Bottled Water in Australia

2021 DEVELOPMENTS

Decline in bottled water sales continues as on-the-go consumption occasions diminish

The COVID-19 pandemic has had a huge impact on bottled water in Australia as many of the categories’ primary consumption occasions have become far less frequent. A large proportion of still water has traditionally been sold through on-the-go channels such as convenience stores and forecourt retailers, where it is consumed as a refreshing no-calorie beverage.

Carbonated bottled water continues to benefit from the at-home cocktail culture

Although still bottled water is in decline, Australian consumers still desire to consume water that offers something that tap water cannot provide. Carbonated bottled water continued to achieve positive value growth in 2021.

Health trend leads to fads in functional still water and switches from carbonates to mineral water alternatives

Exercise was another popular motivation for water consumption prior to the pandemic, particularly consumption of functional bottled water and still flavoured bottled water. These were often consumed after a workout at a gym, or during a fun run or marathon.

PROSPECTS AND OPPORTUNITIES

Trading up and premium brand preferences likely to persist in the forecast period

Many Australian consumers have benefited financially from the COVID-19 pandemic and associated lockdowns, as it has limited the opportunities to spend money on activities such as travel and enabled them to accumulate savings. When shopping for bottled water, they are consequently well situated to choose a premium brand.

Environmental and sustainability concerns will continue to impact bottled water sales over the forecast period

The popularity of still bottled water in a developed economy such as Australia, where – with the possible exception of South Australia – tap water is considered both safe and clean, has long been widely criticised on the grounds that the packaging of such an unnecessary product is a waste of resources, and regularly ends up either as litter or as landfill. Media articles and thought pieces condemning the practice are ubiquitous and have been for at least a decade.

Target market set to evaporate as the consumer base is smaller, consumption occasions are fewer and alternative options increase

The profile of the average still bottled water consumer is physically active and in their 20s and 30s. Due to the lack of migration during the COVID-19 pandemic and likely slow recovery in its aftermath, little growth is expected in this age group.