Noting where things are at the start of the year, it’s not surprising to me at all that I’m writing this in Watertown. At this point, it feels like it could be Water Country.
You can’t keep bottled water bottled up. It’s risen from pennies-per-unit commodity pricing on the floor of grocery stores a decade ago to comprise the bulk of the growth in the beverage business last year, according to analysis from Euromonitor International. According to IRI, it’s a $16 billion category.
Combined with the rise of energy drinks – which offer a higher-boost alternative – and the growth of a smaller set of newly commercialized products like kombucha and cold brew, it’s the growth of premium and specialized water brands over the past few years that has knocked soda off its pedestal and into its current decline. In 2016, bottled water consumption passed soda, and it was bottled, premium priced PET that did it more than the cheapest commodity waters, according to the Beverage Marketing Corporation.
Now, we’re in a moment when the growth of exciting brands that spur consumer imagination and create subcategories all their own is driving the fastest growth. It’s coming out of subcategories that just weren’t apparent a decade ago. There’s the high-end set of brands like Fiji, Evian, and now Voss, Icelandic Glacial, Eternal Water, Volvic, and others, as well as the functional group of Smartwater, Core, Life Water, Essentia, Aquahydrate, and more, each altered just enough to offer a marketing edge around electrolytes, production method, or alkalinity.
On the bubbly side, even as Sparkling Ice has cooled off, insurgent brands like LaCroix, Polar, Topo Chico, and even Perrier are through the roof, with high-end alternatives like Hint Fizz, Spindrift and Waterloo on the way up.
The recent announcement that Nestle Waters North America was upscaling some of its product packaging for improved DSD performance on its regional brands is indicative of how much meat these already dominant companies believe is still on the category bone. Why should LaCroix sell better than Zephyrhills or Poland Spring, goes the thinking. Certainly, the flavored success of distributor driven brands like Hal’s (Big Geyser) and Polar make the argument that there’s plenty to be gained from a little bit of creativity.
But creativity is coming in bigger leaps, as well: water brands with extra hydrogen, like those from Nick Perricone and H-Factor. Kona Deep sells water from underneath the Pacific Ocean. So-called “raw water” is being bottled and upcharged from underground aquifers. On the packaging side – once considered the only edge for bottled water branding – environmental statements like Boxed Water and Just Water have reversed the argument that bottled water packaging is a waste of resources.
There’s been plenty of bottled water backlash in the past. It brought out competitive packages that were designed to cut the bottle out of the equation: the Hydroflask, the S’Well, Contigo, Bkr. They’ve had the added benefit of increasing overall water consumption by reinforcing the notion that water is as much a necessary accessory as a briefcase. Don’t have your S’Well? Get a Kona. Perhaps the most telling indicator that bottled water was bouncing back was the Sigg. Remember when that “permanent” replacement for your Smartwater was revealed to be a source of BPA? People went right back to buying disposables.
All of this is great, until you think about some of the major water crises taking place around the world and even at home. You think about the fact that Cape Town, South Africa is in the midst of such an extreme drought that it has its own deadline for when water will be shut off. You think about the pipes in Flint, Mich., where lead flowed into household taps. You think about the mudslides that followed the drought in Santa Barbara, Calif. killing at least 20.
Then, you think about the enormous capabilities that potable water access creates for communities. You think about the brands that are founded for just this purpose, the Charity: Water and Give Water and Purpose Water products that have tried to do good as we have arced toward this moment when our greatest shared resource is bottled and sold millions of times a day. And you wonder: with this kind of commerce, what would be the effect of a simple, across the board, one-cent per bottle transaction tax? What about making it global in “civilized” countries? What about a fund, geared toward eliminating water-based disasters? We consumed more than 13 billion gallons of bottled water last year in the U.S. There are about seven 16 oz. bottles of water in every gallon. That’s more than $900 million toward that fund from the U.S. water industry alone, and if you levy it equally, it won’t have competitive impact. If you’re worried about water losing ground against other beverages, you shouldn’t: the health halo around water is such that recycling, environmental arguments, BPA, and the Thermos haven’t been able to derail it.
Crazy, I know. But it’s also crazy that we’ve built a massive business out of reselling something that falls out of the sky. It’s nice work, if you can get it, and if you’re so fortunate, maybe it’s crazy not to share that good fortune while you can. After all, water ebbs and flows, just like fortunes.