On-trade consumption of bottled water has fallen abruptly in 2020 as a result of the closure of bars, cafés and restaurants during lockdown and the fact that outlets were forced to operate at limited capacity when reopened in order to maintain social distancing. The collapse of international tourism during the COVID-19 pandemic has also had a marked impact on on-trade sales of bottled water, as inbound tourists represent a key consumer group for businesses in many parts of Spain.
Functional bottled water was amongst the product areas to be hit hard by the decline in on-the-go consumption resulting from restrictions on consumers’ movement outside their homes during the COVID-19 pandemic. Meanwhile, manufacturers launched new bottled water products targeting at-home demand, including Aguas Danone’s carbonated natural mineral water brand, Fonter’s introduction of a medium carbonated water promoted primarily to be mixed with other drinks.
Aiming to target the rise in at-home consumption and the growing consumer interest in e-commerce, many bottled water players, including Vichy Catalan and market-leader, Aguas Danone, have invested in the development of online sales through their websites or through partnerships to enable home delivery through apps. As a result of the increase in online sales and the consumer desire to stock up on essentials, the bulk format, and particularly 5-8 litre bottles, has seen strong growth during 2020, while sales in on-the-go formats have fallen close to zero.
While off-trade bottled water volumes are expected to fall over 2020-2025, this will primarily reflect sales dropping off from the heights reached as a result of the closure of foodservice channels during lockdown. Indeed, off-trade volumes are expected to remain significantly higher than before the outbreak of COVID-19 throughout the forecast period and, after a steep decline in 2021, are expected to see continued year-on-year growth throughout the rest of the forecast period.
Flavoured bottled water is set to see strong growth over 2020-2025 as it continues to benefit from health-conscious consumers looking for alternatives to carbonates. Growth will be further spurred by new product launches, as bottled water brands seek to modernise their images and expand potential consumption occasions.
The significant shift to online retailing seen during the COVID-19 pandemic is expected to have a lasting impact on consumer behaviour. Many new consumers have become familiar with e-commerce, appreciating its convenience as well as its capacity to reduce the risk of contracting COVID-19, while established online shoppers have used the channel considerably more frequently.
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