BOTTLED WATER SHOWS STRENGTH YET

With another year of forceful growth in 2012, bottled water further solidified its already prominent position in the U.S. beverage marketplace. Growing by 6.2%, bottled water reached an historical high of almost 9.7 billion gallons in 2012. Per capita consumption also reached a new peak of nearly 31 gallons. Growth in 2012 was the strongest it had been in five years. Moreover, preliminary estimates indicate that the category could cross another noteworthy threshold by exceeding 10 billion gallons for the first time in 2013.

 
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BOTTLED WATER SHOWS STRENGTH YET AGAIN, NEW REPORT FROM BEVERAGE MARKETING CORPORATION SHOWS

Volume climbs to a new high


With another year of forceful growth in 2012, bottled water further solidified its already prominent position in the U.S. beverage marketplace. Growing by 6.2%, bottled water reached an historical high of almost 9.7 billion gallons in 2012. Per capita consumption also reached a new peak of nearly 31 gallons. Growth in 2012 was the strongest it had been in five years. Moreover, preliminary estimates indicate that the category could cross another noteworthy threshold by exceeding 10 billion gallons for the first time in 2013.

Prior to the economic challenges of the late 2000s, bottled water experienced an exceptional streak of speedy volume growth, as documented in the latest edition of Bottled Water in the U.S., Beverage Marketing Corporation’s annual analysis of the market. Yet like many other beverage categories in the United States during the depths of the economic recession, bottled water suffered reversals in 2008 and 2009. In 2010, bottled water volume returned to growth. The category showed renewed vitality in 2011, and growth accelerated in 2012.


Domestic non-sparkling water perennially reigns as the biggest segment of the U.S. packaged water industry. Domestic non-sparkling water’s 9.3 billion gallons represented 96% of total volume in 2012.

The non-sparkling category includes various components that typically follow divergent trajectories. In 2012, for the second year in a row, all four segments registered growth. Although each advanced at very different rates, every one of them grew faster than they had in the previous year. Throughout most of the 1990s and 2000s, the retail premium segment – consisting of still water in single-serve polyethylene terephthalate (PET) bottles – drove the overall category’s development. Indeed, the PET component enlarged by a double-digit percentage rate 16 consecutive times through 2007. In 2012, the segment saw its showing strongest since 2007, increasing by more than 8% to 6.3 billion gallons, which represented 65% of the overall market.


Retail bulk volume experienced some setbacks as more and more consumers selected convenient PET multipacks in large format retail channels instead of larger (1 to 2.5 gallon) sizes. Its share eroded from nearly one-quarter of the category volume at the beginning of the century to slightly more than 10% by 2012, largely as a result of competition from PET. Retail bulk’s 1.8% uptick was the slightest of any domestic still water segment in 2012. Direct delivery also confronted intramural competition from handy, portable PET bottles. The segment, which comprised the largest of them all as recently as the mid-1990s, accounted for 12.4% of total volume by 2012. U.S. home- and office-delivery (HOD) volume slipped from close to 1.4 billion gallons in the early 2000s to 1.2 billion gallons in 2012, when volume moved up by 2.5%.

The relatively small, essentially regional vending segment involving refillable jug containers achieved growth even in the years when total bottled water volume declined. Its low cost during economic hard times undoubtedly had something to do with vending’s positive results. It continued to grow in 2012, albeit at a far slower rate than either the domestic still water market or the bottled water market as a whole.


One of the two segments outside the domestic non-sparkling realm showed renewed vigor in 2012; the other, to put it mildly, did not. The imported water segment, the smallest of them all, is prone to fluctuations. In the 2000s, it registered double-digit percentage growth in some years, and equally sizeable contractions in others. After one of those up years in 2007, imported water’s volume fell sharply in 2008 and then plummeted precipitously in 2009. It continued to shrink in 2010 before inching up by a modest clip in 2011. Volume dropped dramatically again in 2012. Sparkling water held a small share of bottled water volume but grew at a rate faster than any other type, including retail PET, in 2012.

New York City-based Beverage Marketing Corporation is the leading research, consulting and financial services firm dedicated to the global beverage industry.
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