More than just water

by Allison Sebolt
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Value-added has become a key trend within the bottled water market. Increasingly, bottled water makers are introducing functional products enhanced with various vitamins and minerals.

According to the Beverage Marketing Corp., New York, value-added water, which includes enhanced and flavored waters, represented nearly 10% of the total single-serve water market in 2007.

"It’s a greater demand for healthier refreshment, which is not a new development," said Gary Hemphill, senior vice-president of information services with the B.M.C. "I think it’s a continuation of trends we’ve seen in the marketplace. People are looking for healthier refreshment beverage alternatives, and in a lot of instances for consumers, enhanced waters fit the bill."

Mintel International, Chicago, said enhanced water is likely dampening sales of fruit and sports drinks, which consumers traditionally have turned to for hydration and vitamins and minerals.

Mr. Hemphill said some enhanced water products are positioned for specific functional benefits while others cater to general wellness, so there is a broad range of vitamins, minerals and ingredients being added to water.

He added that many functional waters are positioned with a general wellness perspective, so there aren’t necessarily any specific promises made other than being general better-for-you products. He said if specific functional benefits are mentioned, consumers expect those promises to be delivered.

Mr. Hemphill said there has been a bit of a slowdown in the category so far this year due to the current economic conditions as these are products usually priced at a premium. But he said it’s a category well-positioned for what today’s consumer wants, so he expects it to continue to grow.

According to Mintel, while Nestle, Vevey, Switzerland, is still the leader in the bottled water segment, The Coca-Cola Co., Atlanta, is closing the gap with its Dasani brand and its acquisition of Glaceau VitaminWater in May 2007. Specifically, Glaceau VitaminWater gained 5% share in segment sales from 2007-08.

Mintel also said bottled water leader Nestle is more committed to plain and flavored waters with eco-friendly bottles than vitamin-enhanced waters.

According to the B.M.C., the top brands by volume for enhanced water are Glaceau, Propel, SoBe LifeWater, Aquafina Alive, Dasani Plus, Veryfine Fruit20, Penta and Trinity.

PepsiCo, Purchase, N.Y., introduced Aquafina Alive in January 2007, and according to Mintel a differentiating factor about this product is it is made with a "splash of fruit juice." After the introduction was made, sales increased by $11 million, which represented a third of PepsiCo’s sales growth in the bottled water segment. Additionally, in March 2008, PepsiCo reformulated Aquafina Alive to contain more enhancing ingredients.

One of the newest enhanced waters to hit the market is from Alacer Corp., Foothill Ranch, Calif. The company has launched Emergen-C Health & Energy Water, which is supplemented with 1,000 mg of vitamin C and seven mineral complexes to support good health along with B vitamins for natural energy.

"We promise consumers a fast, fun way to boost health and energy with every Emergen-C branded product," said Ron Fugate, chief executive officer of Alacer.

Even private label brands have introduced enhanced bottled water products. Kirkland Signature (a Costco brand) has Vita Rain Vitamin Enhanced Water Beverage with electrolytes and B vitamins. Trader Joe’s also recently introduced electrolyte enhanced water.

According to the Mintel’s Global New Products Database, there have been 33 water products with a functional claim on packaging introduced so far this year through Aug. 5, up from 29 in 2007 and 7 in 2006.

Sales for the entire bottled water segment in channels excluding Wal-Mart Stores, Inc. were $5,290,832,042, up 4% from the previous year, according to The Nielsen Co., New York.

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