Bottled Water Facts & Figures

Bottled water continues to be the second largest seller while enjoying the fastest growth in the beverage industry in the United States despite a slowdown in sales in 2008. Carbonated beverages continue to dominate the beverage category with greater volume, however, bottled water is increasing its share of sales as American's beverage of choice. Bottled water still remains a consumer top choice when it comes to choosing a beverage.

Consumer Preferences

During the early 2000s, there was a major change in consumer preferences. At the start of the decade, the consumption of carbonated beverages accounted for almost 28 percent of all liquids consumed by Americans. People in America drank more than 15 billion gallons of carbonated beverages, while at the same time, they only drank 4.7 billion gallons of water that was bottled. This level of consumption placed bottle water at only 9 percent of the total beverages consumed and put it in the No. 5 drink category after beer, coffee, milk and carbonated soda.

However, the statistics changed, and by the year 2008, carbonated beverage volume had dropped to 14.1 billion gallons. At the same time, bottled water consumption volume grew to about 8.7 billion gallons. Subsequently, carbonated drinks volume shrunk to just 24 percent, while bottled water grew to about 15 percent market share of beverages.

Growth

According to the latest edition of Bottled Water in the United States, an annual study done of the beverage market by the Beverage Marketing Corp., bottled water achieved rapid growth during the early 2000s. Bottled water growth and volume rates continued to grow by double-digit percentages in two years time between 2002 and 2004. By the end of 2005, bottled water had grown by 10.8 percent and expanded further the following year by 9.5 percent. The consumer shift away from carbonated beverages and toward bottled water further eroded sales of carbonated beverages. True to form, the category of carbonated beverages recorded its fourth year of volume loss in 2008.

Revenues

During 2008, revenues declined for the first time for bottled water. Wholesale sales for bottled water initially climbed past $6 billion in the year 2000. Sales still grew to $11.5 billion by 2007. However, sales took a downturn the following year in 2008 to $11.2 billion. Even though the category of bottled water did not show any growth in 2008, it reflected an overall flatness in the beverage category as a whole and is not indicative of a lessening demand for bottled water. Much of the flatness of the beverage category as a whole can be attributed to the weak economy in general, along with increased energy costs, higher commodity prices, like plastics, and manufacturing costs. All of these costs were passed on to consumers throughout all beverage categories, not just bottled water.

Consumer Choice

Further impacting the slight downturn in bottled water sales in 2008 is that some consumers are opting for smaller packaging sizes. People tend to consume the same overall amount of liquid but are choosing smaller packages, for instance, choosing the 16-ounce-size plastic bottled water over the 20-ounce size. This in turn leads to less product waste. Likewise, consumers are reluctant to throw away any residual water left in a 20-ounce package.

In addition, large areas of the country experienced dramatically cooler or wetter weather in 2008, reducing the demand for cold beverages. Consumers were also influenced by environmental concerns and considered the impact of bottled water packaging on the environment.

Trend

The current trend still indicates that consumers have a strong preference for bottled water. Many consumers perceive bottled water as a healthier alternative to other beverage options, and this perception continues to grow the category. Americans have increased their bottled water consumption since the year 2000 from 16.7 gallons a year to 28.5 gallons a year in 2008. Carbonated beverage consumption during that time frame decreased by more than 6.5 gallons per year. Milk and fruit beverages also declined during the same time frame. Coffee and tea consumption showed small gains during the same time.

Health Considerations

Ultimately, Americans view bottled water as a healthy alternative to other beverages. Most consumers see bottled water as a product that is versatile and can be consumed any time of day. It is convenient, portable and does not need to be kept cold. For a ready-to-drink beverage, it is affordable, with pricing that is competitive. With consumer's increased interest in health and the avoidance of obesity, water remains a mainstay of the American diet. Available in various packaging options, it is extremely convenient and versatile, making it consistently appealing to consumers.

References

• Beverage Marketing Corporation
• International Bottled Water Association