Icelandic Glacial enters China’s premium bottled water segment
China was the largest bottled water market in the world in 2015 with $16.4bn in retail sales, and consumption is on the rise largely due to higher income levels and growing awareness of bottled water’s health benefits, according to Mintel’s Bottled Water China 2016 report.
Golden Field, which owns over 40,000 offline outlets, plans to first introduce the brand to high-end channels in China including high-end retailers, restaurants, and nightclubs. It will then expand distribution to convenience stores.
Icelandic Glacial will also be sold in BHG Stores and Costa Coffee through a partnership with Beijing Hualian Group. The company will have four of its products available in China including its still water in 330ml still PET, 500ml PET, and 1.5L PET, and sparkling water in a 750ml glass bottle.
Icelandic Glacial
A super-premium natural spring water, bottled at source from Iceland’s Ölfus Spring, which was formed 5,000 years ago and is shielded by a barrier of lava rock. It has a naturally low mineral content and alkaline pH of 8.4.
Icelandic Glacial is the 'world’s first certified carbon neutral natural spring bottled water for product and operation', and uses 100% natural green energy to fuel production.
“This strategic partnership has been in the works for a year as we sought out the best partner to get our water to China,” chairman and co-founder of Icelandic Glacial, Jon Olafsson, said.
China seeks premium and luxury water
Icelandic Glacial will play in China’s strong premium bottled water sector where seven in 10 consumers believe high quality water source is the most prominent association with premium bottled water, according to Mintel.
Premiumization is a strong trend among Chinese consumers who “love the idea of anything luxury” especially ultra-premium bottled water brands from international companies, Lei Li, drinks analyst at Mintel China, said.
“As pollution worsens and incomes rise, consumers have a growing demand for bottled water and are likely to keep trading up,” Li said.
“Naturally, companies and brands in the bottled water industry, especially in the high-end sector, want to know how to attract consumers for premium consumption.”
The next step for premium bottled water will be continued package innovation and water from “pure water sources,” Li added.
Competitiveness of premium bottled water market
Sales of international premium water brands have declined since China’s anti-extravagance campaign implemented in 2012, according to Li. In addition, China imposed new bottled water regulations that brands must abandon “dazzling names” and must reference drinking water “with true and scientific names,” Li said.
“Implementation has shaken the premium bottled water market and, subsequently, is responsible for impacting competitiveness and even pushing a few brands out of the premium market.”
Icelandic Glacial said that it is in compliance with the regulations in China where it will not market itself as a luxury product; but rather focus on Chinese consumers' craving for a new, premium water experience, drawing on the pureness of Iceland and its water.
"Icelandic Glacial will not be positioned as a luxury good, but rather, a premium, high-quality water for the masses similar to other premium water brands who already have a presence in China. We have been approved for sale and are in compliance with the regulations implemented,” Icelandic Glacial chairman and co-founder, Jon Olafsson, told BeverageDaily.
