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    Blog

    What’s Next in Health & Wellness Bottled Water?

    Fortified products have been a bright spot for sluggish bottled water sales overall.

    What’s Next in Health & Wellness Bottled Water?
    Pure and natural positioning helps attract consumers.
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    Simone Baroke, Contributing Analyst, Euromonitor International08.17.15
    Adding value to bottled water is tricky, and highly developed, saturated markets pose a particular challenge for manufacturers. In this article, Euromonitor International highlights opportunities generated by three very distinct trends, which could well spark off a spate of new product development. The first explores the relatively small-but-constant demand for premium "super pure" waters, while the second looks at opportunities generated by fat-based ingredients as a result of the rising trend for high performance waters. Lastly, the emerging category of juice-water hybrid products is considered.

    Fortified/Functional Water More Dynamic Than Naturally Healthy
    Health and wellness-positioned bottled water is delivering a rather sluggish performance in North America and Western Europe. Based on fixed 2014 U.S. dollar exchange rates and constant prices, value sales of naturally healthy water (comprising spring and natural mineral water) remained static in North America over the 2009-2014 review period, while in Western Europe, they declined by 5%.

    Fortified/functional water, on the other hand, did somewhat better over the same period. In Western Europe, values leapt by 50% from $308 million in 2009 to $464 million in 2014. In North America, sales reached $2.5 billion in 2014, but registered a far more modest review period increase of 6%.

    Purity Above All
    Many health and wellness-oriented consumers are attracted to the concept of the water they put into their bodies being "pure" and "natural." Some are suspicious of table water, which they consider to be chemically treated tap water. Hence, products like Fiji (Fiji Water Company LLC), which has the tagline "bottled at the source, untouched by man," goes down very well with this consumer group. Deep sea water, which found particular resonance in Japan a few years ago, is another example of a type of bottled water which is marketed on the basis of being extracted in a remote location far from any polluting human activity.

    The next candidate lining up to join the ranks of "super pure" waters is water made directly from clouds. Spanish company Agua de Niebla de Canarias offers such a product, and is set on international expansion. Its "water farms," located on the Canary Islands, sport mist collectors, each of which is able to extract 100 liters of water a day from the moisture-laden air. The result is bottled Alisios Agua De Niebla (Alisios Mist Water), pure "cloud juice" unsullied by contact with the soil. There are countless sparsely inhabited locations across the globe where this type of water extraction is technically possible, including areas covered by rainforest. A lack of infrastructure may pose a challenge, and this remains for the industry to resolve.

    Fat & Water Do Mix
    Purity may be the most desirable property for some, while for others, it is functionality. Fortified/functional water, as a concept, is no longer terribly new, as there is a vast array of products out there boasting vitamins, minerals, antioxidants, amino acids, etc. The addition of fatty acid ingredients, however, remains largely unchartered territory in clear soft drinks, and in bottled water in particular. But this may be about to change.

    In July 2015, Bulletproof Digital Inc launched FATwater, a functional water, which, besides B-vitamins, turmeric and other more usual functional ingredients, also contains medium-chain triglycerides (MCTs), a type of fat found in coconut oil. MCTs have been linked with improved cognitive functioning. David Asprey, CEO of the aforementioned company, came up with the high performance-geared Bulletproof diet, in which fats take center stage.

    Asprey is the inventor of Bulletproof Coffee, available in packaged format with the tagline "power mind and body." The product is enriched not just with MCTs, but also with butter. A foray into soft drinks was the next logical step, and FATwater is the result.

    According to Asprey, his added-fat beverages boost energy, promote weight loss and "upgrade" the brain. FATwater is marketed as a tool for "extreme hydration," because, according to its creator, the addition of the fat component allows the body to soak up the water more quickly, and the liquid also "tastes wetter" than standard bottled water.

    Fortified/functional water with added fats could well garner great appeal among consumers who want to increase their performance, both in the sports and cognitive performance realms, and it may also gain traction with people on a weight loss diet. Such products tap into the Diet Hacking trend.

    Vegetable Water: An Ingenious Attempt at Hybridization
    In May 2015, Campbell Soup Co gave birth to a whole new incarnation of its iconic V8 vegetable juice with the launch of V8 Infused Water, containing 25% juice, and promoted as providing one full serving of vegetables per 16-ozz (473 ml) bottle. The product comes in three varieties: Cucumber Lime; Black Cherry Pomegranate; and Mandarin Orange Ginger. The company stated the vegetable serving is derived from cucumber and sweet potato.

    It is no secret that juice sales have been contracting across Western Europe and North America, and that companies are looking for ways to stem the decline. Fruit flavored drinks devoid of juice content have suffered most, but, based on fixed 2014 exchange rates and constant prices, retail value sales of both nectars (25-99% juice) and juice drinks (up to 24% juice) fell by an appreciable 12% in North America over the review period, and their performances in Western Europe present a similarly disconcerting picture.

    Technically, V8 Infused Water might be classified as a nectar, but it is clearly positioned as a water and it certainly looks like a water, albeit with a slight hue matching each of the three flavors. Arguably, this move by Campbell, which blurs the boundaries between water and juice, presents a rather brave attempt in terms of product positioning. Both fellow juice and water manufacturers will be observing the product's performance to see if this is a viable route for them to take or whether consumers find a water-juice hybrid product a step too far.

    For further insight contact Ewa Hudson, Global Head of Health and Wellness Research at Euromonitor International, at ewa.hudson@euromonitor.com.
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