Water Means Business

Dec 5, 2016

Inspired by the latest announcement from PepsiCo to launch the premium bottled water brand, LIFE WTR, and having seen the bottled water category introduce so many novelties over the last years, we decided to explore the aqua world.

The main finding: get ready to see a lot more bottled water around you... at the supermarket, in restaurants, online... and each boasting different designs, colors, purpose and packaging innovations. The bottled water category is clearly one that major brands (like PepsiCo & Coca Cola) are investing in. There’s a reason.

Studies unanimously point to the fact that the sales volume of carbonated drinks is on the decline, while bottled water sales volume is on the rise. Of course, bottled water is taking some of the share of carbonated drinks due to people looking to adopt a healthier lifestyle in general. And yes, much of the growth is expected from emerging markets such as China, India and Mexico.

What does the bottled water category include? Plain water (mineral, spring or purified water), flavoured water and functional water. For those who are uncertain as to what functional water is (like we were when we began writing this article), functional water is water that has additives that provide nutritional value (such as herbs, vitamins, fruit extract, etc.).

How can such a basic beverage staple become such a huge category maker?

When you strip it down, it all comes down to pretty simple marketing & communication principles:

1. Being in tune with changing market trends

Large beverage giants or bottled water companies saw that there is a shift in people’s lifestyles. With health information becoming rampant across all media channels (especially social media), the aspiration became to lead a healthier life and that usually starts with diet and exercise. This includes (for many), replacing carbonated drinks with water. So bottled water brands increased their exposure and in turn, increased their sales.

2. Keeping an eye on emerging target audiences (i.e. kids)

With obesity becoming one of the leading concerns for parents, bottled water had a great opening. After all, it’s way better than any carbonated or sugary drink, so this was a chance for producers to increase market share by catering to this impressionable audience. Sure, parents are doing the purchasing, but the more appeal the brand has on kids, the more likely the parents are to buy it. Enter fun designs, holiday activations (like Nestlé Pure Life’s Halloween bottles) and new bottle sizes.

3. Innovating on a regular basis

Even with market trends and target audiences on your side, if you don’t innovate regularly, you might lose your edge and leave room for another player to come in and take all the limelight. So, innovations are important, whether they are anchored in positioning (organic, premium, etc.), in packaging (size, shape, caps, closures, etc.) or simply in design activations (including limited edition bottles).

The rise of the bottled water category serves as an excellent market lesson to anyone who is in a position of market leadership to not get cocky and keep their eye open for introducing changes, taking on new opportunities or simply tweaking products.