‘Water plus’ drinks typically capture the market of consumers seeking a tastier and more varied alternative to plain water, writes Christina Avison, Associate Director – Commercial at Zenith Global. They also provide a healthier alternative to carbonated soft drinks (CSDs).

Water plus products are divided into three main segments: flavoured water, functional water and juicy water. Natural ingredients including fruit juice content are highly valued by adopters of water plus for flavour enhancement and for providing ‘clean’ ingredients.

The water plus market in the UK struggled in 2020, dominated by the impact of the global coronavirus crisis. The restrictions that were put in place to curb the infection rate of the virus that most affected water plus consumption were the closure of the hospitality and leisure channels. Alongside this, the requirement for people to stay local and work from home, where possible, resulted in a drop in impulse shopping.

To a certain extent, demand shifted to take home grocery retail, however, this was not enough to prevent a significant overall volume decline as the number of consumer purchase occasions were restricted. At the same, many also switched to tap water with added flavourings like squash, cordials and juice to replace flavoured still water whilst at home. All of these factors combined contributed to reduce the overall market volume and value.

Volume market headlines

Total water plus consumption declined by 12% to 450 million litres in 2020. This equated to per capita consumption of 6.6 litres, down by 1 litre per person, from 7.6 litres in the previous year.

Flavoured water was the largest segment by volume, with 390 million litres sold, accounting for 87% of total sector volume, up from 86% in 2019. Despite making market share gain, its annual volume fell for the second consecutive year, by nearly 11%, performing ahead of the wider water plus market.

The juicy water segment fell at a rate of 17% to 45 million litres in 2020. This equates to a 10% share of the total water plus market.

Functional water saw its volumes fall back from 16.5 million litres in 2019 to 13.5 million litres in 2020. This meant it had a share of 3% of the total water plus market. With a volume decline of 18%, functional water was the most significant hit sector by the pandemic.

Value worse hit by the pandemic

Looking at value performance, it is juicy water – with its high exposure to convenience and impulse – that suffered the worst in 2020. The value declined by 38%, dropping from £150 million in 2019 to £93 million in 2020.

Functional water faired a little better but was impacted most by both the closure of gyms and the drop in impulse demand, falling by 26% to £34 million in 2020.

Flavoured water held up better due to its higher presence in the retail take home segment and significantly lower price point. A staple of supermarket water aisles, flavoured water overall declined nearly 17% on 2019 to reach £303 million.

Fizz forges ahead

Still water plus volumes slipped last year, meanwhile sparkling water plus also declined but to a lesser extent, increasing market share from 34% to 36%. This was largely driven by new seltzer launches and the rapid adaptability of canned sparkling water plus brands to move towards case pack online sales during the pandemic.

Sparkling water drinks across both plain and plus also appealed to a number of new customers, as consumers who were unable to dine out sought to elevate the at-home dining experience by purchasing more sparkling beverages to accompany their meal.

Juicy water and the soft seltzer trend

The UK juicy water segment is dominated by the leading two brands, Drench Juicy, produced by Britvic, and Volvic Juicy, produced by Danone Waters. Together, these brands command half of the segment in the UK and both are still water brands.

There is still huge space for juicy waters in the market as well as growth potential in the future. Especially of interest is the expanding sparkling juicy water segment with brands like Nichols-owned Feel Good Drinks (which contain 15% real fruit juice), Danone’s Volvic L’mon (25% fruit juice), Britvic’s Aqua Libra, Nestlé Waters’ San Pellegrino Essenza, and Le Joli from AG Barr.

Also making waves are those brands without big corporate backing, like Dash Water, Ugly Water and Dalston’s Seltzers.

These are often referred to as ‘soft seltzers’; beverages that tend to attract a different type of consumer from traditional water plus, providing that ‘cold can’ feeling that sodas provide, but without any sugar or artificial ingredients as found in sugary soft drinks.

This acceleration of healthier water drinks with higher juice content and low- or no-added sugar, largely driven by the UK Soft Drinks Industry Levy, has helped consumers become more familiar with less sweet drinks, and are educating their palettes to a dryer, less-sweet taste.

The challenge in this space is both internal and external perception; are these high-juice, low-sugar products premium sparkling flavoured waters or sparkling juicy waters, soft seltzers, fruitful sparkling waters or adult soft drinks? The category lines are most definitely blurring and consumers and producers alike differ on terminology.

And once you add other things to water, when does it stop being a water drink?

Zenith Global’s UK Water Drinks Reports 2021, covering plain, flavoured, functional and juicy waters are available to purchase from www.zenithglobal.com/market-insights/reports.

Zenith Global’s Water Plus Definitions

Flavoured water

Sweetened with sugar, sweetener or unsweetened with added fruit essence; sparkling and still natural mineral, spring or bottled drinking water with added flavourings.

Functional water

Functional waters have added functional ingredients, such as botanicals, vitamins, minerals, oxygen or others. Functional waters can be still or sparkling and can be flavoured or unflavoured. Such waters are marketed as having a functional positioning.

Juicy water

Defined as water with added juice, juice content ranges from 5% to 25-30%. However, the key attribute is consumer perception of such products as being water plus juice as opposed to a juice drink. These drinks are perceived by consumers to be closer to flavoured waters than juices/nectars.

Water plus

Water plus includes flavoured waters, functional waters and juicy waters as defined above.