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Western Europeans love bottled water: in 2013 they drank over 45 billion litres of it. However, while it may be a valuable product to producers and packagers alike, the truth is that growth in per capita consumption rates are expected to slow over the forecast period. Packagers and/or brand owners will be hoping that breakthroughs in eco-friendly packaging will help to arrest this slowdown in demand, but successfully accelerating growth is likely to take more than this.
In 2013, Western Europe had the highest per capita bottled water consumption of any region, with only North America coming close. This high level of average annual consumption, which stood at approximately 93 litres in 2013, drives demand in the region, a sharp contrast with Asia Pacific. Asia represents a bigger overall market, but demand comes from a far greater number of individuals consuming at about one fifth of the levels that their Western European equivalents do. The bad news for packagers and producers alike is that growth in per capita consumption is expected to slow over 2013-2018, with North America set to overtake Western Europe as the region with the highest consumption rate by the end of the forecast period.
Growth in Western Europe is expected to be sluggish. Italy is expected to deliver the fastest growth, despite its already high per capita consumption, but a CAGR of only 1% won’t be getting manufacturers excited.
Bottled water exists in a curious space, tap water is a cheaper and viable alternative for many, and the opportunities for differentiation between brands are fairly limited. A need for on-the-go hydration and concerns over the quality of tap water help to turn consumers towards the product, but concerns over the environmental costs exist, although they admittedly often take second place to budgetary factors. Organisations such as tapwater.org in the UK are encouraging consumers to move back to the tap, by emphasising the environmental damage that the production and use of the dominant PET pack type entails. Similarly, the Boxed Water is Better brand has enjoyed success in North America and Mexico with its green credentials. The product retails in a plain white liquid carton that simply displays the brand slogan in black text, subordinating the usual images of mountains and springs to the brand ethos.
Nature Works is the first packaging company to launch a water bottle made from 100% plant material in France, and will be hoping that the removal of oil from the bottle’s composition, allied to the fact that the bottle is completely compostable, will help to boost demand for the Azurelle brand in the country and across Western Europe. However, while many will applaud such efforts to reduce the environmental impact of bottled water, the primary concern for brand owners will be whether consumers will be willing to pay a premium in order to buy green.
The probability is that greener packaging is unlikely to have a serious impact on overall demand for bottled water in Western Europe. Greener choices may persuade individuals to switch brands, but the simple truth is that even the most environmentally-friendly packaging is still more damaging, and expensive, than tap water. Instead, it is likely to be developments in pack sizes and flavours that will deliver growth, especially in products aimed at on-the-go consumers.