Flavoured Water Innovation Report 2016

zenithinternational 2016 Flavoured Water Innovation

A review of recent key trends and new product development

February 2016

Research Note In undertaking its research for this report, Zenith has utilised its internal data library and global databases, alongside other third party sources and interviews with the industry. Throughout its on-going research, Zenith also depends upon the goodwill and co-operation of operators active in the marketplace, and, as such, seeks to achieve a high level of accuracy.

Liability This document contains information and may contain conclusions and recommendations. Every effort has been made to ensure that the information is accurate and that the opinions expressed are sound. However, Zenith International Ltd cannot be made liable for any errors or omissions or for any losses or consequential losses resulting from decisions based on the information.

Important notice on distribution This report should not be quoted, referred to or transmitted to another party, in whole or in part, with out the prior written consent of Zenith International Ltd. Should you desire to release a copy of this report to another party for information purposes, we request you and the requesting party to indemnify Zenith International from any liability related to the report distribution. Such readers however will not be considered “users� of this report.

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CONTENTS

The contacts at Zenith International in connection with this report are: Monika Fedor Consultant Zenith International Ltd., UK Tel: +44 1225 327936 mfedor@zenithinternational.com Esther Renfrew Market Intelligence Director Zenith International Ltd., UK Tel: +44 1225 327900 erenfrew@zenithinternational.com Zenith International Ltd 7 Kingsmead Square Bath BA1 2AB United Kingdom T +44 (0) 1225 327900 F +44 (0) 1225 327901 www.zenithinternational.com

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Section

Page

1. Introduction and scope

4

2. Category overview

7

 Commentary: global perspective of flavoured water  Commentary: new product development trends  Commentary: challenges and barriers  Commentary: insights and opportunities 3. Brand profiles

15

3.1 Brand profiles: plain water brand extension

16

3.2 Brand profiles: fruit-flavoured

28

3.3 Brand profiles: sugar-free

40

3.4 Brand profiles: natural positioning

47

3.5 Brand profiles: organic positioning

52

3.6 Brand profiles: herbs or flowers

57

3.7 Brand profiles: transition product

62

3.8 Brand profiles: child-oriented

67

3.9 Brand profiles: premium positioning

76

3.10 Brand profiles: packaging

83

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zenithinternational 1. Introduction and scope

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INTRODUCTION AND SCOPE Flavoured water innovation

Overview The aim of this report is to assess developments in the flavoured water sector, identifying and summarising trends and new innovations in order to understand what opportunities exist for new product development.

Scope This report provides a global market overview of trends and developments, it features brand profiles of leading and innovative flavoured water products worldwide and tracks recent innovation within the flavoured water category as well as investigating the future outlook of the market.

Categories covered in this report:  Still flavoured water  Sparkling flavoured water Products profiled in this report contain features that span a number of trends shaping the future of the flavoured water sector, including:  Plain water brand extensions  Natural and organic flavoured waters  Sugar-free flavoured waters  Flavoured waters featuring herb or flower essences  Premium flavoured waters  Fruit-flavoured waters  Citrus flavourings  Transition products  Waters for children  Packaging innovations

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INTRODUCTION AND SCOPE Flavoured water innovation

Definition: flavoured water For the purpose of this report, Zenith has limited its research scope using the following definition:  Sweetened with sugar, sweetener or unsweetened with added fruit essences/extracts; sparkling and still natural mineral, spring or bottled drinking water with added flavourings.  Includes:  Flavoured unsweetened bottled waters  Flavoured bottled waters with added sugar and/or sweetener  Products with fruit juice content which are positioned/marketed as flavoured water Exclusions  ‘Schorle’ (sparkling water and fruit juice) and other soft drinks  Limonaden’ (water-based, flavoured carbonated soft drinks popular in Germany)  Pressé drinks (ready-to-drink cordial drinks) Coverage Innovation and new product development shaping the global market for flavoured water launched from February 2013 to February 2016.

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zenithinternational 2. Category overview

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CATEGORY OVERVIEW Commentary – global trends and developments Global trends and developments in flavoured water consumption 

Commentary



Commentary



Commentary

Global flavoured water volume sales, mln litres

Flavoured water volume sales, mln litres by region 1,200 1,000 800 600 400 200 0

Region A Region B Region C Region D Region E Others 2013

2014

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2015e

2013 Page 8

2014

2015e

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CATEGORY OVERVIEW Commentary – global trends and developments Country trends and developments in flavoured water consumption  Commentary

Flavoured water market by country, % share 2015e Country A 8% Country B 8%

Others 30%

Some of the areas of emerging importance include:  Country: Commentary  Country: Commentary  Country: Commentary  Country: Commentary  Country: Commentary

Country C 9%

Country D 9% Country H 9% Country G 9%

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Country E 9% Country F 9%

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CATEGORY OVERVIEW Commentary – flavoured water categories

Plain Water Brand Extensions  Commentary

Fruit-flavoured  Commentary

Sugar-Free  Commetary

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CATEGORY OVERVIEW Commentary – flavoured water categories

Natural positioning  Commentary

Organic positioning  Commentary

Herbs or flowers  Commentary

Transition product  Commentary

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CATEGORY OVERVIEW Commentary – flavoured water categories

Child-oriented  Commentary

Premium-positioning  Commentary

Packaging innovation  Commentary

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CATEGORY OVERVIEW Flavoured water category challenges and barriers

CHALLENGES AND BARRIERS

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CATEGORY OVERVIEW Flavoured water category insights and opportunities

INSIGHTS AND OPPORTUNITIES

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zenithinternational 3. Brand profiles

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zenithinternational 3.1 Brand profiles

Plain Water Brand Extensions

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PLAIN WATER BRAND EXTENSIONS New flavour variant: Yoghurt

Minami-Alps Tennensui & Yogurina Suntory Beverage & Food Limited, Japan http://www.suntory.co.jp/water/tennensui/

Product information: Minami-Alps Tennensui & Yogurina is a flavoured extension of Suntory’s mineral water brand ‘Minami-Alps Tennensui’ in Japan. Where Suntory have previously explored fruit-flavoured variants (such as the 2014 launch of flavour Azu-zumi Orange), the latest flavour offering is a less conventional Yogurt flavour. Made with sour whey the water offers a “tang of yogurt and a refreshing sweetness” while maintaining a clear appearance. The ingredient formulation also provides the water with a higher mineral and amino acid content.

Launch date: April 2015 Variants: Honey Lemon, Yogurina, Azu-zumi Orange, Sparkling Lemon, Minami-Alps Tennensui Sparkling (original sparkling), Minami-Alps Tennensui (original) Ingredients: Mineral water, whey fermentation milk, honey, salt mint extract, flavouring, acidulant, antioxidants, sugar Positioning: Adults Channels: Retail nationwide Pack size & type: PET bottle: 550ml, 280ml Price: JPY 124 for 550ml bottle

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zenithinternational 3.2 Brand profiles

Fruit-flavoured

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zenithinternational 3.3 Brand profiles

Sugar-free

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zenithinternational 3.4 Brand profiles

Natural positioning

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zenithinternational 3.5 Brand profiles

Organic positioning

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zenithinternational 3.6 Brand profiles

Herbs or flowers

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zenithinternational 3.7 Brand profiles

Transition product

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zenithinternational 3.8 Brand profiles

Child-oriented

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zenithinternational 3.9 Brand profiles

Premium positioning

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zenithinternational 3.10 Brand profiles

Packaging

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