Slideshow: Tiny bubbles, big splash

by Monica Watrous
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LONDON — Fizzy water is gaining favor among American consumers. Consumption of carbonated packaged water in the United States is projected to increase 12% this year, compared with the average global growth of 1%, according to a report from market research firm Canadean.

The rise in demand may signal a shift from carbonated soft drinks to packaged water. Consumers are drinking less soda to avoid added sugars or artificial sweeteners but still crave the mouthfeel of sparkling beverages.

“Carbonated packaged water fills this void and appeals to consumers as a healthier alternative to traditional carbonates,” said Rakhee Sturgess, analyst at Canadean. “As it is sugar-free and has no additives, the growing demand for carbonated water has started taking share from the carbonated soft drinks market.”

Flavored varieties are rising on solid distribution gains and more marketplace activity. Beverage makers seeking to recapture lost soft drink sales are introducing new carbonated waters to the market. The Coca-Cola Co., Atlanta, this year expanded its Dasani brand with a line of zero-calorie carbonated water beverages. In lime, lemon, berry and apple varieties, Dasani Sparkling is unsweetened, lightly carbonated and infused with natural flavors. Also this year, Dr Pepper Snapple Group, Plano, Texas, added a peach mango flavor to its Canada Dry sparkling seltzer waters, which also include and is expanding the line into new markets, as well as launching a line of Schweppes sparkling waters nationwide in such flavors as raspberry, black cherry, lemon lime and orange.

“We have been and will continue to launch new innovation that offers consumers options to help them lead balanced lifestyles,” said Larry Young, president and chief executive officer, during a Feb. 12 earnings call with analysts.

Jones Soda Co., Seattle, recently entered the category with a new line of flavored sparkling waters in berry lemonade, berry, green apple, and strawberry lime varieties. The products contain no added sweeteners, colors or artificial preservatives. The company said it created Jones Sparkling Water “in response to increased consumer demand for healthier products.”

LaCroix, a business unit of National Beverage Corp., this summer added apricot, mango and passionfruit varieties to its lineup of zero-calorie sparkling waters. The company positions the products as sugar-free mixers for cocktails and mocktails.

Leading the market of carbonated packaged water in the United States is Crystal Geyser by Otsuka Group, which ranks as the 12th most consumed brand in the category globally and offers original, lime, lemon, berry and orange flavors.

Other top players include Nestle’s Poland Spring, Perrier and San Pellegrino.

“Carbonated packaged water is gaining traction in the U.S., and its continued success will grow its share of the packaged water market,” Ms. Sturgess said. “Since local manufacturers are offering lower prices, it is domestic rather than imported brands that are increasingly expected to drive this growth. Furthermore, wider distribution will also help U.S. manufacturers to capitalize on the growing demand for carbonated packaged water.”
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