Dive Brief:
- Specialty sparkling, mineral and functional waters have been driving strong growth in the bottled water category, which has surpassed carbonated soft drinks to become the largest beverage segment by volume in the U.S, according to Food Navigator. Specialty waters grew 75% between 2014 and 2016, and will continue to grow at this rate through 2020, according to Mintel.
- Twenty-five percent of Americans want organic water, which wasn't an option before the recent launch of Asarasi, a carbonated water that is filtered through sugar maple trees and is certified organic by the USDA. Asaria CEO Adam North Lazar said the product also can be used as an ingredient by manufacturers making 100% organic products.
- Mintel also cites that more than half of consumers want premium bottled water and are willing to pay more for it. Eighty-three percent of shoppers want water that is enhanced with functional or nutritional benefits, such as herbal mineral waters.
Dive Insight:
The consumer's desire for all things premium and value-added has flooded the bottled water category — along with confusion over specialty label claims. For example, the "vapor distilled" description used on Coca-Cola's SmartWater brand was confusing to 35% of Americans, and the phrase "purified tap water" resonated better with consumers than descriptions such as "iceberg water" or "alkaline infused", according to a study by ZappiStore.
Manufacturers are utilizing these terms to differentiate their brands as sophisticated versions of an ordinary product — a necessary strategy in the hyper-competitive bottled water space. But many consumers are unfamiliar with these terms, and don't have a clear understanding of the value they supposedly bring to products.
Organic, however, is a label that today's health-conscious consumer recognizes immediately. U.S. organic product sales came in at about $47 billion in 2016, a jump of almost $3.7 billion from the previous year, according to the Organic Trade Associations. The global organic food market also is projected to grow at a CAGR of more than 14% from 2016 to 2021, according to a TechSci Research report.
Asarasi water is a byproduct of the syrup making process, and is sourced from sugar maple trees. CEO Adam North Lazar predicts the water will be sold in about 1,500 locations nationwide in the next few months and claims sales are strong in stores where bottles are already sold.
"We have a beautiful base water that can be utilized in a lot of food and beverage. We have tens of millions of gallon under contract right now with maple producers all over the northeast, and we intend to be a quarter of a billion gallons under contract by the end of the year," Lazar told Food Navigator.
It will be interesting to see how consumers and manufacturers react to Asarasi's organic water. If its products perform well, it's fairly certain that other manufacturers will race to enter the organic water game.