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Premium water tipped as a ‘sparkling opportunity’

By Guy Montague-Jones , 29-Mar-2011

Zenith International has identified premium bottled water as a ‘sparkling opportunity’ despite poor growth rates over the past couple of years.

In its first ever report on premium water, the drinks market researcher admitted that growth in premium water had slowed in recent years because of economic pressures and environmental concerns.

Defining premium bottled water by price and positioning, Zenith said global sales rose from 9.4 billion litres in 2009 to 9.5 billion litres last year.

Growth prospects

But sales growth is now expected to return with the recovery of the global economy and the work being done by the big companies to green their image.

“The best companies have improved their environmental credentials and the newly emerging middle classes in young economies with strong growth should provide renewed impetus for premium waters around the world,” said Zenith analyst Karen Wells.

Currently Zenith estimates that the premium segment of the bottled water market represents about 6.3 per cent of total sales.

The segment covers a broad range of products from Evian water to a bottle of Bling, which retails for as much as $75 in the US.

Value in premium

Bottled water can be a low margin, price sensitive business so going premium offers the possibility of adding value and building a loyal following.

According to Wells, “Adding a premium through a unique story, great design, powerful branding and communication that builds consumer loyalty can make all the difference to the success of a business.”

Zenith identified Germany, the US and China as key markets for premium water. China is one of the fastest growing premium markets with a mix of local and imported brands while the US and Germany are more established, lead markets.