5 reasons that the water category is on the rise according to Guy Williams.
1. The trend towards health consciousness. People have a better understanding of the importance of hydration and growing concerns about obesity and other related diseases drive them to bottled water over sugary soft drinks.
2. Mistrust. There are those who don't trust their water supply and turn to bottled water, thinking that it is more pristine and less likely to be contaminated. There’s also the taste factor. Many consider bottled water to be crisper and cleaner on the palate than tap.
3. An increased demand for on-the-go convenience. People are out and about all day and their lives are busier than ever. Circumstances like longer commutes and trips to the gym drive the need for on-the-go hydration, which in turn drives the need for on-the-go packaging.
4. Cost. Innovation in bottling technology has helped drive down the price of water. Less plastic in increasingly lighter bottles generates financial savings in manufacturing and responds to consumer’s rising concerns over environmental issues. This enables bottled water companies to lower the price of their product on the market.
5. Underlying all this is the ongoing rise of brands and their growing presence in the lives of consumers, making these products a more acceptable, and even more desirable accessory to our modern busy lives.
Innovation and sustainability
A negative side to the rise of bottled water is the additional waste output. The companies that produce it have received considerable backlash as a result, with several environmental groups pushing the public to turn to tap water. Given that consumers now have a pretty good understanding of this problem, the demand for sustainable innovation in packaging that will address it continues to grow.
As for taking more weight out of the plastic bottles – there's always room for improvement. However, as a solution, it's not so simple. Lighter bottles may necessitate more secondary packaging when shipping to ensure that they don’t crush under their own weight. Consumer perception is also an issue. While consumers want their bottled water to cause as little impact to the planet as possible, they also want to feel like the vessel is not going to break in their bag. There are performance requirements that remain, for example, avoiding water spilling out accidentally when the cap is unscrewed.
Pepsi and Coke continue to develop their "eco" orientated PET variants, with technology that can produce 100% and partially plant-based renewable PET bottles. Initiatives like those of these soft drink giants and alternative improvements in compostable plastics will hopefully soon become real and viable sustainable solutions.
A beverage pack format on the rise, in fact a format on the rise across all of FMCGs, is the pouch. Pouches speak to the consumer as more materially conscious, and can be printed with high quality, premium graphics. Pouch packaging is certainly catching up with other alternative formats Tetra Paks and cans. There are some obvious challenges in developing pouch format packaging, but if intelligent design overcomes them, as it should, it will surely continue to be a growing sector of the category.
Being made of paper gives Tetra Paks an environmental advantage, but it can also problematic. Tetra Paks are difficult to recycle with the need to separate the differing layers of paper. In comparison, aluminum cans recycle easily. Once the core element has been mined, it can be used again and again, reshaped for different purposes. In fact, 75% of aluminum that has ever been mined is still in circulation.
The "green bottle," a hybrid of pouch and moulded paper, is starting to make inroads into the beverage world, notably in milk and more recently, wine. It’s still a relatively new format, and it remains to be seen how strong consumer uptake of it will be.
The consumer perception of water consumption as an emotional experience should also be considered. Transparent bottles speak to the purity and refreshment of water in a way that Tetra Pak or aluminum cans cannot. People seem to be able to forgo needing to see the product when it comes to soda, but when it is water – seeing is believing. Aluminum and Tetra Pak formats will most likely continue to suffer from the feeling of over-packaging in the category due to their lack of clarity, weight and solidity. A related challenge for opaque packaging formats is taste. The psychology of taste is starting to be more understood, and the extent to which colour and materials significantly affect the perceptions of it shouldn’t be underestimated.
Bottled water has already overtaken soda, and it should continue on an upward trajectory, as society becomes even more health conscious. Thus, as a result of the increased scrutiny they will be under, the focus of bottled water brands will be on the environmental impact of their products.
Consumers are slowly but surely letting go of the mindset that everything is disposable. As an everyday necessity in much of the world, the bottled water industry may be one of the first to make the shift to fully reusable. Consumers already reuse their bottles despite brands not explicitly positioning them for repeat use. There’s opportunity for brands to endear themselves to consumers by appealing to this behaviour, and look into creating reusable or at least semi-reusable systems.
Whether by force or choice, consumers will eventually let go of the idea that packaging needs to be clean, shiny and pretty. Once this psychological block is removed, there will be very interesting avenues to for brands to explore in providing a refreshing, pure and environmentally conscious experience to consumers.
Pouches and reusable filter systems are the immediate future, along with on-the-go ingredient and flavour customisation. Functional waters will surely continue to proliferate the market as consumers seek to maximise their benefits.
There’s a good chance that branded water dispensing will link up with bespoke branded packaging for a reusable and emotionally engaging experience. "On-the-go" sizes will remain focused on light-weighting and on the material technologies of delivering clear plastic substitutes. It’s probable that the 1L and 2L containers that consumers bring home to the fridge, and the formats in which bulk water is delivered to businesses, will become increasingly focused on sustainability, with recyclable paper based packaging and non-rigid storage systems leading the way.