Bottled Water in Canada

PROSPECTS

Consumers want the familiar fizzy sensation but healthier options

In response to the growing concerns over sugar intake and the use of synthetic and artificial sweeteners in beverages, consumers who find it hard to totally give up the familiar taste of carbonates are discovering carbonated bottled water as a good alternative to conventional carbonates. Compared with still bottled water, carbonated bottled water offers the more interesting and enjoyable experience that consumers seek, as well as providing an easy way for previous carbonates drinkers to change their habits.

Bulk bottled water remains strong but loses ground to single-use packs

Traditionally, price played an important role in encouraging consumers to choose bulk format water, although this is gradually becoming less relevant, as conventional home water filtration systems offer a better price advantage in the long-term. In addition, with the continuous rise in disposable income, consumers are less price-sensitive; thus, it is easier for them to compromise over the convenience offered by regular pack sizes.

The rapid premiumisation trend is boosting value sales

As bottled water wins consumers’ trust because of its healthy image, many shoppers who used to consume carbonates, which has wide product diversification, are unsatisfied with the basic offerings in bottled water, and this is opening up new horizons for suppliers to expand their portfolios and offer new flavours and health claims. This can be considered a win-win situation, whereby consumers can get the premium quality and packaging they demand through expensive imports, and suppliers can charge much higher prices and increase their profitability.

COMPETITIVE LANDSCAPE

Nestlé Waters of Canada remains the indisputable leader

Nestlé Waters of Canada has been able to secure its leading position in bottled water in both retail volume and value terms, thanks to its wide portfolio, which addresses the full spectrum of consumers’ needs. Whilst its Nestlé Pure Life brand has an economy positioning, and is often featured in flyers and used by grocery retailers as a loss leader, its premium range, including Perrier, S Pellegrino and Montclair, is focused towards more affluent consumers who are ready to pay for premium expensive imports.

Sustainable packaging is becoming a key consumer concern

The majority of the key players in bottled water have a strategic focus on sustainability in the form of packaging innovation and water conservation during the production process. Some of the common strategies have been to direct research towards new packaging designs that require less material, offer improved ergonomic functions and can be completely recyclable.

The competition will become stronger during the next five years

Bottled water has been one of the few categories within soft drinks to see strong growth rates in volume terms, and this has encouraged an increasing number of players and brands, both domestic and international, to enter this dynamic category. PepsiCo Beverages Canada’s launch of Bubly carbonated bottled water in 2018 can be regarded as a good example which is set to challenge the dominance of Nestlé and Coca-Cola in the near future.

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