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TURN OFF THE TAPS

If water choke thee, what wilt thou drink to wash it down?' asked Aristotle, circa 350BC in his Nicomachean Ethics. In the UK, bottled water seems to be the obvious answer, despite the fact that tap water now undergoes several processes to bring it up to the stringent quality standards set out in the Water Supply Regulations. According to Danone's Bottled Water Report 2002, bottled water is the main driver of soft drink growth. What's more, it is the fourth largest impulse' soft drink category - bigger than lemonade - with volume up 13.4% in 2001 in a total impulse' soft drinks market that was down 4.9%. Overall, Evian and Volvic are among the UK's leading soft drink brands, ranked 18th and 19th respectively (AC Nielsen). Moreover, Volvic is the UK's second fastest-growing soft drink brand (sales were up 42% on 2000), with Evian ranked eighth (up 12% on 2000). The beneficial properties of mineral and spring water, recognised centuries ago, have been rediscovered' in recent years by health-conscious consumers. But bottled water's meteoric rise is probably also related to the growing fashion' of wine and wine alternatives with a meal, particularly when dining out. And there's no question that the marketing gurus have conjured up an image of bottled water that is hard to beat. Stylish bottles featuring imagery of snowy mountain springs paint a compelling picture of natural beauty, healthy living and environmental purity (never mind that those same bottles contribute to the vast mountain of rubbish produced every year). Consumption of bottled water in the UK has grown by nearly 200 million litres a year, to 1.6 billion litres last year, with retail sales worth 900 million, according to this year's Well, Well, Well report on UK bottled water. That figure is expected to pass 1 billion in 2002 - and the room for further growth in the UK is considerable, considering Britons drink just 23 litres a year per capita compared with the French (139 litres) and the Italians (183 litres). And while we might not have the same dehydrating' climate enjoyed in southern Europe, the European average of 93 litres seems easily within reach. Some 20% of UK bottled water drinkers consume 74% of volume and only two-thirds of households buy regularly. There is also huge lunch time potential, as the foreword to the Danone report points out: As long as we still find sandwich bars without a bottle of water, the consumer does not have the choice of a healthy alternative'. Meanwhile, the Natural Mineral Water Information Service reveals that only one Briton in ten drinks as much water as health experts recommend to stay hydrated, despite the fact that half of us know we should drink eight glasses or more a day.

Water, water everywhere There are three types of bottled water: spring water (accounting for 82% of bottled water consumed in the UK), mineral water (13%) and table water (5%), each of which is further divided into sparkling and still. Sales of still water are up 18.3% year-on-year in volume, to 990 million litres. This represents over 497 million in sales (Danone), accounting for 64% of total bottled water clearances. Danone Waters has three of the top four still brands under its umbrella: Evian is top, with 17.9% volume share and 24.8% value share; Volvic is second, with 8.9% by volume and 11.9% by value; and Danone Activ' is fourth, with 4.9% volume share and 5.7% by value. In 2001, the group spent 27 million on the brands, which contributed 63% of last year's total category growth. This summer, for the first time, Evian is featuring a celebrity on its back labels, with Kylie Minogue (who claims she drinks at least two litres of Evian a day) having signed up to a high visibility endorsement deal following Evian's sponsorship of her recent Fever Tour. The pint-sized pop star is appearing on the back of ten million 1.5 litre bottles during the summer, traditionally the busiest time of the year for bottled water. Volvic, with a 9 million marketing spend this year, is launching a high tech commercial animated by Framestore, the team responsible for the BBC series Walking With Dinosaurs. The ad features a caveman in a suitably volcanic setting' who throws a rock at a sleeping Tyrannosaurus Rex. He is almost caught by the dinosaur, but outlasts it by swigging on his Volvic. Marketing director David Graham said: Since prehistoric times, man has known of the need to drink the right amount of water every day to stay at physical and mental performance. Volvic, with its volcanic minerals, has always been the ideal water for active people.' For this reason, no doubt, the brand has also teamed up with European 200 metres sprint champion Darren Campbell, whose tips on keeping hydrated are appearing on multipacks of Volvic in an on-pack promotion called Raise Your Game. Following last year's successful launch of Danone Activ', which contains added calcium, the brand has launched a new television advertisement campaign to support its new range of flavoured waters, launched in May. Part of a massive 6 million investment for the brand, the new Skelton family' campaign is focused on raising brand awareness further throughout the UK. At Highland Spring, marketing manager Suzanne Casey warns that the French brands should look out for a tartan-clad rival. Highland Spring is vying for the number two spot in the total market, getting closer to Volvic in value share,' she says. The brand has grown by over 50% in the past two years, and now has a 5.5% share of the still water market by volume (6.5% by value). Generally, Casey says consumers look for premium brands which they instantly know and trust. It makes sense to stock the market leaders and avoid confusing customers by overcrowding the fixture with lots of lesser-known brands,' she says. According to the Danone report, 78% of bottled water purchases at multiple grocers are pre-planned and 55% of shoppers simply trade down in price if they cannot find the product they want. When it comes to sparkling water, Casey states that Highland Spring's new 1.5 litre sparkling four-pack has taken the market by storm', capturing 40% of the sparkling multipack market in the first ten months of its launch, and putting the fizz back' into what is generally regarded as a declining sector. But the fact remains that sales of sparkling water are down 3.1% to 280 million litres, with a market volume share of 18%, worth 140 million (Danone).

Premiere and premium brands Perrier may no longer be synonymous with sparkling water but, with its instantly recognisable name, bottle and packaging, it still has the highest share of the UK sparkling market by value, with 11% (Danone/AC Nielsen). The brand has always been associated with fun', hence its continued association with the Perrier Pick of the Fringe Awards at the Edinburgh Festival. Portabubble' is the theme for Perrier's advertising in 2002, which has seen 50 double-decker buses driving around London with mammoth Portabubble Rears, to give a strong message to 20 to 35-year-olds who are constantly on the move' and who expect' to pick up a bottle of Perrier wherever they are. An incredible 92% of sparkling water retail sales now come entirely from multiple grocers, with just 5% from the impulse or convenience channels (Danone/AC Nielsen). Perhaps not surprisingly, on that basis, own-label brands have a 68.3% volume share and a 46.8% value share of the sparkling market. Consumers are, however, increasingly turning to premium one-litre brands, such as San Pellegrino (up 58%). San Pellegrino is very much regarded as an iconic brand and has become synonymous with all things style-related,' explains Mondial Wines' spokesperson, Rebecca Hughes, who claims that the water is extremely highly regarded by those in the know. Indeed, it could be said that many buy the water for the bottle alone, backing up the idea that consumers are very much affected by the design and image of water brands when making a choice.'

Youth and the style factor So how important is the bottle? Matthew Clark, for one, is setting out to totally re-invent' its Strathmore brand, the leading bottled water in the on-trade (17.5% of sales) and the top-selling flavoured water in the off-trade. This is not just a relaunch; we have totally re-invented the brand,' stresses Strathmore's marketing manager, Simon Messent. One key addition to the range is a 750ml glass bottle for the hotel and restaurant trade. Focus groups resoundingly perceived green glass as outdated and wanted a much more stylish, contemporary Scottish brand,' says Messent. Strathmore has also launched a 500ml sports cap, recognising that the sports bottle market has enjoyed huge growth, as consumers increasingly buy water to drink on the go. As Highland Spring's Casey explains: Sales of sports bottles were less than one million litres five years ago; in 2001 the sports cap category reached an estimated 65 million litres, up from 49 million litres in 2000.' The impulse market has also prompted Highland Spring to introduce new vending machines, offering a choice of three chilled 500ml formats - still, sparkling and sports cap bottles. Refreshment is the largest-growing sector in the vending market and there has been huge growth in bottled water sales, as young people grow up in a vending culture expecting more choice,' says Casey. Speaking of young people, Highland Spring last year launched Looney Tunes Water, the UK's first bottled water for children. It is targeted at primary school kids, as a fun and healthy alternative,' says Casey. One year on from its launch last June, it has achieved over 1 million sales in the major multiples alone.' For its part, Perrier last year introduced a 50cl PET bottle, which it claims is less formal' and has made carrying a bottle of bubbles cool'. Certainly, in the year to December 2001, sales of Perrier through multiple grocers increased in volume by 28% (AC Nielsen). In February, Welsh natural mineral water Ty Nant, famed for its cobalt blue glass bottle, launched an asymmetrical PET bottle, designed by Ross Lovegrove, to evoke the fluidity of water'. The move was aimed at taking Ty Nant into stylish on-premise outlets, the impulse sector, sandwich bars and leading grocery outlets. We wanted to capitalise on the demand for still water and appeal to a younger, stylish audience,' explains general manager, sales and marketing, David Relph. He feels sales figures for the summer will reflect Ty Nant's increased visibility as the official water supplier at some of the UK's biggest - and coolest' - music festivals and concerts. Spadel UK, meanwhile, has also launched two impulse format' bottles for Spa natural mineral water, the blue plastic 33cl and 50cl still products. The brand is also sponsoring Hamish Gordon in the factory-assisted Elf Renault Clio car throughout the 2002 British Touring Car Championship season, which Spadel UK's general manager, Ian Hall, says places the brand in pole position to capitalise on bottled water's key selling period'.

Adult flavoured With sales of 260 million litres, worth over 144 million, flavoured water accounted for one fifth of incremental bottled water growth last year and is expected to exceed 398 million litres by 2005. Caledonian Clear revolutionised the soft drinks sector when it was launched in 1993, by being the first to target the premium end of the adult soft drinks market,' says Karen Salters, SHS Group beverage brands marketing manager. The brand is packaged in 330ml conical glass bottles with a distinctive blue and green tartan logo, designed to re-inforce its premium personality and Scottish heritage. This year, it has also tied up with The Barclay's Scottish Open at Loch Lomond for activity across the trade. Salters says flavoured water is aimed at people on the move who like to grab and go' and want a quality soft drink as part of a healthier lifestyle. Consumers don't always want a bottle of plain water - they want variety, a treat. It's been interesting to see leading brands cashing in on the demand for flavoured waters and I think that this trend will continue.' Strathmore, for one, is launching three flavoured but low-calorie still waters, in cranberry and raspberry, mango and guava and forest fruits, in 500ml, 750ml sports cap and 1.5-litre PET bottles. Meanwhile, Strathmore has retained its range of five sparkling flavours in 330ml glass, plus 500ml and 1.5 litre PET bottles. Messant claims the 330ml size represents a massive opportunity' for the on-trade, which is currently missing out' on flavoured water. On-licences need to reflect the range that is available - and incredibly successful - in grocery and impulse,' he says.

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