State of the industry: Beverages

by Jeff Gelski
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Bottled water
Bottled water may be leading the charge in market share in the overall beverage category.
 

KANSAS CITY — Alternatives to carbonated soft drinks, such as bottled water, energy drinks and ready-to-drink tea, continue to grow in sales and take up market share in the overall beverage category. Bottled water may be leading the charge.

“Bottled water effectively reshaped the beverage marketplace,” said Michael C. Bellas, chairman and chief executive officer of the Beverage Marketing Corp. “When Perrier first entered the country in the 1970s, few would have predicted the heights to which bottled water would eventually climb. Where once it would have been unimaginable to see Americans walking down the street carrying plastic bottles of water, or driving around with them in their cars’ cup holders, now that’s the norm.”

Bottled water volume in the United States grew to 12.8 billion gallons in 2016 from 11.8 billion gallons in 2015, nearly a 9% increase, according to the Beverage Marketing Corp., New York. Per capita consumption of bottled water exceeded 39 gallons in 2016, which compared to 38.5 gallons for carbonated soft drinks.

Bottled water brands chart
 

“Around the turn of the century, per capita soft drink consumption regularly exceeded 50 gallons, and Beverage Marketing expects bottled water to reach that level by the middle of the next decade,” the B.M.C. said.

A 2017 success story came in PepsiCo, Inc.’s launch of Lifewtr.

“In just five months of sales since its launch in Q1, Lifewtr has already reached $70 million in retail sales across measured channels, was the top brand contributing to L.R.B. (liquid refreshment beverages) retail sales growth in the second quarter and is on track to generate approximately $200 million in retail sales on an annualized basis,” said Indra K. Nooyi, chairman and c.e.o. of PepsiCo, Inc., Purchase, N.Y., in a July 11 earnings call.

 

Globally, bottled water’s share in the overall beverage category increased to 19% in 2016 from 16% in 2011, according to Zenith, based in Bath, United Kingdom. Bottled water trailed only tea, which held a 21% beverage share in 2016 and 22% in 2011. Carbonates were at 12% in 2016 and 13% in 2011.

“There is still a lot of headroom for growth,” said Matt Wilton, commercial director for Zenith, in a Sept. 6 webinar. “Bottled water is still under 20% of the overall beverage landscape, (It is) a very dynamic sector but still a lot of headroom for share growth.”

Geographically, sales in Asia made up 41% of total global bottled water sales in 2016, which was up from 34% in 2011.

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