It's fair to say that the bottled water industry has had a rough ride of late. Last year's wet and chilly summer meant sales tumbled by 3% to £463m (Britvic Soft Drinks Report 2008) as British consumers had their fill of water thanks to regular flooding and record levels
Like many other soft drinks categories, bottled water has also had to square up to a deluge of regulatory challenges in the past few months. As health and wellbeing rose up the government's agenda, many companies - particularly those which produce flavoured water products - were prompted to alter their product portfolios by reducing sugar levels and removing additives where possible.
And just when it looked like it couldn't get much tougher, the bottled water industry took a further hit in mid-February when it came under fire from the green lobby. The attack, which generated pages of negative media coverage, centred on the quality, cost and environmental impact of bottled water compared with ordinary tap water.
Even Britain's environment minister Phil Woolas entered the fray, branding bottles as "daft" and "morally unacceptable", although his claims were made to look a little daft themselves after Private Eye found that his own department had installed special water filters at a cost of more than £2,000 a tap.
Private label water brands were hit particularly hard in 2007 with sales down 7% to £118m.
However, despite the recent storm clouds, the industry is determined not to let the past 12 months dampen its spirits and is looking forward to a brighter future. For a start, there is still significant room for growth, with the per capita consumption of bottled water in the UK still lagging significantly behind other European countries.
While it's still too early to predict what the summer of 2008 will have in store for the industry, the Met Office expects what's left of spring to be good, with mean temperatures likely to be above average in the UK until June. In terms of immediate consumption, if the temperature rises from 14°c to 25°c, retailers can expect a 75% increase in bottled water sales.
Health concerns are also likely to give the category a much-needed boost this year, and a recent study by AC Nielsen Homescan revealed that 69% of adults identified "drinking more water" as a key factor in improving their diet.
The link between sport and hydration is also expected to fuel a growth in sales. And as the warmer months approach and the athletics season gets under way, many water brands are now revealing sponsorship deals with major sporting events.
Highland Spring set the ball rolling in March when it was named as official water supplier to fund-raising event Sport Relief 2008. The company supplied more than 200,000 bottles of water to the main event - a one mile run for charity. Highland Spring is also drinks sponsor to British tennis hopefuls Andy Murray and brother Jamie, last year's mixed doubles champions at Wimbledon, and is a sponsor of the GB Davis Cup team for 2008.
Danone Waters, meanwhile, has announced that Evian is to be the Official Bottled Water of The Wimbledon Tennis Championships for the next five years. The new partnership will see Evian provide the players, officials and spectators with water throughout the Championships, while Nestlé Waters has recently announced that Vittel will replace Nestlé Aquarel as one of the official waters of the Tour de France. This is not the first time that the paths of the Tour de France and Vittel have crossed. The bottled water brand from the Vosges region of France was offered to spectators of the Tour de France in the 1960s and the Tour set off from the famous spa in Vosges in 1968.
Another brand pushing the link between hydration and sport this summer is Aqua-Pura, which has an exclusive three-year sponsorship deal with UK Athletics. The brand will be supporting UK Athletics' Women in Athletics initiative, which encourages women and girls to get involved with grass-roots athletics.
Aqua-Pura marketing director David Patmore says: "By extending our sponsorship with UK Athletics we can build on Aqua-Pura's existing association with sport and fitness and make sure that the brand is ideally placed to meet growing demand for healthier food and drink products."
With the Beijing Olympics fast approaching, many bottled water brands are hoping for a surge in sales as consumers are inspired to get physical. The
Games are being held from August 8 to August 24.
The consumer trend towards more natural traceable products is also likely to benefit the water category this year. "A key feature of the current consumer landscape is the theme of naturalness," says Daniel Hibbs, consumer insight manager of The Nielsen Company. "This barely existed as a front-of-mind concept five years ago. Although natural products were around, there was a greater preoccupation with using sweeteners, preservatives and processing to meet demands for low fat, low sugar and greater convenience. Now we're returning to the way things used to be and one thing is clear - manufacturers that make naturalness more accessible will prosper."
And you can't get more natural than plain water straight from the spring, can you?
Ethical and environmental issues such as recycling and carbon footprints will also be a major factor driving consumer purchasing decisions. Britvic marketing director Simon Stewart says: "Although the organic and Fairtrade sectors are still a small part of the market, their growth in grocery demonstrates consumers' increasing sensitivity to environmental concerns."
The goalposts are moving fast. In March 2007, 48% of British shoppers claimed they actively try to buy local products. Four months later the figure had risen to 57%. The good news for manufacturers and retailers is that 46% of shoppers claim to be prepared to pay extra for products that are kinder to the environment.
That's hopeful for brands such as Icelandic Glacial - the first imported bottled water to attain full 'Product' and 'Operational' Carbon Neutral certification. The product is produced using only natural green energy sources of hydroelectric and geothermal power, and is committed to a programme of reduction of its carbon emissions.
Many bottled water companies have been shouting loudly about their environmental and sustainable credentials of late. Highland Spring's latest TV commercial was filmed on its organic land in Pershshire and communicates how, by protecting the land, Highland Spring can deliver water as pure as nature intended. The company was also the first bottled water producer to join EMAS - the voluntary eco-management and audit scheme.
Waterbrands, the company behind Harrogate Spa Water and Thirsty Planet, has also been showing its environmental cards.
Harrogate Spa Water has recently been repackaged in lighter PET bottles, cutting the brand's carbon footprint and slashing distribution costs. Waterbrands also sources all of its raw materials from within 60 miles of its bottling plant in Harrogate.
"These measures show that we're serious about green issues, and it is evident from our success that consumers recognise this," says managing director Paul Martin.
And Danone Waters has been doing its bit, too. The company behind Evian and Volvic has been making the maximum possible use of electric rail routes in France and increased the proportion of miles its products travel by train from 59% to 70% of the total distance. This has been a major component of significant reductions in the carbon footprints of its Evian and Volvic brands. Over the past 15 years Danone has also achieved a 30% reduction in the weight of its PET bottles, and in the past three years alone the average weight of Evian and Volvic bottles reduced by 11%.
Danone Waters grocery customer marketing controller Steve Flanagan says: "Sustainable development has been at the core of the Danone Group business philosophy for more than 30 years. From early 2008 we are phasing in Evian and Volvic bottles manufactured from recycled PET."
However, he adds that the industry is still restricted by the availability of recycled PET given that the UK had one of the lowest consumer recycling rates in Europe.
Another brand keen to promote its earth friendly credentials is Silver Spring, maker of flavoured water brand Perfectly Clear. The company manufactures its own packaging, creating the caps and pre-forms on site from polyurethane granules. Research and development, production, bottling, labelling, warehousing and support services are all kept in-house, making for a smaller than average carbon footprint. Silver Spring has also embarked on a major environmental programme that will see it move towards recycled plastics in its bottles and removing PVC from its bottle labels. This follows a major recycling programme launched in 2007 in which the company pledged to recycle 100% of its own factory gate waste.
Danone's Flanagan says that communicating these environmental messages, and the fact that mineral and spring waters undergo no chemical treatment by law, will be key areas for the industry over the next 12 months. "These are important messages for us to get across, both to restore category momentum, but also to counter the emotive environmental arguments about our industry that circulate in the media from time to time."
Claridge's, the deluxe five-star hotel and restaurant in London, launched a premium bottled water list last month, with prices stretching to as much as £50 a litre.
Claridge's food & beverage director Renaud Grégoire says that in many ways water is becoming like wine, with guests looking for a particular brand to complement their food and suit their mood. Here's some of the waters on offer:
Price per litre: £50
Source: Tai Tapu volcano, New Zealand
Smooth on the palate
Price per litre: £30
Source: Newfoundland, Canada
Pure taste of Canadian icebergs
MaHaLo Deep Sea Water
Price per litre: £28
Source: Kailua-Kona, Hawaii
Rare deep-sea water, collected through a
Just Born Spring Drops
Price per litre: £21
Source: Nilgiris Mountains, India
Suitable for sensitive digestions
Price per litre: £20.83
Source: Shuzenji, Japan
Its sweet taste makes it the perfect accompaniment to sushi
Price per litre: £16
Ideal with fine foods and rich French cuisine