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By Allen Gibson
April 22, 2004
www.BeverageStocks.com
Americans have been guzzling water out of bottles
lately like it’s going out of style.
It isn’t.
Bottled water, from the big jugs you have at the
office to the little bottle you just bought at the gym, has become a huge
business, with 30.8 billion gallons of bottled
water consumed globally in 2001 and consumption forecast to rise to 50
billion by 2008.
Water sales boomed all during the nineties, but have
flattened out lately with resulting downward pressure on margins.
But the news is far from bad, because there’s a
whole new water coming. Water that is specifically designed to answer
consumer’s growing desire for lifestyle enhancing products that will help
them avoid fat, get fit, and have more energy.
The new ‘enhanced’ water is basically water with
things added that either taste good or are good for you. Preferably both.
The booming awareness of obesity and its associated health problems is
accelerating the trend.
Enhanced water is considered a niche market right now,
but that's what experts called plain water 10 years ago. Sales are forecast
to double to $5.6 billion by 2010, says Nutrition Business Journal.
The
next big thing…
Nutraceutical:
“A food or naturally occurring food supplement thought to have a
beneficial effect on human health.”
The next big thing looks to be waters that promise
health benefits beyond mere hydration. Benefits as specifically targeted as
helping a woman through menopause. Or how about helping lose weight?
Beverages are an ideal delivery systems for
nutraceuticals, and consumers seem more willing to experiment with beverage
products than with solids. Which is good, because water is an ideal medium
for delivering benefits to the body.
The marketers of
“Skinny Water” agree, and plan to become a force in the diet industry
with the launch this summer of their uniquely targeted product – a water
to curb your appetite and decrease carbohydrate uptake to help you lose
weight. Their timing seems fortuitous.
According to New
Nutrition Business Magazine, a
key factor for success in the enhanced marketplace will be keeping water
free of calories. They believe “Fruit 2.0”’s meteoric sales rise from
$15 to over $100 million in three years had more to do with the brand’s
combination of taste and zero calories than with the vitamins in the
product. That was a hard lesson for the makers of “Clearly Canadian”,
one of the pioneers in the enhanced water field, whose sales dropped
significantly after consumers started counting calories.
Skinny Water’s Michael Salaman says, “The one
thing every diet calls for is to drink more water! Our patent-pending
formula has been clinically shown to reduce carb-uptake, decrease appetite,
and increase fat burn without stimulating the nervous system. And it has no
sugar or calories!”
Skinny Water might be at the heart of two converging
trends. Julian Mellentin editorializing in New
Nutrition Business Magazine noted “the big story of the last decade
was the boom in the U.S. dietary supplement market. The story of the next
decade will likely be the boom in beverages offering ingredients and
benefits hitherto found only in dietary supplements.” He adds that
consumers seem more willing to take their supplements in beverages than in
solid products.
Enhanced waters are already the
fastest-growing market segment - to the tune of $245 million wholesale, up
from a mere $20 million in 2000, according to research by Beverage Marketing
Corp. (BMC) in New York. A big appeal of such products for
manufacturers, and investors, are the enhanced profit margins they offer, as
well as the chance to develop brand loyalty among consumers – something
which plain bottled water hasn’t achieved.
Consumers want their water to be more. More thirst
quenching, more exhilarating, more energizing, more healing, more slimming,
more…everything.
Let
the branding begin…
A key to any brand’s success in this market will be
developing consumer loyalty. To do that, suggest the experts, you must get
the consumer to associate your product with specific positive feelings and
experiences. The rise of nutraceutically-enhanced waters offers an obvious
opportunity to do just that.
With such
big growth, it’s no surprise that the major players are piling in. Coke
and Pepsi have top-selling distilled waters and both are now expanding those
brands with enhanced water lines called Aquafina
Essentials and Dasani NutriWater. Then there’s Energy Brand’s
“glaceau vitaminwaters,” with a dozen drinks in a rainbow of colors,
each with a name that promises more than just water- like
"determination," and "focus.” Other
brands diving in include Gatorade, FUZE, Long Life Beverages, Speedo and
even pharmaceutical company Baxter International, whose “Pulse”
has a women's formula, for instance, "to reduce the occurrence of
symptoms associated with menopause."
If you can deliver an efficacious product that
delivers real health benefits to the consumer, there should be lots of room
in a growing market that is not dominated by the majors like the soda market
is. At least not yet.
The Nike of the enhanced water world could be waiting
in the wings.
Allen
R. Gibson - Staff Writer
Allen
R. Gibson has over twenty-five years of experience in media and corporate
communications. He has been a
reporter, television producer, and marketing communications consultant for
public companies in both the US and Canada.
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