Better-For-You Movement Leads To Record-High US Bottled Water Sales In 2015

CHICAGO -- As Americans look for healthy, better-for-you alternatives to carbonated soft drinks, the U.S. bottled water category is reaching unprecedented heights. New research from Mintel found that sales of bottled water increased 6.4% to top $15 billion in 2015.

The research firm expects sales to continue ascending at a rapid pace through 2020, with projected sales growth of 34.7% for the category, including 75.1% growth for the combined sparkling, mineral water and seltzer segment.

Innovation in flavor is driving the category's success, with half (48%) of bottled water drinkers saying they are drinking more flavored waters to replace high-sugar drinks. Consumption of flavored still bottled water is highest among 18- to 34-year-old consumers (66% versus 48% of consumers overall), who are also the most likely age demographic to consume any still bottled water (93% vs 85% of consumers overall).

There is also a wide range of interest in functional attributes for bottled water, Mintel reports. Forty-three percent of consumers are interested in bottled water enhanced with vitamins; 29% agree the ideal bottled water should contain minerals and energy. When it comes to calorie counting, consumers show a clear preference for zero0calorie bottled water (31%) as opposed to less than 100 calorie offerings (13%).

Forty-three percent of consumers say the ideal bottled water would have no artificial sweeteners or artificial flavors and 40% say it would have no artificial colors. One quarter of consumers say their ideal bottled water would be GMO-free or organic.

"Bottled water brands benefit from the overarching consumer trend toward more healthful, better-for-you alternatives to unnatural and high-sugar drinks. This has spurred sales growth of bottled water with even greater projected growth over the next five years," said Mintel beverage analyst Elizabeth Sisel. "In the coming years, consumers will likely put even greater value on no artificial ingredients in bottled water. To capitalize on this trend, brands should emphasize free-from claims on packaging as they release new flavors and functions in order to engage the market's most active consumers."

While consumers indicate that the overall top purchasing factor is price (62%), the majority of consumers are interested in premium offerings: over half (53%) of bottled water drinkers prefer to drink premium bottled waters. And 39% agree bottled water is worth the added cost.

Despite major category growth and widespread interest in premium and functional bottled water offerings, environmental concerns are top of mind for consumers. Two in five (39%) bottled water drinkers agree that they are drinking less bottled water because of its environmental impact.

Mintel research also indicates that 78% of U.S. bottled water drinkers recycle their bottled water packaging. And despite the availability of reusable and biodegradable water bottle packaging, 75% of consumers wish more bottled water packaging was reusable.