Bottled water’s health and hydration credentials continue to drive sales despite a fresh flow of challenges.
By Gaelle Walker
Scotland’s bottled water market continued to motor in 2022 as “on-the-go occasions” came back with a welcome bang and the consumer trend towards “healthy hydration” continued to refresh sales over the warm summer season.
However, with the squeeze on consumer spending expected to tighten over the coming months, and Scotland’s deposit return scheme going live in under a year’s time, the category looks set to face a fresh swell of challenges in the months ahead.
According to Mintel’s UK Bottled Water Report 2022: “Price inflation will drive a rapid increase in average prices, boosting the appeal of free water sources and the money-saving benefits of carrying reusable water bottles.
“Tap water usage will also be supported by the permanent shift towards at-home working and the rise in ownership of at-home soda makers.”
The report also questions whether the implementation of the DRS might “present an additional deterrent for many people to use bottled water”.
Highland Spring’s top tips for better water sales
- Stock plain, sparkling and flavoured water to encourage healthy hydration.
- Position fast sellers on the bottom shelf in the chiller.
- Keep bottled water to the left/right depending on traffic flow.
- Give at least two facings to maximise visibility for shoppers.
- Restock after the breakfast and lunchtime periods.
- Have top-selling lines at pay points to encourage impulse purchases.
- Include a range of different sizes and pack formats to cater to all consumers’ needs including single serve bottles, larger formats and multipacks.
- Aim to include a range of bottle tops in your offering too. Highland Spring offers both traditional caps and sports caps, great for on-the-go occasions.
However, despite these obstacles, the category certainly still presents local retailers with a wealth of opportunities to drive sales and profits.
The enduring focus on health and hydration will continue to drive usage of bottled water and, as Mintel’s report suggests, there is also “a lot of potential for bottled water market size to expand by increasing communication around the health benefits of including additional ingredients with links to energy provision which would allow products to capitalise on health claims, taste and flavour”.
The flavoured water category has already been making sizeable waves according to the Highland Spring Group, with the total flavoured water category witnessing annual sales growth of 16% in the year to 16 July 2022 compared to 2021.
“As with all good offerings, it’s important that retailers continue to offer customers choice,” Highland Spring’s Marketing Controller Mike Buckland says.
“In the soft drinks category, stockists should ensure to stock plain, sparkling and flavoured water to encourage healthy hydration.
“It’s also important to ensure that offerings include products and brands customers know and trust, as they often gravitate towards their favourite brands.”
“A key consumer trend continues to be health and wellbeing, which continues to be a driver for consumers and their purchasing habits.”
Buckland continues: “This includes low and no sugar, and low-calorie options of popular products, but we’re noticing that consumers are looking for soft drink brands with strong health credentials and natural ingredients that will quench their thirst and taste good.
“Research shows that 38.3% of bottled water occasions were for health reasons in 2021, and we don’t expect this to change as we move into 2023.”
Four refreshing facts about bottled water
- 70% of UK adults have purchased a bottle of water of any type in the last three months (Mintel UK bottled water market report 2022).
- 41% of UK adults drink bottled water because they believe it is healthier than other drinks (Mintel UK bottled water market report 2022).
- Food-to-go sales increased by 32% in Scottish stores in the 12 weeks to May 2022 (Highland Spring).
- Plain sparkling water sales grew by 51% in the 12 weeks to May 2022 (Highland Spring).
Retailers should also be aware of “the new wave of low and no alcohol drinkers” who are opting for alternatives to traditional alcoholic products and more open than ever before to healthy alternatives such as plain or flavoured sparkling waters,” Buckland adds.
And with sustainability and environmental stewardship now firmly on the shopper agenda, brands which can clearly demonstrate their green credentials also look set to win a greater share of sales going forward, Mintel says.
Highland Spring, whose bottled products are 100% recyclable recently opened a new rail freight facility in Blackford, Perthshire in a move designed to further its goal of reaching net zero by 2040.
Scotland’s DRS goes live on 16 August 2023
There’s now well under a year until the implementation of Scotland’s new Deposit Return Scheme, transforming the way in which local retailers currently manage single use drinks containers.
Covering soft drinks and alcoholic beverages, including PET plastic bottles, metal cans, and glass bottles, Scotland’s DRS has the goal of ensuring that 90% of drinks containers are recycled and aims to drive the country’s move to a circular economy.
From 16 August 2023, retailers will have to collect and store returned bottles and cans and pay out consumer deposits.
Local retailers have two key options when it comes to collections: they can commit to a reverse vending machine (RVM) which will allow them to claim a fee of 3.55p per container for the first 8,000 containers returned each week and 1.35p for each additional container.
Or, they can chose to manually handle returns, which offers an enhanced fee of 2.69p per container.
Scheme administrator Circularity Scotland claims it will arrange for regular collections to stores and can arrange extra one-off collections if required.
Formal registration for the scheme is set to open in December and retailers are encouraged to sign up to the Circularity Scotland website now to receive all the information they will need to help them prepare.
Visit circularityscotland.com for more information.
