Bottled water sales are a drop in the ocean compared with what they could be in the future, says Rich Airey

More than 26 million adults, or 55% of the adult population in the UK, now drink bottled water. Just over a decade ago, in 1995, the equivalent stood at 16 million. And industry experts predict there's still plenty room for further growth.
For proof, just look at the amount of bottled water being consumed across Europe and the US. While UK adults each consume an average of just 36 litres of bottled water per year, Italians and Americans gulp down 181 and 94 litres respectively. (Source: Zenith).
Bottled water now represents a 15% share of the total soft drinks market and has enjoyed close to double-digit growth at 9% this year, compared with 5% growth in 2005. Add in flavoured water, which has a 3% share of the market, and it's clear retailers shouldn't ignore this category (Source: AC Nielsen).
The buoyant year is in part down to a good summer, but there's also the link to healthier living to thank.
Graham Burgess is category manager at Danone Waters UK, which owns the top two brands in c-stores, Volvic and Evian. He believes the category has a bright future: "The growth we're seeing is very much connected to the increased interest in healthier living. In order to take a fair share of the category, convenience retailers have to make sure water is merchandised correctly. Like all drink-now soft drinks, the smaller bottles should always be sold chilled. The 1.5 litre bottles also sell well from the chiller."
Volvic's Touch of Fruit flavoured range continued to be a popular choice in 2006, while Evian's launches included a fridge pack and 33cl bottle.
Burgess adds that retailers must remember demand for water exists throughout the year and not just the summer. He adds: "There's no getting away from the fact that water is always going to be highly seasonal, but there's evidence to suggest the market is starting to become slightly less seasonal. As well as sales often rocketing in hot weather, there's also an increase just after Christmas as people start their health kicks for the new year."
Danone launches its Evian Detox campaign in January. It will be the brand's biggest promotional spend of the year and bottles will be available in shelf-ready packaging to help drive New Year sales.
David Patmore, marketing director for Princes soft drinks - which produces the Aqua Pura brand - agrees that health has been a key driving force for the category. He says: "Bottled water's naturally healthy positioning has made it ideally placed to capitalise on concerns over public health."
When it comes to seasonal sales, Patmore believes the number one issue for independent retailers is to manage availability. He adds: "During hot weather soft drink sales can increase by up to 50% and bottled water is always the first drink to fly off the shelves when the weather hots up. Retailers need to meet this increased demand but with storage space often tight, clever stock management is essential. Simple things like keeping an eye on the long-term weather forecast can help retailers choose when to ramp up stock."
The third best-seller in the c-store sector, with an 11.5% share, and a top performer in kids' waters is Highland Spring.
Marketing director Sally Stanley believes that while the percentage of adults consuming bottled water may start to level off, the key challenge for manu-facturers and retailers is to get current shoppers to consume more.
And there's also plenty of room for growth in the children's market, according to Stanley. Kids currently drink only 12 million litres of water each year out of a total of more than two billion litres.
She says: "We kick-started the kids' water category in 2001 and the sector has massive potential and is experiencing huge year-on-year growth. There's the whole Jamie Oliver effect taking place and bottled water is one of drinks children are allowed to take into school. Having said this, the kids' category makes up only 0.5% of the overall market so there is a massive opportunity in the coming years."
Stanley adds that there are still parts of the bottled water market which remain untapped. Although exact details have not yet been released, Stanley says the company has identified new target audiences for whom possibly two brands could be released in 2007.
The positive outlook continues at Nestlé Waters, whose brands include Vittel, Buxton and Perrier. Chief executive Stefano Agostini says: "In the coming years, UK consumers will acknowledge more and more the importance of healthy hydration. Mineral water will be the best answer to this need for people of every age, in every moment of the day. Different mineralisations, pack sizes and more availability will reinforce bottled waters as the best choice to quench thirst."
The fact that major soft drinks manufacturers have introduced new products in the past 18 months, for example, Britvic's launch of Drench, highlights the interest in the category. Coca-Cola is also rumoured to be gearing up to launch a bottled water in the UK, but opinions on its chances of success vary after the bad publicity the drinks giant received surrounding its pulling of the Dasani brand from shelves in 2004.
Britvic category director Andrew Marsden adds: "There's unquestionably room for growth. Bottled water has great appeal to a wide range of ages: Drench was launched specifically for young adults on the go; other products such as sparkling water appeal to older shoppers; and our Robinsons Fruit Shoot H20 is still popular with younger children. Bottled water is now consumed by a huge number of consumers 365 days a year."
So now's the time to think about expanding your water fixtures to make sure your shelves reflect the category's top-selling products.

Soft drink sellers (volume)


Carbonates 43%
Unflavoured water 15%
Fruit juice 15%
Squash & cordials 8%
Fruit drinks 8%
Flavoured water 3%
Mixers 3%
Source: AC Nielsen take home April 2006

C-store brand shares


Volvic 28.9%
Evian 24.2%
Highland Spring 11.5%
Vittel 7.2%
Buxton 2.1%
Brecon Carreg 1.6%
Source AC Nielsen April 2006