FDBusiness.com

Functional water sees growth

 Breaking News
  • HKScan Strengthens its Meals Offering With Investment in Estonia HKScan, the leading Nordic food company, plans to invest in its Rakvere unit in Estonia. The €8 million investment will go towards modernising the unit’s frying department, including the expansion of the building and the installation of new cooking and packaging lines enabling implementation of new technologies and packaging solutions. Construction is to commence in [...]...
  • Food and Drink is at the Heart of the UK’s Largest Packaging Show Packaging Innovations, Empack and Label&Print returns to Birmingham’s NEC on 28 February-1 March 2018, and is set to be the most innovative show to date. With over 290 exhibitors already signed up, the UK’s largest annual event for the entire packaging supply chain will feature the latest industry innovations and technologies, alongside a major free-to-attend [...]...
  • AGRO Merchants Group Acquires Grocontinental AGRO Merchants Group, a global leader in cold storage and logistics solutions, announced today the acquisition of UK-based Grocontinental Limited. This transaction reinforces AGRO’s position as the leading cold storage and logistics provider in the United Kingdom and Ireland, deepens its commodity expertise, and substantially enhances its value-added service offerings for customers. David Grocott and Linda Grocott, third generation owners of [...]...
  • Trade Fair and More – The Event and Congress Programme For Anuga FoodTec 2018 Resource efficiency will be the primary focus of Anuga FoodTec 2018, the leading international supplier fair for the food and beverage industry, which will be held in Cologne, Germany from 20 to 23 March 2018. Around 1,700 suppliers from more than 50 countries will be presenting their new products for the production and packing of [...]...
  • TINE to Invest €77 Million in New Jarlsberg Plant in Ireland TINE, Norway’s largest farmer-owned dairy co-operative, is to invest €77 million in a dairy with the capacity to produce 20,000 tonnes of Jarlsberg cheese a year. The goal is to secure and strengthen Jarlsberg sales outside of Norway as export supports are phased out in 2020. This will make export of Jarlsberg from Norway unprofitable. “Jarlsberg [...]...

Functional water sees growth

March 10
12:48 2016

According to a recent blog post by Virginia Lee, Senior Beverages Analyst at Euromonitor International, bottled water volumes continue to rise at the expense of carbonates. There is rising demand for beverages that offer functionality but without artificial ingredients and little or no added sweeteners. Viewing this as a “white space” opportunity, a number of companies have recently launched or relaunched caffeinated water in the US to target consumers looking for healthy and natural functional drinks. Caffeinated water joins other products such as electrolyte-enhanced water, protein-enriched water, and vitamin-enhanced water in the small but rapidly growing functional bottled water category.

The growth in products marketed as “water” reflects changing consumer sentiment. Consumers want the purity and simplicity of water and the benefits of functional drinks. Going forward, caffeinated water may have a chance to take some share from sports drinks and low calorie cola carbonates, as well as to attract older energy drinks consumers. Though these companies are currently focused on the US, there may be opportunities for caffeinated water to succeed in other parts of the world including Asia Pacific. In China, caffeinated water may be able to gain a presence by focusing on the energy-boosting aspects of caffeine to compete against carbonates and juice drinks.

Euromonitor says that sales of functional water grew by 6.9% between 2014 and 2015, and are expected to see a CAGR of 6.8% between now and 2020. This compares with a 1% year-on-year reduction in low calorie carbonate sales, with further decline forecast in the coming years. Total bottled water saw 5.7% growth in the past year, and is expected to see a CAGR of 5.1% until 2020.

Among the consumers targeted by caffeinated water producers, regular drinkers of low calorie cola carbonates appear to be the biggest group in the US. Industry observers state that many drinkers of low calorie carbonates are avid users, consuming it several times, both in the morning and as an afternoon pick-me-up. The media has increasingly focused on low calorie carbonates by questioning the safety of artificial sweeteners and citing studies linking weight gain with low calorie carbonates consumption. Negative reports about low calorie carbonates have led to their continuing decline in the US despite initiatives such as PepsiCo removing aspartame from Diet Pepsi and replacing it with sucralose and acesulfame potassium in August 2015, and the November 2014 launch of mid-calorie Coca-Cola Life with stevia. Many of these diet carbonate drinkers are believed to be switching to bottled water to improve their health. Hint Water CEO Kara Goldin has said that, “Most of our customers are on to health concerns about sweeteners, telling us that they have definitely moved away from diet sodas.” By offering the energy boost of caffeine to water and positioning itself as a healthy functional beverage, caffeinated water has the opportunity to take share from diet carbonates.

Energy drinks continues to be the fastest-growing category in global soft drinks, with off-trade volume sales growth of 9% in 2015. Makers of energy drinks have been able to attract young consumers through sports and music marketing and the offer of functionality to improve mental and physical performance. However, energy drink companies have generally not been successful in reaching older consumers who turn to coffee, cola, or energy tonics when they want an energy boost. By offering a caffeine boost minus taurine and artificial flavours and sweeteners, caffeinated water may hold appeal for older consumers. Avitae USA LLC CEO Norm Snyder said that Avitae caffeine + water’s third leading consumer group is older energy drinkers. He said that “As you get over 24, you get more concerned about health”. Among older consumers, caffeinated water may have growth potential in the workplace. Speaking about the company’s Water Joe caffeinated water, Andrea Mace, Premium Waters Regional Sales & Marketing Manager, said she has seen “increased interest in our products from technology industries”. Gaining access to the office market is likely to be challenging as most offices in the US already offer free coffee and tea. But in technology and sales companies, caffeinated water may hold appeal because of speed (no need to wait for coffee to brew) and smell (no coffee breath).

Coconut water sales have grown rapidly and outperformed other juices in the US and beyond as producers have been able to successfully market it as nature’s sports drink by emphasising its naturally high electrolyte content with no added sugar or preservatives. With the rise in the popularity of athletic activities such as spinning and yoga, caffeinated water may be able to gain some of these active consumers, especially women, who may not have related to sports drinks marketing or who were put off by its sugar and caloric count. Sports drinks have historically targeted men by featuring male athletes such as Michael Jordan. Caffeinated water producers state that one of their main consumer groups is people who work out. Avitae’s Snyder says that “Caffeine is becoming a popular pre-workout supplement for people that work out.” Hint Water’s Goldin stated, “A number of athletes drink Hint Kick, before a tennis game, before playing basketball.” Some studies have shown a link between caffeine consumption before a workout and enhanced athletic performance. However, drinking coffee before exercise is not a common ritual because it takes time to brew and drink hot coffee. Caffeinated water offers the advantage of zero or few calories, no or minimal amount of sweeteners, and no artificial colours and flavours.

As health awareness and concerns about obesity and sugar consumption increase worldwide, more consumers are expected to look for healthier beverages. Some countries in Asia Pacific including China could be receptive to the idea of caffeinated water as a healthier alternative to carbonates and juice drinks with less or no sweeteners and no artificial ingredients. Euromonitor International’s December 2015 article on Get Moving! Consumers and Exercise in the Asia-Pacific Region talks about the rise of obesity in the region as well as how fitness fever has hit Chinese women. Hectic lifestyles, growing health awareness, and a rise in disposable incomes are benefiting sales of all functional beverages in China including functional bottled water. Driving the growth is Groupe Danone’s Mizone vitamin-enriched water with 15% off-trade volume growth in 2015. Mizone’s success ties into the new trend of emerging refreshing drinks in China which offer lighter taste profiles. In a sign of potential growth opportunities in Asian functional bottled water, the private investment arm of Hong Kong business magnate Li Ka Shing, reportedly the richest person in Asia, announced a strategic investment in US-based Agua Brands. His Horizons Ventures invested in the maker of Agua Energy Water (a caffeinated water made with caffeine from the guarana berry) and Agua Fruit Essence (an electrolyte-enhanced water). The October 2015 press release announcing the deal stated that “The investment will kick-start Agua’s international expansion plans, beginning in Asia – the perfect launch market to introduce a healthier pick-me-up energy beverage.”

As sales of low calorie cola carbonates are expected to continue their decline globally over the forecast period, other beverages will take its place. The future of functionality is likely to be a growing interest in “natural” hydration where beverages offer the simplicity of water (no artificial colours, flavours, or preservatives) with functional benefits. PepsiCo’s January 2016 announcement of an upcoming organic version of Gatorade sports drink in the US reflects the change in consumer sentiment towards more natural beverages amid growing competition from “plant water” such as coconut water and electrolyte-enhanced water. In the years ahead, there is likely to be a growing convergence between bottled water, juice, and sports drinks, Lee concludes.

About Author

admin

admin

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • January 8, 2018RAI Exhibition
  • January 16, 2018Sival Plant Production Trade Show
  • January 17, 2018Dutch Organic Trade Fair
  • January 17, 2018Anfas Food Product
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements