen to 52%.

Challenge

Consumers want water producers to demonstrate responsibility and action to reduce plastic pollution. Single-use plastic product such as water bottles are increasingly getting public condemnation by local and national associations, cities and local governments in the U.S and in Canada.

Advice

Sustainable packaging reinforces the eco-credibility of a brand that has strong ethics. Bottled water products that have biodegradable packaging, recyclable or complemented by initiatives for the return of packaging and the collection of discarded packaging, are widely accepted by consumers.

Challenge

The sale of a high quality flavoured water product in a cardboard box requires a packaging that must reflect traditional and elegant designs. This will attract consumers' attention and encourage them to consume more.

Advice

Disrupting the idea that soft drinks must come in a bottle or can, some brands adapt their packaging to new and innovative types of recipients based on consumer needs. In certain cases, the product is part of the packaging and it can be customized based on individual preferences.

Alternative water bottle packaging examples

Water Infused with Apple Essence (A product marketed for children)

Company	Hint
Brand	Hint
Sub-category	Flavoured water
Market	United States
Store name	Amazon.com
Store type	Internet/mail order
Date published	August 2019
Launch type	New variety/range extension
Price in local currency	US$19.99

Hint Water Infused with Apple Essence is described as parent approved water with fruit taste. This kosher certified product is free from juice, sugar, sweeteners and GMO, and retails in a 54-fluid ounce recyclable pack containing eight 6.75-fluid ounce units with straws and featuring the FSC Mix logo.

This product is particularly interesting as it is marketed for parents who want to give their children an alternative to fruity juices, often containing a high sugar content.

Organic Lemon Infused Spring Water

Company	Just Goods
Brand	Just Water Infused
Sub-category	Flavoured water
Market	United States
Store name	Whole Foods Market
Store type	Natural/health food store
Date published	August 2019
Launch type	New product
Price in local currency	US$1.29

Just Water Infused Organic Lemon Infused Spring Water is said to be a responsibly sourced USDA Organic and kosher certified excess spring water from a small upstate NY community bought at 6 times the municipal rate that is said to put more into the local economy. The water is then infused with a dash of fruit essence, and is free from juice, sugar and anything artificial. It retails in a 16.9-fluid ounce paper based BPA and BPS free reusable and recyclable FSC certified bottle with plant based cap that produce up to 74% less carbon vs. similarly size plastic containers. The pack features the Certified B Corporation, Rainforest Alliance Certified, Facebook, Instagram and Twitter logos.

Just Water brand has released four certified organic, unsweetened flavors, which consist of organic apple cinnamon, organic tangerine, organic lemon as a part of their expanding portfolio. The goal is to have a positive environmental and community impact.

New water bottle products

From January 2015 to August 2019, Mintel identified 512 new bottled water products in the North American market (355 in the U.S and 157 in Canada).

Compared to flavored bottled water products (see section above), the use of alternative materials such as glass is generally not oriented or marketed in a recycling/ecological way, but rather in a logic of positioning/marketing the product as a premium "water product".

Aluminum has been used by major brands for featured plain bottled water products such as Perrier (Original Carbonated Mineral water), Dasani Sparkling (Cola-Cola), San Pellegrino (Sparkling natural mineral water), and other brands. However, it appears that other small competitors are slowly launching products with aluminum materials.

Sparkling Water

Company	Riptide Waters
Manufacturer	Riptide Waters
Brand	Rambler
Sub-category	Water
Location of manufacture	United States
Store name	H-E-B
Date published	August 2019
Launch type	New product
Price in local currency	US$3.47

Rambler Sparkling Water is Texas limestone filtered. The product contains no sodium, and retails in a pack containing six 12-fluid ounce cans. The manufacturer claims to proudly support the Texas Parks & Wildlife Foundation.

Still Natural Spring Water

Company	Llanllyr Water Company
Manufacturer	Llanllyr Water Company
Importer	Source Water
Brand	Llanllyr Source
Sub-category	Water
Market	United States
Store name	Whole Foods Market
Date published	February 2019
Launch type	New product
Price in local currency	US$3.49

Llanllyr Source Still Natural Spring Water is a spring water drawn from the organic fields of Llanllyr, Wales. The company claims to be committed to sustainability and the environment as they are a carbon neutral and ethical company. The product retails in a 25.4-fluid ounce recyclable pack.

Price segmentation

Challenge

Across both countries, packaged water still remained largely sold under what the consumer perceived as being a discount price.

Advice

There is still a threshold at which the average North American consumer is willing to pay for a bottle of water, regardless of the quality or origin of the water. Prices must correspond to those offered by competitors.

Annex

Definitions

Enhanced water

Sweetened and non-sweetened waters, carbonated and non-carbonated, enhanced with vitamin/minerals and/or other functional ingredients. May be carbonated or non-carbonated. May contain juice up to 14.9%

Includes: unflavored or flavored water brands with added functional ingredients - such as vitamins, minerals or nutraceuticaltype ingredients. Products using 'hydration' as a marketing platform, with added functional ingredients, but not having a packaged water provenance, for example Propel (PepsiCo), Mizone (Danone), Glaceau Vitaminwater (TCCC), Glaceau Smartwater (TCCC). Water will be the main product 'base'.

Flavored water

Typically there is a clear statement on the label or packaging highlighting that the product is made with spring or mineral water, for example Mineralwasser Plus, and it is marketed on this platform. The product will tend to be ositioned in, or next to, the packaged water section in retail outlets. Typically it will be perceived by consumers and industry as a packaged water, or a packaged water deivative. It will tend to be marketed on a health/wellness platform, as a 'lighter', lower calorie product.

Excludes: flavored waters with the addition of vitamins, minerals or nutraceutical type ingredients. These products are categorized as Enhanced Waters (see definition above).

Packaged water

All potable water including water without added mineral/vitamin enhancement, flavorings or sugar/sweeteners, sold in large containers of up to and including 10 litre.

Customized report service – Bottled water market in Canada and the United States
Global Analysis Report

Prepared by: François Thériault

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2020).

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