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"Water, water, everywhere"…and boy do we drink! Coleridge’s famous quote (Rime of the Ancient Mariner) is nothing short of an understatement when we think of bottled water’s conspicuous consumption and variety. Whether we are shopping, eating, working out, studying, or even at a board meeting, bottled water is everywhere. Now think of all the varieties in the seemingly never ending array of bottled water products: there is bottled mineral water, spring water, sparkling water, artesian well water, and purified water. Then there exists the other bottled water categories: distilled water, fluoridated water, calcium enhanced water, protein enhanced water, hyper-caffeinated water, vitamin infused water, mint flavored water, fruit-flavored water, hydrating water, and now even super oxygenated water and cosmeceutical water.

With such abundance of choice and consumption, is it any wonder that the bottled water industry is the second largest commercial beverage category by volume today? In fact, in 2005 (in the US alone): total bottled water volume exceeded 7.5 billion gallons (10.7% increase from 2004), bottled water per capita consumption was 26.1 gallons (increasing from 23.8 in 2004), and wholesale dollar sales for bottled water exceeded $10 billion in 2005 (9.2% increase from 2004).

These statistics are concrete evidence of consumer demand for bottled water, but what exactly seems to be all the hype? Why is it that we imbibe bottled water so regularly? Well, among current trends, taste is the number one reason why people prefer bottled water. Other trends include increasing health concerns and the emergence of the prevalent number of bottled water categories.

It’s these trends, along with a flooding of consumer demand and sales that seems to have all businesses competing to take advantage of the bottled water industry. From restaurants, to beverage stands and convenience stores, everyone wants to gain on bottled water’s undeniable profits. Combined with bottled water’ readily accessibility and variety, increasing bottled waters’ sales and consumption may very well continue to ascend to unprecedented heights; thus leaving us with "water, water, everywhere"!

References:
"Bottled Water: More than Just a Story about Sales Growth." International Bottled Water Association, April 13, 2006.

Graham Wiemer, "Bottled water floods the market; large and small companies alike are rolling out new flavors and packaging to grab and hold consumers' attention." Food & Drug Packaging, May, 2005.

Sherry A. Hallstead. "Trumping tap: converting tap water drinkers to bottled water fans is clearly profitable." Cheers, May 2006.
Frank I. Salazar

Industry Snapshot: Bottled Water Industry

Take a look at our full industry report on Bottled Water Industry (PDF Format). If you are interested in other industry snapshots, visit our SBDC Counselors Toolkit.

Links of Interest

The International Bottled Water Association
Fascinating Water Facts
Bottled Water: Pure Drink or Pure Hype - National Resources Defense Council
Water Quality and Health Council
Susan Yara "Everybody in the Water!" - Forbes Online. April 13, 2006
Sherry A. Hallstead."Trumping tap: converting tap water drinkers to bottled water fans is clearly profitable."- Cheers, May 2006.

Did You Know?

Want to start a small business? You likely have a valuable, resource right there in your own town at the Small Business Development Center. A phone call today came from a prospective business owner in the Atlanta area who needed assistance launching her business. There are business counselors or advisors who meet daily (free of charge) with potential small business owners just like one who called. Similarly, tax dollars fund the SBDC National Information Clearinghouse operation which supports business advisors with requested market research information for their clients. It is often that the information ends up in a well-crafted business plan to pass muster with the loan officer at the local bank.

Find your state and the closest SBDC office at http://sbdcnet.org/sbdc.php.

Are You Paying Attention to
Demographic Trends?

Since the mid-1990s more than half of the U.S. population was drinking bottled water from nearly 700 brands. According to 2005 data, the average consumption per person was 26.1 gallons!

But in terms of demographics, who is drinking all this water? An American Demographics article from Marcia Mogelonskim "Water Off the Shelf" reports that "while Americans with annual incomes of $60,000 per year or more are about 35 percent more likely than those of lesser means to buy bottled water, the purchasers of bottled water are hardly limited to high income yuppies." In another article from the same publication, "Black, Asian, and Hispanic households are more likely than Whites to use bottled water, even though Blacks and Hispanics as a group have lower-than-average household incomes..."
How about internationally? Who leads the bottled water market?

GLOBAL BOTTLED WATER MARKET
Leading Countries' Consumption and Compound Annual Growth Rates
2000 – 2005
2004		Millions of Gallons	CAGR
Rank	Countries	2000	2005	2000/05
1	United States	4,725.1	7,539.8	9.8%
2	Mexico	3,280.0	4,963.3	8.6%
3	China	1,582.2	3,395.1	16.5%
4	Brazil	1,799.6	3,224.3	12.4%
5	Italy	2,434.5	2,932.9	3.8%
6	Germany	2,217.7	2,784.6	4.7%
7	France	1,970.0	2,216.9	2.4%
8	Indonesia	1,135.3	2,008.6	12.1%
9	Spain	1,110.8	1,558.6	7.0%
10	India	567.5	1,625.5	23.4%
	Top 10 Subtotal	20,822.7	32,249.6	9.1%
	All Others	7,734.5	11,047.8	7.4%
	TOTAL	28,557.2	43,297.4	8.7%

By J. Eric Lomeli

Resources:
Natural Resources Defense Council
International Bottled Water Association

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