The bottled water market has been in strong growth over the past five years, 2007 aside, but there is still significant room for growth, with the per capita consumption of bottled water in the UK still lagging significantly behind other countries (approximately half of the consumption of bottled water in the US, for example), so there is still a massive opportunity for the UK.

Making the most of the category

There are three key areas where vendors can really make a difference to the profits from their bottled water display.

• 1) Simply by focusing on the availability of water brands, especially during the hot summer months, vending operators will notice a significant difference in their sales.
• 2) The second area to focus on is to stock the best selling brands and to support the key campaigns, such as Evian Detox or Volvic 1 for 10.
• 3) Finally - from research that Danone Waters has conducted, we know that clear and engaging communication (signage) delivers further incremental benefit of up to 4 per cent for bottled Water.

Liz Forte, Shopper Marketing Manager at Danone Waters explains: "Vending operators need to be aware that bottled water is now seen as a soft drink and a drink of choice, and so it needs to be given the space that it deserves. Brand names are increasingly becoming a factor in the consumers' decision making process, so stocking the best selling brands is imperative."

Trends in the UK

Continuing trends within the UK bottled water category:

• Health/functionality: bottled water is viewed very much as a soft drink by consumers, driven by the health trend. As water is sited alongside sugary fizzy drinks, Danone Waters has introduced the SportsCap format of both Evian and Volvic to satisfy the thirst of the health consumer
• Convenience/on-the-go/time-poor: while the majority of consumers purchase their bottled water in large formats from the multiples, it is important for vending operators not to forget the consumers who are on-the-go, especially time-poor office workers, and stock up to meet their thirst demands

Liz comments: "There has also recently been an emergence of functional waters into the market, with a growing amount of water products now claiming additional benefits. This is in keeping with the growing consumer awareness of health, and delivering in a much more functional way."

Sustainability

Sustainable development has been at the core of the Danone Group business philosophy and decision making for over 30 years, being committed to achieving long-term sustainability. For example over the past 15 years Danone has achieved a 30 per cent reduction in the weight of PET bottles and has increased the proportion of miles its products travel by train to 70 per cent of the total distance.

Carbon footprint

For the past two years, the company has been working to establish precise measurements of the carbon footprint of its water brands, Evian and Volvic. These measurements have enabled Danone to set concrete new targets to reduce CO2 emissions, and the company expects to achieve a 5 per cent reduction in 2008.

The company aiming to increase the proportion of miles travelled by its brands by train from 59 per cent (in 2005) to 73 per cent of the total distance from the sources in France to their UK warehouse.

"We deliver over 50 per cent of our products directly to our UK customers from our North European depots" says Liz. "This figure is up from 20 per cent in 2005. We have worked hard to ensure this policy factors in a greater use of electric trains; which are far less polluting than other means of transport such as lorries and we are therefore further reducing our CO2 footprint."

Reducing packaging

Over the last 15 years Danone Waters has achieved a 30 per cent reduction in the weight of PET bottles, and in the last three years alone it has reduced the average weight of Evian and Volvic bottles by 11 per cent. This year saw the phasing in of Evian and Volvic bottles manufactured from recycled PET.

Higher temperatures mean higher sales

Statistics show that the three months from June to August account for 35 per cent of annual water sales as demand for chilled water increases with the heat. "Merchandising bottled water correctly in this critical period can make a real difference to profit", emphasis Liz. "Vending operators can take full advantage of this opportunity by ensuring bottled water is given space in the chiller and by keeping their machines fully stocked.

"A change in temperature can trigger a noticeable effect on water sales. In terms of immediate consumption, if the temperature rises to 25°C, vending operators will see a 75 per cent increase in sales, and if the temperature rises to 30°C, water sales will increase by about 125 per cent, making it imperative to be fully prepared with the water chiller correctly merchandised for the hot summer months."

Why people choose bottled water

Liz Forte suggests that there are a number of reasons why consumers opt for bottled water over tap water. "One of the main reasons", she says, "is for convenience, as bottled water offers the perfect solution for those consumers who are either out and about or time-poor office workers. The main reason, though, is that bottled water is more effective at quenching thirst than juice or a carbonate drink. Indeed, even if brands such as Evian or Volvic are displayed at ambient temperature, shopper research indicates that in hot weather and the absence of chilled water, shoppers would rather purchase ambient water in preference to other ambient soft drinks because of water's ability to refresh, quench thirst and re-hydrate."

Activity in 2008

Evian's successful Detox campaign returned this year with a £1.5m marketing campaign - 15 per cent up on last year. Detox 08 communicated on the purity of Evian and the role it plays within body renewal.

Danone Waters launched its Volvic 1L-for-10L campaign in partnership with international relief and development charity World Vision in April. For every one litre of Volvic sold in the UK, Danone Waters and World Vision are generating ten litres of clean and safe drinking water in communities across Africa through the provision of mechanised wells. The 1-for-10 activity is linked to pack sales across more than 70 million specially branded packs of Volvic from the end of February to the end of the year, and is supported with a £3m marketing campaign.

The Volvic Touch of Fruit range has been reinvigorated with a brand new label design in order to boost on shelf-appeal and to drive trial amongst consumers. The new labelling, which will almost double in size, has rolled out across all bottles within the range from the 50cl bottles right through to the 1.5l bottles.

All figures quoted are sourced from AC Nielsen, MAT to 7.6.08

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