Bottled water, Zenith
Bottled water’s share in the overall beverage category increased three percentage points over a five-year period.

BATH, UNITED KINGDOM — Bottled water’s share in the overall beverage category increased three percentage points over a five-year period due to small-pack sales and consumption in Asia, according to a Zenith webinar on Sept. 6. Bottled water’s share of global beverage sales was 19% in 2016, up from 16% in 2011. Only tea, at 21% in 2016 and 22% in 2011, ranked higher than bottled water.

Matt Wilton, Zenith
Matt Wilton, commercial director for Zenith

“There is still a lot of headroom for growth,” said Matt Wilton, commercial director for Bath-based Zenith, formerly known as Zenith International.  “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.”

Bottled water volume increased by an additional 114 billion liters from 2011 to 2016, leading second-place tea, an additional 52 billion liters, and third-place milk, an additional 22 billion liters.

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

Bottled water chart, Zenith

“When we drill down to look at individual country sources of growth, where does it come from?” Mr. Wilton said. “Well, yes, no great surprise, China has been incredibly strong.”

Volume increased by an additional 35 billion liters in China over the five-year period. The United States and India were second with an additional 12 billion liters each. The United States was the only country among the top 10 by volume growth that could be described as a developed and mature country, Mr. Wilton said.

The global all-water market experienced a 6.8% compound annual growth rate in volume, rising to 398 billion liters in 2016 from 207 billion liters in 2006. Sales experienced a 5.9% CAGR, increasing to $177 billion from $99 billion.

Global small-pack water sales came close to doubling over a 10-year period as they were nearing 240 billion liters in 2016, up from a little over 120 billion liters in 2006. Small-pack water sales eventually may overtake carbonated soft drink sales. Carbonate sales were a little over 240 billion liters in 2016.

Bottled water chart, Zenith

“Some time ago water as a total category overtook carbonates in terms of volume importance, but what’s quite interesting this year has been a shift within small-pack water,” Mr. Wilton said. “There’s still a gap, but we see that the small-pack water really now is closing the gap on carbonated soft drinks. If that trend continues, we would expect a convergence point over the next few years.”

Health and convenience are driving sales of small pack, defined as anything under 10 liters, he said. The majority of small packs are under 2 liters. Sales of bulk water, anything 10 liters or over, are rising, too, surpassing 150 billion liters globally in 2016 from under 100 billion liters in 2006.

The global growth of the all-water market should continue, Mr. Wilton said.

“The growth rate is quite well-established, consistently in that 5% to 7% mark,” he said.

Bottled water chart, Zenith

In a question-and-answer session, the issue of sustainability and PET (polyethylene terephthalate) bottles was raised.

“I think sustainability is the wild card for bottled water, not because it’s unsustainable but because consumers may question perceptions of it,” said Richard Hall, chairman of Zenith.

He said recycling programs and government programs could address the perception issue.

“I think that we can provide the answers,” he said of the beverage industry. “Water is actually the most locally distributed product of all beverages in most cases, and it has no ingredients, so it has a very low carbon footprint.”

Zenith will hold its 14th annual Global Bottled Water Congress on Oct. 23-25 in Barcelona, Spain.