UK bottled water splashes out in 2006

UK bottled water sales rose 5.8% to 2,275 million litres in 2006 and were worth almost £1,700 million in retail value, according to the 16th annual UK Bottled Water report from specialist consultancy Zenith International.

From a 13% share of total soft drinks consumption in 2001, plain unflavoured bottled water increased to 16% in 2006. Consumption per person reached 37.6 litres last year, up from 26.9 litres five years ago.

Every day hydration has become a prevailing theme for UK bottled water – the 8 glasses a day recommendation being broadly understood, if not fully acted upon by all consumers. Last year, the need to hydrate was most pressing during a very hot July and meeting demand across all channels was a particular challenge for the industry.

Sales of water in retail sizes grew ahead of the overall market in 2006, gaining 7.9% to 1,845 million litres. Growth was reinforced by: greater acceptability of bottled water by the British population; heightened media attention to the problem of obesity; and increased consumption of water in smaller packs by people on the move.

A maturing UK water cooler industry slipped back in 2006, witnessing a 10 million litres decline. Including volume through water coolers, still water claimed an overall 87% share. Natural mineral water accounted for 68% of the total market, but from 2007 Highland Spring and Malvern will no longer be classified as mineral waters.

"With consumers increasingly mindful of health and wellbeing, bottled water continues to gather influence in the UK soft drinks arena," commented Zenith Research Director Gary Roethenbaugh. "From school lunchboxes to dining out, at the gym or for hydration on the go, bottled water is ever more appreciated across a range of consumption occasions."

Figures from consumer research company BMRB International's TGI survey have shown a progressive acceptance of bottled water by the British public. The percentage of adults aged 15 and above drinking bottled water has advanced from 40% in 2001 to 56% in 2006. The survey also highlights the growing number of male bottled water consumers, with the gender divide gradually narrowing.

World market leaders Danone and Nestlé saw their combined share of UK consumption dip to 34% in 2006 as a consequence of the slowing water cooler market. Meanwhile Highland Spring, Princes Soft Drinks and Greencore Mineral Water held their positions as the next three largest operators. The top five groups accounted for 62% of total volume.

For the 2007 Zenith report, 154 companies with 226 brands have been incorporated within the market totals. Highland Spring, Princes and Greencore are again the top three UK bottled water producers, accounting for 37% of UK production.

"Despite increasing choice available to UK consumers across the entire soft drinks spectrum, bottled water has retained a natural momentum," Gary Roethenbaugh concluded. "Bottled water's purity and zero calorie virtues should continue to drive the market forward."

Zenith believes heightened competition should stimulate further volume growth in 2007 and beyond. At 38 litres per person, UK bottled water consumption remains well behind the West European average of 110 litres. Zenith forecasts annual gains of 6-7% over the next five years to reach 3,100 million litres by 2011.

The 2007 Zenith Report on UK Bottled Water contains 136 pages with a full market commentary, 28 detailed tables and profiles of the top 35 companies. Call Zenith International on +44 (0)1225 327900 or e-mail info@zenithinternational.com.

For further information, please contact:

Gary Roethenbaugh, Zenith International Ltd
7 Kingsmead Square, Bath, BA1 2AB, United Kingdom
t +44 (0)1225 327900 f +44 (0)1225 327901
zenithinternational.com