Bottled Water in Switzerland

2020 IMPACT

Temporary recovery in off-trade sales due to home seclusion

In contrast to longer-term overall stability, bottle water volume sales across all channels witnessed high levels of volatility on a monthly basis in the first half of 2020 as a result of the COVID-19 crisis, with rapid growth in March compared to March 2019, followed by double-digit declines in April and May, according to the trade association SMS (Verband Schweizerischer Mineralquellen und Soft-Drink-Produzenten - The Association of Swiss Mineral Water and Soft Drinks Producers). While these fluctuations were mostly the result of lockdown measures in March and April directly impacting on-trade sales, they also filtered through off-trade sales, as sales of larger pack sizes for home consumption were boosted by stockpiling and consumers being more secluded at home.

Carbonated natural mineral water witnesses a modest boost in sales due to COVID-19

The performance of bottled water sales in Switzerland is heavily dependent on carbonated natural mineral bottled water, a mature category which generates the majority of bottled water off-trade volume sales and which witnessed stagnating volume sales between 2015 and 2020, undermined by a lack of product innovations. Carbonated natural mineral bottled water, however, witnessed a significant but temporary boost in the first half of 2020 due to stockpiling during the lockdown in spring, as this type of water is less susceptible to being substituted by tap water than still bottled water.

Growing environmental concerns shape key players’ strategies

Nestlé Waters Suisse is set to remain the largest bottled water player in 2020, thanks to a wide range of well-known Swiss brands such as Cristalp and Henniez, in addition to the international brands S Pellegrino and Vittel, although its share is expected to drop slightly.

RECOVERY AND OPPORTUNITIES

Shift from on-trade to off-trade helps mitigate stagnation

Bottled water consumption in Switzerland is expected to remain among the highest in Europe and is likely to be further supported in the forecast period by consumers associating Swiss mineral water with having a high quality of mineral composition. Off-trade sales are also predicted to continue benefiting from the shift towards staying at home longer as a result of the COVID-19 crisis, albeit to a lesser extent than in 2020.

Maturity of two key categories limits growth prospects

The largest bottled water category, carbonated natural mineral bottled water, is highly mature and is expected to see a slight drop in volume sales, as it suffers from growing competition from water fountains which offer carbonated water at a lower cost whilst avoiding the need to use plastic bottles, notably as a result of the growing popularity of the SodaStream brand.

Flavoured water and functional water may expand their consumer base

Both flavoured water and functional water are expected to register positive volume sales growth in the forecast period, as they can increase their penetration among Swiss households from a relatively low base, as long as they remain supported by new product launches, including from private label. Both categories can succeed in attracting consumers looking for alternatives to carbonates offering a lower sugar content.