The industry of extracting, processing, and selling packaged water will double its size before the end of this decade. Purchasing power, sustainability, and a categories-blending trend challenge producers towards the future. Impressions about the Global Water Drinks Congress.

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In business -like social media- what leads trends' tipping point can resonate exponentially from multiple voices until cacophony. Lately, you must hear the words 'Artificial Intelligence,' 'Plant-Based,' 'Cryptocurrencies,' 'NFTs,' or 'Nearshoring' on every screen, casual conversation, or newscast.

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But what about those businesses that have been there forever? Selling bottled water has been part of consumption since the 17th century. Today, with more than 3,300 brands, achieves a world market size valued at 287 billion dollars, expecting to reach 600 billion by 2030, according to Precedence Research.

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During 2021, bottled water's global consumption reached 455.2 billion liters, much more than any other liquid presented under the same format, according to Statista. Alcoholic beverages totaled 260,600 million liters, milk, and other dairy products 245,300, and carbonated soft drinks 222,500.

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Bottled water, for some, may not be the first thing that comes to mind when you think of a profitable endeavor. However, according to Water World, category profits are quite considerable, ranging between 50% and 200%.

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A growing-trend FMCG category: during 2021 just in the United States, each person drank an average of 171 liters of bottled water, according to the Beverage Marketing Corporation, causing a 'stomach share' jump from 14% in 2009 to 23% in 2021, followed by carbonated soft drinks, with 18%.

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Last decade's growth is attributed to 1) more consumers looking for health and well-being, 2) fear of disease for drinking water that could be considered 'contaminated' according to each city and its drinking water system, and 3) an innovation boost seeking to update the category.

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And thanks to a European business trip last November, I rearranged dates to visit the Global Water Drinks Congress in Évian-Les-Bains. This event gathers bottled water industry leaders and related businesses to understand the current and future moment of the category.

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As always, the conversation with different executives and entrepreneurs helped me define for this article five challenges that the industry presents for the coming years, indirectly influencing the evolution of most non-alcoholic beverages, taking into account the weight of bottled water across non-alcoholic ready-to-drinks.

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Prinz Pinakatt - https://www.danone.com/

Challenge: Functionality + Access

For the SVP of the water business of the iconic French FMCG, including brands like Evian, the bottled water category must move simultaneously within two directions: one based on sophistication for affluent segments while guaranteeing broad access for developing markets. "The vast majority of the world population accesses hydration solely through water; in Indonesia, for example, we provide water for around half of the population through our local brand."

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Consequently, the more advanced the country and its consumers, the more the bottled waters (and products quenching thirst and refresh) will become more sophisticated. At the same time, in developing markets, they move towards product portfolios where basic solutions predominate.

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For Pinakatt, a good part of this sophistication comes from a post-pandemic awareness "People know more, and are more aware of what they need to be healthy. It's a growing trend driven by the last three years, meaning that we have consumers with a higher level of sophistication around the importance of being well hydrated… minerals in water, how many minerals they need..."

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However, this reality has different facets "on the one hand, we see markets like Europe where purity and naturalness determine water quality and benefits, while in the United States, consumers are more willing to try  natural or artificial ingredients to fulfill more benefits or China where artificial functionalities for water are accepted as long has scientific proof."

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In a long-term view, sustainability and customization will normalize across the category "on one hand, we must guarantee that water reaches all segments and populations; in our case, Évian reach BCorp and Carbon Neutral, increasing sustainable initiatives for water conservation, and on the other, we continue creating products for more specific moments and needs."

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Miguel Angel Flores - https://www.danone.com/

Challenge: Massive and Sustainable Packaging.

For the General Director in Mexico of one of the leading private-label water brands in North America, there must be an industry focus in the future based on a constant improvement of those packages that reach most consumers.

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According to Reuters, humans can use a million plastic bottles every minute, reaching almost 500 billion annually, an alarming problem that begins to glimpse changes "in the Mexican case. In particular, six out of ten plastic bottles are recycled nowadays, in fact, the country curiously has a very high percentage of recyclability for PET."

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And aspiring to replace one material with another completely does not seem like an option, according to sustainability experts. Each material has advantages and disadvantages; for example, weight is an issue for glass bottles, ingredient extraction for aluminum cans, and recyclability for plastic bottles.

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In a career for improvement across competitors, "The amount of research and technological development that we have put into the way we build our packaging strategy are based on ensuring to have the most modern system in terms of water use."

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The future comes with a tapestry of solutions, including plastic-based companies migrating to ultralight packaging, either for state pressure or consumer requirement. "We always seek to be the lightest bottle in the market with new efficiencies that improve sustainability, such as self-generating electricity and having all the certifications, our plants in Mexico, for example, are Zero Waste, and by 2023 they will be 100% Clean Energy."

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Roy Ananda - https://www.iriworldwide.com/

Challenge: Categories Blending.

According to the SVP for CPG business of this global market research firm, there's an increase in different types of bottled beverages that are using the benefits of 'cousin-categories' to gain market… "one of the big trends that we are seeing again is 'smart' products giving multiple benefits, and for which consumers are willing to pay more because satisfies multiple needs."

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According to IRI's research consumers, especially Millennials and Centennials, are more inclined toward functionality "Why should I have an energy drink just for energy? I can have an energy drink for energy with certain nutritional elements, probiotics, isotonics, and electrolytes in an environmentally friendly container."

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All this explosion of 'mixed' products realized a never-ending corporate truth: there's a difference between how innovations are conceived in conference rooms versus people's real perception, "Consumers don't see the difference between water as a drink and hydration as a concept. I don't think consumers think about these things that much. What they know are the benefits they seek and see."

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For Ananda, this trend will increase its relevance. Over time, it will 'leap' towards non-liquid formats, including powders, capsules, or gels widely seen in developed markets today, "consumers are the real innovators. Always looking for new ways to adapt a product, and the fact that water can now be consumed in different ways expresses the progressiveness of new lifestyles."

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Jesus Núñez - https://solandecabras.es/

Challenge: 'Natural – Purified' Differentiation

For the General Director of Mahou-San Miguel water business including brands like Solán De Cabras, it's essential to establish the perceived value and differentials between bottled waters that come from nature itself and those that are purified from pipes, understanding that technologies for this have also improved.

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"Not all waters are the same. Each country has its own natural mineral water sources, which although many of us know is not the same as purified water, public opinion has mixed feelings thinking that we affect the planet, when natural mineral water is a miracle of nature."

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On the other hand, natural waters sustainability standards must be more demanding and relevant for the public, "in our case, 100% of plastic we use is recycled, knowing that costs twice as much as new plastics, we have a much of our containers in glass and we are about to install refillable for restaurants."

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This differentiation should also teach consumers about the protection and continuity of the business "from the source, we only bottle 2% of its capacity, we do not extract from the earth -it falls by gravity-, and we protect the forest that surrounds our sources, to guarantee that it is sustainable."

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Horacio Vasquez - https://www.awasolar.com/

Challenge: Production from limited resources.

The founder of this Chilean venture produces ten thousand liters of water per month through panels that capture water in the air in a canned package to reaffirm its commitment as a sustainable company,

"We want to offer the market new ways of generating water, avoiding impacting the evident global growth in water scarcity. In our case, the source to obtain is the air, providing a solution for the future."

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This reality, frequent for places with difficult access to water sources and emerging because of climate change, increases similar initiatives in places like Israel, where technologies around reuse and desalination are also beginning to establish solutions for consumers.

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According to the UN, by 2030 the decrease in freshwater resources will reach 40%, that with a growing population, could lead to a global water crisis... "This sense of urgency, where we can reach a difficult moment for humanity in a decade, will make us see more and more divergent innovations around obtaining water. It's the change agenda."

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It seems that the future will depend on expanding access. The more people buy drinking water, the business of selling it can grow. The more governmental legislations and initiatives / corporate innovations influenced by sustainability, the more it will be possible to protect the source. If consumers improve their recycling habits, circularity may be real.

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And, of course, we cannot ignore that part of this balance will be guaranteed by innovations that expand access to purifying water (such as https://www.brita.com/ or https://drinkcirkul.com/ in the United States).

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Remember... If the beauty of any business lies in keeping it current and prosperous over time, it's mandatory to take better care of water.

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