- Bottled water is on its way to overtake soda as the No. 1 beverage category in the U.S. after posting another year of strong growth, according to findings from Beverage Marketing Corp. presented at The Packaging Conference.
- Bottled water consumption rose by 7.6%, an increase over 7.3% growth in 2014. The category's compound annual growth rate came in at 4.5% from 2004 to 2014.
- While soda consumption remained slightly above bottled water last year, that level of consumption fell 1.1%, the segment's 11th consecutive year of decline. Soda's CAGR from 2004 to 2014 was -1.9%, but the rate of decline slowed in 2014 and 2015.
While the numbers prove steady sales growth for bottled water, what's less clear is how long this growth pattern will last. Bottled water is innovating with flavors to compete with other beverages and is riding the consumer health movement.
However, bottled water could run into the same issues other beverage segments: packaging waste. Single-serve coffee and beverage pods have been the main focus of the last few years, as environmental concerns are catching up to the category, contributing in part to more recent lagging sales.
But the single-serve water bottle format accounts for about two-thirds of all bottled water sales, and steady sales growth means steady growth of plastic water bottles. In response, companies have stepped in with packaging innovations to alleviate the problem. As consumers expect more from companies in terms of sustainability, these innovations will be crucial for bottled water manufacturers.