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2009BWstats

2009BWstats

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Published by: swadeshiaqua on May 15, 2011
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10
   B  o   t   t   l  e   d   W  a   t  e  r
April/MAy 2010
 
I vigorous growth (until very recently) distinguished bottled water rom the resto the liquid rereshment beverage marketplace, then its perormance lately made itlook rather typical. As a group, the various beverages vying with bottled water orconsumers’ attention declined or the second time too in 2009. Carbonated sot drinks(CSDs), the sole category with greater volume than bottled water, extended its multi- year streak o contraction. Sports beverages, like bottled water, had successully traded on the ability to hydrate and or many years enjoyed muscular volumegrowth, suered a ar more substantial retrenchment, with volume allingby 12.5 percent during the year. In contrast, bottled water’s rate o reduction was much slower; it was also less pronounced than thesetbacks experienced by ruit beverages or ready-to-drink coee.Indeed, bottled water shrank by less than the liquid rereshmentbeverage marketplace as a whole in 2009, allowing bottled waterto again augment its share o Americans’ beverage diet—i only slightly.
BOTTLED WATER AND SOFT DRINKS
The impact o the economic downturn on the bottledwater business—and the beverage market as a whole—atthe end o the 2000s punctuated a period o considerablechanges in consumer preerences. At the beginning o the decade, CSDs accounted or nearly 28 percent o totalliquid consumption by U.S. consumers. Then, Americansdrank more than 15 billion gallons o CSDs, comparedwith 4.7 billion gallons o bottled water, which representedless than 9 percent o total beverage consumption and placedbottled water as the number fve beverage category behind beer,coee, and milk as well as CSDs.
A
s recently as the mid-2000s, the U.S. bottled water industrylooked like a highly unusual beverage industry marvel: A category
that had achieved signifcant scale yet continued to register
forceful growth. Indeed, for a while that’s exactly what it was, withboth volume and sales continuing to enlarge at double-digit percentagerates—or at rates close to those heady levels—even after bottledwater became the second-largest beverage type, as measured intotal volume, in the country.
Bottled Water 2009 
Challenging Circumstances Persist:
Future Growth Anticipated
By John G. Rodwan, Jr.
U.S. and International Developments and Statistics
 
 o t   t  l   e d W a t   e
April/MAy 2010
11
 
By 2009, CSD volume had slipped to less than 14 billiongallons, while bottled water’s stood at almost 8.5 billiongallons. Consequently, CSDs’ market share had eroded toless than 24 percent, while water’s had neared 14.5 percent.In terms o liquid rereshment beverages exclusively, bottledwater accounted or more than 29 percent o total volumein 2009, up two-tenths o a percentage point rom the year beore.
U.S. BOTTLED WATER MARKET
Volume and Producer Revenues2001 – 2009
YearMillions oGallonsAnnual %ChangeMillions of DollarsAnnual %Change
20015,185.3 -- $6,880.6 --20025,795.6 11.8% $7,901.4 14.8%20036,269.8 8.2% $8,526.4 7.9%20046,806.7 8.6% $9,169.5 7.5%20057,538.9 10.8% $10,007.4 9.1%20068,255.0 9.5% $10,857.8 8.5%20078,757.6 6.1% $11,551.5 6.4%20088,669.3 -1.0% $11,178.5 -3.2%20098,454.0 -2.5% $10,595.0 -5.2%
Source: Beverage Marketing Corporation
Prior to the U.S. recession and the attendant industry downturn, rapid volume growth characterized bottled wateror much o this period, as reported in the latest edition o 
Bottled Water in the U.S.
, Beverage Marketing Corporation’sannually published analysis o the market. Bottled watervolume achieved double-digit percentage growth rates in two years and advanced at rates close to that level in several others.Ater growing by 10.8 percent in 2005, or instance, bottledwater volume enlarged by 9.5 percent in the ollowing year.CSDs, in pronounced contrast, ollowed several years o slowgrowth with multiple volume reductions. Indeed, the category underwent its th year in a row o volume reduction in 2009.However, in a signicant turnabout rom earlier years,bottled water volume declined by 1.0 percent in 2008 andlosses intensied in 2009. Furthermore, producers’ revenuesdeclined in both 2008 and 2009 as well. Bottled waterwholesale dollar sales rst exceeded $6 billion in 2000. By 2007, they topped $11.5 billion. Category sales declined to$11.2 billion the ollowing year and to less than $10.6 billionin 2009.
STRAINED U.S. ECONOMY
While bottled water ailed to realize growth in 2008or 2009, its sluggishness refected orces aecting the entirebeverage marketplace and most likely did not indicate apermanent diminishment in demand or bottled water.Straitened economy conditions aected all sectors o theindustry. Energy and commodities costs presented ongoingchallenges. Input costs or items including polyethyleneterephthalate (PET), aluminum, and uel contributed tohigher prices or consumers, which, in turn, aected virtually all liquid rereshment beverage segments. In addition, someconsumers began opting or smaller, more aordable packagesizes. While people still are consuming the same overallamount o liquid, the impact o trading to smaller sizes—such as going rom the 20-ounce size to the 16-ounce—mabe the reduction o product waste. Consumers may havebecome vigilant about not throwing away 4 ounces o the20-ounce size.
DEMAND FOR BOTTLEDWATER PERSISTS
Consumers have demonstrated a strong thirst or bottledwater, which will persist in the uture. Changes in averageintake indicate potent interest in a product that consumerslook to as a healthul alternative to other beverages. Americansupped their annual consumption by more than 11 gallonsrom 16.2 gallons per person in 1999 to 27.6 gallons 10 years later. During the same period, per capita consumptiono CSDs dropped by more than nine gallons. Per capitaconsumption o other major beverage categories, like milk andruit beverages, also declined. Other types, including coeeand tea, were characterized by stability (though the ready-to-drink versions o both categories made gains). Thus, bottledwater proved itsel to be the key component o the liquidrereshment beverage market.
U.S. BOTTLED WATER MARKET
Per Capita Consumption1999 – 2009
YearGallons Per CapitaAnnual % Change
199916.2--200016.73.5%200118.28.6%200220.110.6%200321.67.2%200423.27.5%200525.49.7%200627.68.4%200729.05.3%200828.5-1.8%200927.6-3.2%
Source: Beverage Marketing Corporation
 
12
   B  o   t   t   l  e   d   W  a   t  e  r
April/MAy 2010
U.S. BOTTLED WATER MARKET
Volume and Growth by Segment2001 – 2009
Non-Sparkling Domestic Sparkling Imports TotalYear Volume* Change Volume* Change Volume* Change Volume* Change
20014,917.3--144.0--123.9--5,185.3--20025,487.511.6%149.53.8%158.728.0%5,795.611.8%20035,923.98.0%152.62.1%193.321.8%6,269.88.2%20046,411.38.2%166.89.3%228.618.2%6,806.78.6%20057,171.411.9%185.010.9%182.5-20.2%7,538.910.8%20067,901.410.2%189.32.3%164.3-10.0%8,255.09.5%20078,376.66.0%200.15.7%180.910.1%8,757.66.1%20088,302.9-0.9%204.72.3%161.8-10.6%8,669.3-1.0%20098,123.8-2.2%202.2-1.2%127.9-20.9%8,454.0-2.5%
* Millions of gallons Source: Beverage Marketing Corporation
Multiple actors contribute to U.S. consumers’ enthusiasmor bottled water. These include health, saety, convenience,and value. Bottled water’s versatility makes it suitable orconsumption at any time o day and in virtually any situation.It doesn’t need to be kept cold (like sot drinks or juice) orwarm (like conventional coee or tea). As ar as ready-to-drink commercial beverages go, bottled water is relatively inexpensive and, with competitive (sometimes aggressive)pricing, it is becoming increasingly aordable or consumers.Various packaging types, ranging rom bulk to single-serve,acilitate a variety o uses. Consumers’ interest in oods andbeverages that coner benets above and beyond rereshmentalso contributes to the quintessential hydrating beverage’sperormance in recent years.Amid concern about obesity and other health matters,bottled water’s lack o calories and articial ingredientsattracts conscientious consumers. Even where tap water may be saely potable, many people preer bottled water, whichthey regard as superior in taste. The convenient availability o packaged water wherever beverages are sold also crucially dierentiates bottled water rom tap.Even though bottled water is requently compared to tapwater, bottled water actually achieved its market positionby luring consumers away rom other packaged beveragesperceived as less healthy than bottled water. While someconsumers may have turned away rom regular, ull-caloriesodas in avor o their diet versions, many others opted toimbibe bottled water instead.
CATEGORY DEVELOPMENTS
Domest
 
ic non-sparkling water remains the most substantialsegment o the U.S. packaged water industry. Domestic non-sparkling water’s 8.1 billion gallons represented 96.1 percento total volume in 2009. As a whole, domestic non-sparklingdeclined at a slower rate than the overall bottled water market.The non-sparkling category includes diverse parts thathad very dierent results. In 2009, all but one o its segmentsdeclined, though rates varied considerably. Throughout mosto the 1990s and 2000s, the retail premium PET segment—consisting o still water in single-serve PET bottles—drove theoverall category’s development. Indeed, the PET componentenlarged by a double-digit percentage rate 16 consecutivetimes through 2007. Growth slowed markedly in 2008 beoreit disappeared in 2009. Yet PET’s 0.7 percent reduction wasar less than the 2.5 percent loss measured or bottled waterin general. Besides, PET volume in 2009 o almost 5.2 billiongallons stood more than 4.1 billion gallons higher than it hadin 1999, and its share o total bottled water swelled rom 24percent to more than 61 percent during that 10-year period.Retail bulk volume growth slowed as more and moreconsumers selected convenient PET multipacks in large ormatretail channels instead o larger (1 to 2.5 gallon) sizes. Its shareeroded rom nearly one-quarter o the category volume atthe beginning o the century to less than 12 percent by 2009,largely as a result o competition rom PET. Direct delivery also conronted intramural competition rom handy, portablePET bottles. The segment, which comprised the largest o them all as recently as the mid-1990s, accounted or 14 percento total volume by the end o the 2000s.The relatively small, essentially regional vending segmentinvolving rellable jug containers achieved growth late in thedecade ater several years o contraction. Its low cost duringeconomic hard times undoubtedly explains vending’s rebound.The two segments outside the domestic non-sparklingcategory both saw declines in 2009. The imported watersegment, the smallest o them all, is prone to fuctuations.

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