The functional and flavored water segment has been growing for nearly a decade and is expected to grow 11.5% through 2019. There aren’t strict regulations in the bottled water section of the Code of Federal Regulations, so there is room for a lot of opportunity and innovation in the enhanced bottled water segment. Keeping an expanded definition of water in mind, I’d like to highlight several categories, including products that most closely resemble water and some that use a looser definition.
Premium: “Total hydration” is a popular marketing claim for this category. In order to communicate the premium positioning of the brand, companies have begun to include the type of filtration the water went through on the ingredient statement. Some common filtration methods include vapor-distilled and reverse osmosis. In addition to the filtration process and the origin story being highlights of these brands, water is fortified with electrolytes and minerals to achieve a pH higher than 7 — in some cases up to 9.5. Proponents say that water with a higher pH boosts metabolism and helps the body more effectively absorb nutrients. The high pH category in particular showed 57% growth in Q4 of 2015.
Market Examples: Blk, Core, Ionic Sportwater, Wat-aah, Essentia, Boxed Water
Botanical: This category includes several varieties of water — some tapped directly from the source, like maple and birch, while others are infused with garden-grown ingredients like cardamom, mint, rose, barley and lemon verbena. Some of the benefits thought to be associated with these waters include being rich in potassium, zinc, magnesium, and antioxidants.
Market examples: True Nopal, Sapp, Metro Mint, H2Rose, Ayala’s Herbal Water, V8 Infused Water, Botanic, Deo
Energy: The caffeinated water category attracts consumers looking for new ways to get an energy kick, outside of conventional energy drinks. This category is especially attractive to consumers who prefer not to drink coffee or tea when they’re looking for an afternoon pick-me-up. Sales of energy drinks topped $13 billion last year, indicating that ingredients like guarana and ginseng remain relevant.
Market examples: Avitae, WaterJoe, Hint Kick, Hiball Sparkling Energy Waters, Blink Energy Water, Hydrive
Wellness: Many of the categories above have a combination of vitamins and minerals, but this category highlights additional nutritional benefits. From probiotics that help with digestion, electrolytes that enhance performance, to fiber that helps with satiety and weight loss, these wellness-focused flavored waters are fighting for product differentiation in the grocery aisle.
Market examples: Wanu Water, Owater, Karma Wellness Water, Suja Probiotic Water
Powered by protein: To achieve the goal of 45-55 grams of protein daily, many consumers look for products that deliver protein in convenient ways. Enter protein water. Formulating with protein isn’t easy, especially in high-acid environments, but protein fortified water is catching on.
Market examples: Pro-NRG, Protein2o, Trimino , EI Water, Bodiez
Innovation in carbonation: The last few years have seen some new product innovation in sparkling waters. La Croix’s sales have tripled to $175 million since 2009. In addition to new, innovative flavors such as cranberry lime, orange vanilla, and blackberry cucumber, brands are now flavoring their sparkling water with fruit essence and fresh pressed fruits and vegetables.
Market examples: Spindrift, La Croix, Polar, Sparkling Ice, Nestle Exotics, Market Pantry
Several brands call themselves “water,” despite their relatively long ingredient statement. With global sales of enhanced water passing $35 billion in 2015 (more than double the sales from 2012), product developers and brand owners can continue to capitalize on the broad definition of water. As the regulatory climate tightens, water might not be as loosely defined, but for now, expect to see enhanced water innovation in the grocery aisle.
Ilana Orlofsky is the Marketing Coordinator at Imbibe, a Chicago-based company that develops beverages, including enhanced waters, for the top brands and retail chains. In her role, Ilana researches the food and beverage market to identify trends, emerging brands and innovative products. Her insights help inform companies to help them develop products to stay ahead of the ideation curve. Imbibe acts as a bolt-on R&D function for companies that don’t have one, or an extension of the R&D team for those who do. In this capacity, they design and supply custom components such as ingredient blends, flavors and finished beverages. For questions about your next beverage project, reach out to Ilana directly at email@example.com.
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