Health awareness, the poor quality of tap water in some regions and the recent hot weather have combined to boost sales of bottled water in the UK - a market which still has plenty of growth potential according to market analysts Mintel.
The UK bottled water market has almost tripled (179 per cent growth) in volume over the past four years, with volumes last year topping 2 billion litres compared to just 720 million in 1998. But the market is showing no signs of reaching saturation, with volume set to reach 4 billion litres by 2007.
"Growth in this market has been fuelled by the fact that bottled water can be bought almost everywhere now as well as the rising obsession with health in the UK and the daily requirement of two litres of water. People's poor opinions of tap water in certain areas and heat waves also help boost the market," said Jenny Catlin, market analyst at Mintel.
Despite intense pricing activity, high volume sales have meant that the value of the bottled water market has increased from just £360 million in 1998 to a massive £847 million (€1.2bn) in 2002. Furthermore, Mintel estimates that the value will rise to £955 million this year.
Bottled water was also the only soft drinks sector that did not see a slow down in growth between 2000 and 2002, according to Mintel.
The bottled water market is helped by the fact that its consumer base is far more widespread than other soft drinks, which are primarily consumed by young people. Adult are becoming increasingly likely to drink bottled water rather than a carbonated soft drink, with Mintel's research shows that just under half of British adults have drunk bottled water, compared to less than one in every three adults in 1998.
Bottled water is more popular with women than it is with men, as nearly half of all adult women in the UK drink it, compared with two in five men. Furthermore, women are twice as likely as men to drink bottled water more than once a day. Men, on the other hand, are more likely to drink bottled water between once a day and once a week, with two in five doing just that.
But if adults are drinking ever increasing quantities of bottled water, the majority of drinkers are still relatively young. After the age of 55, according to Mintel, the number of people drinking bottled water falls from over half to just two in five - although those aged 65 and over are more likely to drink bottled water more than once a day than any other age group.
Just 15 per cent of the 15-19 year olds drink bottled water more than once a day, compared to more than one in five adults aged 65 years.
There is also a distinct geographical divide, according to Mintel's research, with those adults living in the greater London area the most likely to drink bottled water, with three in every five Londoners doing so. On average, four in ten people all over the rest of the UK drink bottled water, ranging from 47 per cent in the south west down to 37 per cent in Yorkshire & Humberside.Furthermore, Londoners are far more likely than those elsewhere in the country to drink bottled water more than once a day. In London, one in four adults drink bottled water more than once a day while in Wales the figure is 13 percent and in the north east its is just over one in ten.
With over half (53 per cent ) of British adults concerned about the quality of their tap water, it is perhaps not surprising that bottled water sales continue to grow. Mintel's research shows that among bottled water drinkers, this figure rises to three in five adults, despite drinking tap water having to go through the same stringent quality tests as bottled water.
"Those living in London seem most worried about tap water quality. Broadly speaking the further north you go the less concerned people are about the tap water," said Catlin.
Nonetheless, the number of people who feel that their tap water is perfectly adequate has risen some 9 percentage points since 1998, while the number of those that buy bottled water because the tap water in their area is poor has remained static over the same period.
"This would suggest that the decision to drink bottled water is growing largely independent of tap water quality," she added.
Still water leads the way
Still water is by far the most popular variant in the UK, accounting for almost three quarters of all bottled water volume with 1.7 billion litres expected to be bought this year, up from 1 billion last year. Year-on-year growth is increasing, and Mintel estimates that there will be an increase of more than 80 per cent in volume sales of still water between 2002 and 2003.
Value sales are also growing at an ever faster rate, with the market expected to be worth some €1.1 billion in 2003.
The market for sparkling water is also growing each year, although the rate of growth is declining. Sparkling water accounts for just around a quarter of the bottled water market in the UK, with some 595 million litres expected to be sold this year.
Flavoured water is yet to take off, the report shows, with just one in five people drinking it on a regular basis. However, it is widely believed that the flavoured water market could hold the key to persuading more people to drink more water, bridging the gap between carbonates and water.
And there is certainly a need to persuade more people to drink more water: although the picture is improving, health experts believe that 70 per cent of UK consumers do not drink enough water, be it bottled or tap, and British consumption levels are far lower than those of in other European countries.
For details of how to buy Mintel's Bottled Water report, click here.