Consumer Shift to Bottled Water Uncaps New Generation of Products
By Neil Kozarsky, President T.H.E.M.
If you are a consumer products marketer or Packaging
professional, the greatest “calls to action” are clear
changes in consumer lifestyles and behavior.
The International Bottled Water Association (IBWA) states
that the sales of bottled water have increased by five-fold over the
past decade. Bottled water sales reached over $10 Billion in the US
in 2006. It is projected that within the next 6 years, the bottled water
industry will grow to $45 Billion in the US alone.1
The “obvious” reasons for this consumer behavior include
perceptions that tap water does not taste as good as its pre-packaged
counterpart. In addition, commonly held perceptions that bottled water
is “safer” than tap water are compelling, if not entirely
accurate. Concerns over tampering or bioterrorism in recent years have
unquestionably helped fuel the growth.
According to Beverage Marketing Corporation, domestic
non-sparkling water should grow at a five-year compound annual growth
rate (CAGR) of 9.1%. Its share of the market will go from 95.1% in 2005
to 96% in 2010. In 2006, the preliminary number of gallons per capita
consumption reached 28.3, an annual change of 8.6%.2
As the bottled water markets continue to grow, brand
owners and product manufacturers are faced with profound challenges
and opportunities. This is where the less-obvious drivers resulting
in such behavioral changes must be identified and addressed. Starting
with the known:
- It has become common knowledge that, on average, 8 glasses
of water/day support greater health and wellness.
- Bottled water is a logical response
for the mobile consumer as it’s portable and
convenient to carry.
- The world’s largest beverage marketers have artfully transformed
their focus and strategies to highlight
both sales of water and tasteful ingredients to enhance
the experience, as carbonated and sugar-based
business units are in decline.
- According to a study by Zenith International, the worldwide consumption of bottled water per person is expected to surpass carbonated soft drinks within the next 5 years.3
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Marketing Opportunities Abound
Now that bottled water has amassed such widespread acceptance and mainstream
use, beverage marketers have stepped up with dosing formats, such as
stick packs, that are ideally suited for mixing flavorful powders into
the bottle while “on the go.”
Stick packs were developed for applications such as sugar and non-dairy creamers
dating back into the ‘70’s, and have flourished both in Japan and
Europe for an expanding range of applications. Now, stick pack usage in North
America is on the rise because they are emerging as the consumer-preferred dosing
format for mixing powder into bottled water. It is projected that stick packs
usage in North America will grow to nearly 80MM in 2007. The 2007 global projection
of stick pack usage is nearly 180MM.4
Forward-thinking marketers are recognizing that beverage powders are but one
example of tried and true products that can be effectively liberated from traditional
bulk delivery methods (plastic tubs, paperboard canisters, for example) that
were developed for use at home.
A new round of product launches is now underway, capitalizing on the surging
popularity of bottled water. Energy and sports nutritional supplements are rapidly
finding their way into stick packs, as well. Rather than taking a chance with
the development of a new product, which can be costly, risky and time-consuming,
marketers are reinventing tried and true brands with innovative new packages
that offer obvious benefits and functionality to consumers.
Since a recent Harris study reported what most people take for granted, that
over 40% of consumers are averse to taking pills and capsules, even more products
and applications are likely to be considering revitalization through the bottled
water phenomenon.5 Why go through the unpleasantness of swallowing
a pill, if
you can gain the equivalent benefit through a pleasant-tasting “stick-and-sip” experience
linked
to bottled water?
Bottled water is unquestionably here to stay, and that can only mean
that some time-honored delivery systems and dosing formats are in trouble.
On the other side of the coin, the shift away from the tap is signaling
underlying changes in consumer lifestyle and consumption patterns that
are ripe with new product opportunities. In any case, the tide has turned,
and visionary brand marketers and packaging professionals can only be
rewarded by “going with the flow.” About the Author
Neil Kozarsky joined the Marlton, NJ-based Technical
Help in Engineering and Marketing (T.H.E.M.) in 1980 and became President/CEO
in 1992. T.H.E.M., established in 1973, provides innovative, differentiating
packaging solutions to major food, beverage and healthcare organizations
on a global basis.
Kozarsky has led a number of successful technology transfer
initiatives with Japanese machinery and material innovators, resulting
in mass commercialization results on both sides of the Pacific. Sanko
stick packaging machinery and Hosokawa Yoko’s proprietary Fancy
Cut® easy-open film were introduced in North America by T.H.E.M.
in 1996. Stick packaging, now measured in the billions on a unit basis,
is being utilized for products marketed by companies including Nestle,
P&G, Bristol Myers Squibb and Heinz.
Kozarsky is a graduate of Hobart/William Smith Colleges
and attended Rutgers Center for Packaging Engineering. He is an avid
observer of the Japanese packaging scene and has logged over 90 trips
to Japan since 1992. Kozarsky has written numerous articles for leading
packaging publications and is a featured presenter at conferences on
an international basis. He resides in Mt. Laurel, NJ, with wife Megumi
and has three children.
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1 The International Bottled Water Association (IBWA), The United States Bottled Water Market, www.royalspringswater.com, 2006
2 Beverage Marketing Corporation, The Projected National Bottled Water Market, 2006
3 Zenith International, Bottled water to beat fizzy drinks in five years, www.foodnavigator-usa.com, 2006
4 PTI Solutions, Top-Line Review: 2006 Global Pouch Forum, www.pti-solutions.com, 2006
5 Schwarz Pharma, Inc., Pill-Swallowing Problems in America: a National Survey of Adults, study prepared by Harris Interactive, 2003
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