Issues in the Market

Thanks partly to a greater premium orientation, France is Europe’s most valuable bottled water market, accounting for €7.4 billion in 2010. When it comes to volume sales, however, Italy is the undisputed leader. Volume sales of 11.5 billion litres were recorded, thanks to a per capita consumption that is twice as high as the European average.

Faced with criticism regarding its negative environmental impact, the bottled water industry has, of late, focused on developing more eco-friendly products through greener packaging. Sustainability and better environmental credentials will remain at the centre of product innovation, possibly resulting in a greater use of alternative packaging materials to polyethylene terephthalate (PET).

Another central branch of new product development has been healthier products with a no/reduced sugar, sodium and calorie content, or products that are free from artificial additives and preservatives. Also increasingly featuring on the health platform are functional products, typically offering added vitamins and minerals. These products sit well with a rapidly ageing European population.

In general, bottled water is a commodity-oriented product, bought to give a healthier, tastier alternative to tap water. It enjoys a wide appeal across different consumer groups regardless of socio-demographic definers. In the UK, however, it has a more specific and confined core user group, and is thus more of a lifestyle product.

Key points

• The bottled water industry focuses on developing more environmentally-friendly packaging to deal with criticism from environmentalists and concerned consumers.

• Significant challenges remain in the way of true sustainability and more research and development will go into the use of alternative, biodegradable packaging materials.

• Products with low/no/reduced sugar, sodium and calorie content feature strongly in new launches, as do additive- and preservative-free waters.

• Functional water is becoming increasingly important, sitting well in the setting of a graying European population.

• In Europe, bottled water is mainly a commodity product with a wide and varied consumer base, but has a more confined and specific core user group in Britain.

• Flavoured water continues to take only a small share of sales. Out of the ‘big 5’, it is most prominent in Germany and particularly the UK.

France rules by value, Italy by volume

• France is Europe’s most valuable bottled water market, worth some €7.4 billion in 2010, thanks partly to greater emphasis on premium products. When it comes to volume sales, however, Italy is the undisputed leader, with 11.5 billion litres, thanks to a per capita consumption that is twice as high as the European average.

The Consumer - Key points

• Thanks greatly to their dislike of tap water, German consumers post the highest penetration rate for bottled water.

• British consumers’ usage patterns represent an anomaly in the overall European setting, with a dependency on 15-19-year-olds, top earners, the working population, urbanites and families with children.

• While in Europe bottled water is a highly commodity-oriented product with vast appeal regardless of demographic nominators, in Britain it is more of a lifestyle product with a more specific core consumer group.

• Flavoured water continues to lack mass appeal and usage patterns vary from country to country.

Part of MINTEL study: Bottled Water - Europe, February 2011