Functional water saw its volumes fall back from 16.5 million litres in 2019 to 13.5 million litres in 2020, according to Zenith Global's 2021 UK Water Plus Report. This 18% volume decline was the result of the pandemic – the category suffered as sales often rely on away-from-home channels (such as gyms or on-the-go occasions).
And yet the category is now expected to rebound (assuming, of course, that further UK lockdowns are avoided) with the category forecast to increase by 26.7% over the period 2021-2025. This would take volumes up to 17.1 million litres – taking the volume back up and over 2019 figures.
Functional waters are essentially those with added functional ingredients: such as botanicals, vitamins, minerals or oxygen. Functional waters can be still or sparkling and can be flavoured or unflavoured - their point in common is they are marketed as having a functional positioning.
Functional waters took one of the bigger hits in the UK in 2020: and yet, at the same time, could also see one of the bigger rebounds as consumers think increasingly about health post-pandemic.
“Functional water relies on sales away from home, especially in places like gyms for protein water," explained Robin Bell, Senior Consultant, Zenith Global. "As gyms and sports centres were mostly closed down in 2020, functional water sales were severely hampered.
"In addition to that, impulse-buy locations, important for the water plus category [functional, flavoured and juicy waters], had much lower footfall during the pandemic if they managed to stay open.
“However, functionality is likely to drive consumer interest in the years following the pandemic as consumers seek ways of sustaining their health and general wellbeing through functional ingredients.”
In a similar way, functional and other 'water plus' drinks saw a slowdown in innovation and new product launches in 2020, but could now see a flourish in innovation as their market opens up again.
“2020 was understandably a quieter year for brand extensions and new variant launches, but 2021 is anticipated to see a surge in innovations as R&D teams used the quieter periods of 2020 to focus efforts on future planning and product formulations," said Bell.
“Innovation could come especially from start-ups who are looking to break into the market, bringing exciting flavours and added functionality that are highly-prized such as fatigue relief, immunity boost, and mental stability and alertness.”
Top UK functional waters
- Coca-Cola Europacific Partners owns the leading brand in the UK functional water segment, Glacéau vitaminwater: which took nearly 30% of the market in 2020. It also introduced flavoured Glacéau smartwater in 2017.
- The second brand in volume terms is Get More Vits. It has a number of variants across the brand: and in February 2020, the company launched a grapefruit flavoured Vitamin B12 product to tackle tiredness and fatigue.
- Upbeat Protein Water from Upbeat Brands takes the third spot: which its product that contains lactose free vegetarian whey protein to replenish the body after exercise. It is expected to grow in 2021 and beyond, as a significant market for protein waters is in the out of home segment, especially in gyms and leisure centres which were closed for much of 2020 and, when open, not taking new stock.
Post-pandemic consumer trends
The market in 2021 and beyond, however, may not be exactly the same as 2019. Post-pandemic consumers may not behave in the same way – while macro trends will also affect the category moving forward.
“With the likelihood that British consumers will remain more home-centric than pre-pandemic, water plus companies must do more to make water plus products available to consumers, especially through home delivery availability," said Bell.
“To differentiate brands in an increasingly crowded space, brands may do well to emphasise the environmental credentials of their products and packaging and the added health benefits of functional products.”
The question of highlighting environmental credentials is likely to be particularly important, given that functional waters have predominantly been packaged in plastic PET bottles to date (although a number of brands are now turning to cans).
Given the backlash around plastic bottles, this is something the category will need to think about moving forward.
For example, Danone launched its Evian+ range earlier this year in cans: a flavoured water enriched with magnesium and zinc.
Meanwhile, other brands have looked at how they can become more sustainable in other ways: Danone’s Volvic brand, for example, has switched to 100% renewable energy.
The sweet spot
Sugar content remains a key consumer for UK consumers – as well as for manufacturers, given the 2018 introduction of the UK’s sugar tax. This will continue to be a factor for functional waters and the wider water plus category.
“In addition to innovative flavours and combinations, variants without added sugar or artificial sweeteners are likely to be popular with the consumer due to the increasing concern over sugar intake and calories,” said Bell.
“As has been the case for several years now, low sugar, reduced sugar and sugar-free claims will become increasingly prevalent.
“Many manufacturers are moving towards completely sugar-free options in order to cater to this demand from consumers. However, they face a dilemma whether to eliminate sugar altogether or find a natural solution to sweetness such as natural flavours or natural sweeteners.”