Coke in hot water

Bottled water is hot again. The global market has accelerated to growth of 7-8% a year. The UK market is up by double figures (see press release below). ‘Water plus’ concepts are becoming more common. Water is undeniably healthy. Bottled water has the lowest environmental footprint of any packaged beverage.

So, what are we to read into Coke’s impending UK launch ? To me, some of the details are quite surprising but they also seem well thought through.

Coke certainly has to avoid repeating the Dasani disaster of 2004. The principal lessons from that were not bottling from tap, maintaining quality and managing consumer confidence.

Smartwater will come from a spring water source and will be filled at an established water bottling site with recent extra investment.

Its UK proposition will be very simple and mainstream. A clean taste with a good value price. The processing will be proven. The mineral content will be a straightforward light combination.

What then surprises me ? I suppose I would have expected an entirely natural water without added minerals, a more premium price and branding unrelated to the more functional Vitaminwater.

I think, however, that Coca-Cola has found reasonable answers. It needs to be more active in water as a healthy and high growth opportunity. It has to do this with a different approach to other brands, which is also reflected in the Smartwater bottle sizes. The branding is no doubt intended to appeal to the younger on-the-go lifestyle consumer of the future.

It won’t be an easy ride for Coca-Cola. Consumers will take time to connect. But an uncontroversial first year with a quiet build up would represent good progress and I wouldn’t pour cold water on that.

PRESS RELEASE : 6TH MAY 2014

UK BOTTLED WATER DRINKS CONSUMPTION UP 10% IN 2013

In its 23rd annual report on the UK bottled water market, specialist food and drink industry consultancy Zenith International has added analysis of flavoured, functional and juicy waters for the first time.

According to Zenith, UK consumption of all bottled water drinks rose by 10.1% in 2013 to 2,770 million litres with a retail value of £2,300 million. Volumes are now 50 times the level of 30 years ago and represent 19% of all soft drinks consumed.

“Bottled water drinks have become increasingly accepted as an ideal beverage category for consumers,” commented Zenith Chairman Richard Hall. “Consumers are placing ever greater value on their key attributes of healthy hydration and on-the-go convenience. There are still some critics about the environmental impact, but their overall footprint is in fact lower than any other packaged beverage.”

Plain bottled water sales volume in retail pack sizes jumped by 11.6% to 2,090 million litres, the highest rate of growth for 10 years. Flavoured, functional and juicy ‘water plus’ drinks rose 8.3% to 410 million litres. Bottled water cooler sales improved by 1.8% to 270 million litres after several years of decline.

“2013 was the best year for bottled water growth since the economic downturn and was undoubtedly helped by the strengthening economy as well as better summer weather,” Richard Hall added.

Amongst other findings of the 2014 Zenith report:

• Still water drinks were responsible for 82% of 2013 volume and sparkling water drinks 18%.
• Plain bottled water accounted for 85% of total consumption, flavoured and functional waters 13% and juicy waters 2%.
• The top 5 plain water brands by volume were Highland Spring, Evian, Buxton, Volvic and Nestlé Pure Life.
• The top 3 water plus brands by volume were Volvic Touch of Fruit, Calypso Clear and Drench Juicy.

“It is fantastic to see the bottled water category in such growth and people increasingly choosing to drink water. The Natural Hydration Council works hard to promote healthy hydration and water in all forms, whilst also challenging misconceptions and inaccuracies around bottled water. It is good to see yet more evidence where behaviours of the British public demonstrate they understand and feel the benefits of hydrating with water,” commented Natural Hydration Council General Manager Kinvara Carey.

Zenith forecasts continuing overall growth by a further 22% towards 3,400 million litres by 2018.

The Zenith 2014 UK Bottled Water Drinks report contains 249 pages with a full market commentary, 40 charts, 54 detailed tables and 35 company profiles. Call Zenith International on +44 (0)1225 327900 or e-mail info@zenithinternational.com.

Notes for Editors:

1. Two charts are available on request.

2. For further information, please contact:

Richard Hall or Cecilia Martinez, Zenith International Ltd

7 Kingsmead Square, Bath BA1 2AB, United Kingdom

t +44 (0)1225 327900 f +44 (0)1225 327901

zenithinternational.com