August 22, 2006
by Eric Schroeder
The flavored bottled water market accounted for only about 3% of the total single-serve water wholesale revenue generated in 2004. By the end of this decade, however, flavored water sales could approach $1 billion. Getting there is going to require new participants, new flavors, and, perhaps most importantly, new target audiences.
Forecasts from the Beverage Marketing Corp. (B.M.C.), a New York-based research and consulting service specializing in the global beverage industry, suggest flavored water could grow to more than $800 million in sales by 2009, on the high side of estimates, with medium-range forecasts in the ballpark of $600 million. Looking pessimistically, B.M.C. said the flavored water market could spike for a couple of years and then decline.
In contrast to some categories or trends that get their jump start from a new diet craze or rely on uniqueness to spur interest, the flavored water segment revolves around a beverage that has been around forever: water.
From tap water was spawned bottled water, and from bottled water has been birthed flavored and fortified bottled water. Still in its infancy, the flavored water category is showing signs of rapid growth. Strawberry, raspberry and lemon-lime, flavors that dominated the category in its early stages, have been joined by orange, black cherry and grape. But more interesting for the category, and perhaps a sign of what lies ahead if growth is to be sustained, has been the launch of flavored water products geared toward specific segments of the population.
Make room for mom
In June, Silver Spring, Md.-based Saphia Lifestyle Beverages debuted what it claims is the first beverage targeting the dietary needs of expectant and nursing mothers. The low-calorie, naturally flavored, nutrient-enriched water beverages, called Saphia Water, were developed specifically to respond to obstetricians’ recommendations that expectant, nursing and hopeful mothers drink the equivalent of at least eight, 8-oz glasses of water daily, and increase their intake of vitamins and minerals. The product’s tag line is "Saphia. Water for smart women expecting more."
Available in three flavors, Bliss-Berry, PacifyinglyPeach and LovinglyLemon, the new beverages are fortified with folic acid, calcium, dietary fiber, zinc, niacin, magnesium, selenium, vitamin B5, vitamin B6, vitamin B12, vitamin C, vitamin D, vitamin E, vitamin A, taurine electrolytes potassium and sodium. The water may be purchased in 24-bottle cases for $42.99 (shipping included) through the company’s web site, www.saphiawater.com .
Gretchen Cook-Anderson, who, along with Angela Patterson, a double board-certified neonatologist/perinatologist, founded Saphia Water, said the new water is a "product of personal experience." Ms. Cook-Anderson said a pregnancy with complications in 2001 forced her to abandon some of the flavored beverages she had been drinking and to heed her doctor’s advice to drink more water. Several years later, while on a business trip, Ms. Cook-Anderson noticed a group of pregnant women sitting around drinking different brands of water. This "moment of epiphany," she said, led her to wonder if there was bottled water made specifically for pregnant women.
In introducing Saphia Water, Ms. Cook-Anderson said the primary objective is to get women to drink more water, regardless of what brand, to help stave off dehydration. She said the company worked with beverage chemists, as well as obstetricians, lacticians and other medical personnel to develop a health first product.
"Our purpose is two-fold: Educating and highlighting the health issue; and developing a product to address those issues," she said.
Ms. Cook-Anderson said she views Saphia Water not only as a specialty beverage, but also as a dietary supplement. Currently, she said the product is being offered in obstetricians’ offices and hospitals, with plans to hit the retail market this fall. Ideally, the company hopes the product will be marketed in the baby aisle in supermarkets.
Saphia is not the only water geared specifically toward women, though. Double A Beverage, L.L.C., Boca Raton, Fla., last year introduced W2O, a vitamin enriched product the company says is a "uniquely designed water for women."
A 16-oz bottle of W2O contains 14 vitamins and minerals, including 100% of the recommended daily allowance of folic acid, 10% of the R.D.A. of iron and 10% of the R.D.A. of calcium.
The product is available in Tropical Samba, Cran-Apple Waltz and Orange Tango.
Another bottled water product geared toward women will hit store shelves in November under the Special K label, the largest global brand of The Kellogg Co., Battle Creek, Mich. The world’s largest cereal maker, Kellogg believes the new Special K2O Protein Waters may help consumers maintain shape-management programs. The product — along with Special K Protein Snack Bars and Special K Protein Meal Bars — is one of the first products to be introduced as part of Kellogg’s new Health and Wellness Division.
"As we spoke to consumers about their shape management needs, it was clear that waters — like snacks — play an important role throughout the day," said Jill Saletta, director of communications, Kellogg. "Because we’re focused on providing a variety of alternatives to help consumers meet shape management goals, water was a logical place for us to explore.
"New K2O Protein Waters, like the new Special K Protein Meal and Protein Snack Bars, are fortified with protein. So, K2O and the other new products are keeping with the Special K promise to help you to stay on track with your shape management goals."
Ms. Saletta said the new waters are targeted toward "weight-conscious women who are looking for simple and easy ways to manage their shapes."
Each 16-oz bottle of Special K2O Protein Water will have 50 calories and 5 grams of protein. The water will be available in three flavors: strawberry kiwi, lemon twist, and tropical blend.
Cool for kids
Seen as a refreshing drink, beverage manufacturers are doing their best to make water "cool" for children.
In June, Toronto-based Cott Corp. signed a deal with the Walt Disney Co. under which the former would market a line of Disney-branded beverages, including Finding Nemo purified drinking water and The Incredibles fortified flavored water.
The Incredibles water contains five added vitamins and is packaged in a child-size 8-oz bottle.
"Mom’s are looking for ‘better for you’ solutions in food and beverages to address concerns about their children’s health," said Steve LeVeau, director of marketing and category management, Cott. "Many mom’s have started serving their children plain water, but kids still prefer fun, interactive products that deliver great taste. That’s why Cott beverages partnered with the Disney Co. to create Disney-Pixar branded The Incredibles flavored water. The Incredibles flavored water has all the goodness of plain water but is naturally flavored and fortified with five vitamins. That way mom’s can feel good about what they serve their children while kids love the characters and the great taste."
Mr. LeVeau added that plenty of opportunity exists to make children a viable market for flavored water products.
"Currently, there is a small presence of flavored waters that have the right package size and properties that appeal to kids, but the segment is showing strong growth," he said. "We conducted research with kids and received rave reviews on our flavored water products. We are confident that our great tasting flavored water, in the right package, at the right price, with the powerful Disney equity will be a huge success with mom’s and kids."
Then in July, San Francisco-based Maddie’s Beverage Co. launched two new flavored beverages to its Wateroos line of all-natural children’s water-filled drink boxes: all-natural berry flavored and all-natural grape flavored waters.
According to Maddie’s, Wateroos is the only children’s water beverage packaged in drink boxes complete with straw. In addition, each box features a different water-loving character with educational games and puzzles on the back of each box.
"They’re easier than a bottle for small hands to hold and sip, and are a convenient and portable way for busy families to bring water on the go," the company said. "Best of all, the colorful and playful drink boxes make Wateroos fun for kids so they are more likely to ask for it again and again."
Wateroos contain no sugar, calories or artificial ingredients or sweeteners. They are packaged in six packs of 8-oz boxes with a suggested retail price of $3.29.
The Coca-Cola Co., Atlanta, is no stranger when it comes to the bottled water market. In 1999, Coca-Cola introduced Dasani, eventually adding several flavors to the line last year, including lemon, grape, raspberry and strawberry. In March, Coca-Cola launched Dasani Sensations, a flavored water beverage sweetened with Splenda brand sweetener, mixed with natural fruit flavors and absent of calories. Dasani is the second largest bottled water brand, trailing only Aquafina, which is manufactured by PepsiCo, Inc.
Continuing its innovation, Coca-Cola last month launched Minute Maid Fruit Falls, a five calorie flavored water beverage for children. The beverage, which is available in Berry and Tropical flavors, comes in a transparent front pouch and contains pure filtered water, a splash of real fruit juice, 100% of the R.D.A. of vitamin C and a good source of calcium.
"We know parents are always seeking beverages for kids that are healthful and refreshing, as well as more convenient and fun," said Bill Kelly, vice-president of juices and emerging brands, Coca-Cola North America. "Minute Maid Fruit Falls answers this need with a fun, flavorful water beverage that kids like and parents appreciate."