North America’s packaged water industry is being shaped by premium brands, says GlobalData

Producers around the globe have started to innovate production lines that capitalise on premium tags as price consciousness remains a vital driver of purchase for many consumers, particularly those in North America. In the packaged water industry, premium priced packaged water reported a compound annual growth rate (CAGR) development of 13.2%* between 2015 and 2019, according to GlobalData, a leading data and analytics company. Manufacturers can capitalize on this growth with innovative new products that promote a different mineral content, from unique water sources, to premiumize their products.

Brands are beginning to develop new strategies to capitalize on the growth of premium priced packaged water in order to maintain success. For example, Nestle recently announced that it would be selling some of its less successful packaged water brands such as Pure Life, Poland Spring, Ice Mountain and Deer Park, with the total acquisition expected to cost $4.3bn.

Holly Inglis, Beverages Analyst at GlobalData, comments: “Nestle’s sale highlights a shift in focus for the company, which will enable development of its premium water lines such as Perrier, Acqua Panna and San Pellegrino. A development of this nature will likely evoke similar change in other leading packaged water brands in the long term.”

Additionally, Cove, a California-based company, launched its first water bottle made from biodegradable material at the end of 2019. Due to its unique and sustainable packaging development, coupled with ‘purified water’ tags, this brand connotes a premium label.

Inglis continues: “Packaged water’s unique ‘health-halo’ positioning has emphasised its success in the North American market in recent years. As a natural hydrator, with digestive health capabilities, growth during the COVID-19 pandemic has also been paramount. GlobalData’s research indicates that 41%*2 of US consumers have been purchasing slightly more, significantly more, or stockpiling packaged water since the pandemic began.”

In other global regions, brands have come under large scrutiny over the impact of packaged water production on the environment. Therefore, manufacturer positioning in terms of environmental sustainability and social consciousness will play a huge part in success. For example, leading premium water brand, Fiji, in North America, has combined sustainability with premium water sources and filtration systems.

Inglis adds: “GlobalData’s survey found that 46%*3 of consumers in North America find bottled water very appealing, with a further 32% highlighting it is somewhat appealing. An impressive future is thus expected for packaged water in the long term; however, the focus will remain on how producers are able to maintain social, environmental and sustainable consciousness, while presenting a low price to consumers. Marketing techniques and an emphasis on utilizing premium ingredients will likely target further growth.”

* GlobalData’s Soft Drinks Market Analyser: Brand Volume and Value

*2 GlobalData’s COVID-19 Recovery Consumer Survey Results Week 10: US

*3 GlobalData’s 2019 Q4 Consumer Survey Results: North America

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