The Rising Demand for Sparkling Bottled Water in the US



New launches

In May 2015, Nestle Waters North America, a business unit of Nestle (NSRGY), announced the launch of Perrier L’Orange, a sparkling mineral water brand with lemon and orange flavor. The other flavors under the sparkling bottled water brand Perrier include original, citron, lime, and pink grapefruit. The launch is in line with the growing demand for the sparkling bottled water category, which in 2014 accounted for 3.1% of the total US bottled water volumes.

We discussed the non-sparkling bottled water category, the largest component of the US bottled water market in part two of this series. The third category, imported bottled water, accounted for 1.1% of the total US bottled water volumes as per data from the Beverage Marketing Corporation.

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Volume growth

The domestic sparkling bottled water segment volume increased by 17.9% to 338.8 million gallons in 2014 in comparison to volume growth of 7% and 11.5% in the non-sparkling and imported bottled water categories.

The demand for sparkling water is rising as consumers who prefer carbonated beverages consider sparkling water to be a better choice, as sparkling water doesn’t contain sweeteners or artificial ingredients. However, many companies are now launching flavored versions of sparkling water beverages. PepsiCo’s (PEP) Izze sparkling water is available in blackberry pear, Mandarin lime, and raspberry watermelon.

In early 2014, Coca-Cola’s (KO) Dasani brand launched an unsweetened, zero-calorie sparkling water beverage in lime, lemon, apple, and berry flavors. Dr Pepper Snapple’s (DPS) Penafiel is one of the top-performing carbonated mineral water brands in Mexico and is now available in the US. PepsiCo, Coca-Cola, and Dr Pepper Snapple together account for 15.6% of the portfolio holdings of the Vanguard Consumer Staples ETF (VDC) and 15.3% of the iShares U.S. Consumer Goods ETF (IYK).

Talking Rain’s Sparkling Ice, Nestle’s Perrier, and National Beverage’s (FIZZ) LaCroix are some of the leading brands in the US sparkling bottled water category.


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