The flavoured water market | france - France (2024)

1.2 The global flavored water market

development of the global flavored water market World, ****-****, in billions of US$ Source: The Business Research Company The global market for flavored water is estimated at $**.** billion in ****, and is expected to reach $**.** billion in ****, with a compound annual growth rate of *.*% over the period. This growth will be driven by consumer preference for products with fewer calories and greater hydration.

North America is the largest market region in ****, and is expected to be the fastest-growing region over the period.

Flavored waters are benefiting from consumers' growing rejection of soda-type beverages, whose harmful effects on health have been demonstrated. Flavored waters are thus positioned as the ideal compromise between sweetened pleasure drinks and water, which may not be attractive enough or perceived as not very tasty. The massive consumer focus on healthy lifestyles is driving market growth.

The world leaders in non-alcoholic refreshment beverages (***) are investing in the market, following the example of Coca-Cola's acquisition of Vitaminwater. But many players in the bottled water market are also investing, such as Danone with its Volvic Fraise, a market pioneer. Major companies have recently invested in vitamin-infused waters, which offer superior nutritional benefits. In July ****, Flox Beverage Corp launched a range based ...

1.3 A French market struggling to recover from the crisis

The French bottled water market

The heatwave was a boon for bottled water, which saw little growth in the first quarter. The BRSA market was estimated at *.** billion euros in ****, up *.*% on the previous year. However, sales volumes were down *.*%. [***]

We can see that sales of still fruit drinks will amount to *** million euros in **** in France, a figure almost as high as for soft drinks and carbonated fruit drinks. The bottled water market, a major producer of plastic, is in the midst of transformation and innovation, with the aim of offering products that consume less plastic. While the market continued to post sales growth in volume and value terms, in July **** it faced a crisis of confidence that is undermining its sales.

Sales of refreshing non-alcoholic beverages (***) by product type France, in ****, in billions of euros Source: ****

Sales volume growth rates for soft drinks and water France, ****-****, in Source: ****

The French flavored water market

sales growth of flavored waters France, ****-****, in % Source: ****

While the market enjoyed sustained growth until the containment period, it is struggling to pick up again in ****. The pandemic has hit the flavored water market hard, as the purchase of flavored water is more of ...

1.4 Foreign trade

French trade balance for flavored waters France, ****-****, in millions of dollars and as a % of sales Source : UN Comtrade Code:

France is a net exporter of flavored waters until ****; however, in ****, France becomes an importer, and the coverage rate has only fallen since that year to **.*%.

France's main customer countries France, ****, in % of total value Source: UN Comtrade France's main customer countries are its neighbors: the UK, Belgium and Germany account for **.*% of total exports by value. France's main supplier countries for flavored waters France, ****, in % of total value Source: UN Comtrade France's main customers are its neighboring countries: Austria, Germany and the Netherlands account for **.*% of total imports by value.

2.1 Demand and its determinants

Flavored waters are at the crossroads of two major markets: soft drinks and bottled water. The outlets and determinants of demand are therefore similar.

The two main outlets for flavored water producers are :

the on-trade network supermarkets

The main drivers of flavored water consumption are as follows:

the importance given to health and naturalness competition from substitutes the state of the on-trade network global warming, which increases the need for refreshing beverages.

on a European scale, the French are low soft-drink consumers, with only **.*L per capita per year, compared with an EU average of **L.

Annual consumption of soft drinks per inhabitant France, in ****, in liters Source: ****

French consumption of flavored water

According to a Harris Interactive survey, only *% of French people claim to drink flavored water on a daily basis in December ****.

Poll: what types of water do the French drink on a daily basis? France, December ****, in Source: ****

Number of people using flavored water, by brand France, ****, in millions Source: ****

In ****, **.* million French people consumed bottled flavored water.

2.2 The French are increasingly sensitive to naturalness, innovation and ecology

Tworldwide trend: the search for healthy, natural foods

As an alternative to soft drinks, the French are turning to flavored waters to quench their thirst. Sparkling waters are the fastest-growing category in terms of volume, but they account for a smaller proportion of the total than flat flavored waters. This demand is set to increase with consumers' quest for naturalness. [***]

Infusing flavors into water can therefore be a way of adding nutrients to water. According to Forbes in ****, **% of all consumers, including **% of those aged ** and over, are more concerned about the nutritional benefits of their food and beverage choices than in ****, while **% of Americans aim to limit their sugar intake, compared with **% in ****. As a result, consumers' increasing focus on healthy living is driving the growth of flavored water.

According to CHD Expert, Nielsen, ** millions de consommateurs, **% of French people want to consume responsibly, **% of them pay attention to the naturalness of products and **% say they adopt a ***% healthy lifestyle. The flavored water offer is therefore aligning with the development of organic product ranges, which promise zero additives, zero preservatives and zero sugar.

Ecology

The growing ecological awareness of the French is also likely to have an impact on the ...

2.3 Rising temperatures have a direct impact on flavored water sales

The historically warm month of May **** had a positive effect on temperature-sensitive categories such as flavored waters and syrups.

The extra * degrees compared to seasonal averages led to a **% rise in sales of so-called "weather-sensitive" products, while mass-market products fell by *.*%.

Among these products, two stand out: flavored waters and syrups.

sales trends in the most weather-sensitive categories France, growth in **** and **** over the * weeks of May, in % Soource : Nielsen IQ

In fact, sales of flavored waters rose by **.*%. This should accelerate their good momentum. According to NielsenIQ, over the ** months to May **, this segment of still and sparkling waters saw volumes jump by +*.*%. Syrups also benefited from the weather, with sales up +**.*% on May ****.

Rising temperatures have led to an ever-increasing need to stay hydrated, and to consume refreshing, truly hydrating beverages as opposed to ultra-sweet sodas. Flavored waters therefore represent a compromise for consumers.

The seasonal nature of demand can also be seen in internet searches for 'flavored water', which always peak around June-July.

evolution of searches for the term "eau aromatisée France, April **** - June ****, index base *** Source: ****

2.4 The rise of flavored waters in the on-trade

Already well-established in supermarkets, they have potential in the on-trade, even if penetration of this channel takes longer."Flavored drinks can already be found in fast-food outlets, with our chain customers and on takeaways," stresses Camille Delettrez. Growth in volume is mainly driven by flavored sparkling waters, with the San Pellegrino fruit range, Perrier lime (***) The role of flavored waters could increase as French alcohol consumption declines. Annual consumption in France has been structurally declining for several years: it reached **.** L/person in ****, compared with a peak of **.** in **** (***). [***] Annual alcohol consumption France, ****-****, in liters per person Source:OFDT This drop in consumption has prompted the CHR network to innovate and offer their customers flavored water. "For restaurateurs, it's an opportunity to offer a drink that can be enjoyed all day long, especially as it's so easy to make", says Alice Vasseur, Head of Marketing CHD & Market Intelligence EMEIA at Monin. Once the glass is filled with ice cubes, all you have to do is add a flavoring to still or sparkling water.for example, Monin offers a "jar or fountain" presentation, with an eye-catching visual impact, personalized with fruit, vegetables and fresh herbs reminiscent of the main flavoring. The ...

3.1 Value chain

The bottled water value chain begins with underground water collection, or with surface water for water that has been treated. Spring and mineral waters are consumable as they are, and undergo little treatment (***). Disinfection is prohibited. Water that has been made drinkable by treatment, on the other hand, must be disinfected to be fit for consumption.

The water is then bottled and distributed either to the catering and food trades, or to hypermarkets and supermarkets (***).

3.2 Flavored water production is highly concentrated

The flavored water market is highly concentrated among bottled water players: Danone Eaux France (***)... Mass-market retailers are investing in this market by establishing partnerships with small-scale producers.

Looking at the bottled water market in general, we can see that it is fairly concentrated. Three groups hold more than three-quarters of the market: Neptune and Nestlé Waters, with **.*% each, and Danone, with **.*%.

Market share of leading water brands France, ****, in Source: ****

Market share in value by brand type France, in ****, in Source: ****

In the non-alcoholic refreshment beverage sector, the market is highly concentrated around the major brands, which account for **.*% of sales, including **.*% from large groups and *% from SMEs. However, it's interesting to note that while low-cost private labels only account for *.*% of market share, they recorded growth of **.*% in value and **.*% in volume in ****. SMEs recorded the sharpest decline, with -**.*% in volume and -*.*% in value.

Naf code **.**A, which covers the production of natural mineral waters and other bottled waters, provides us with information on French production. Sales in the table water industry have been rising steadily since ****, increasing by **.*% in **** and **.*% since ****.

Table water industry sales index France, ****-****, index base *** **** Source: ****

The table water industry

The number ...

3.3 Dispensing flavored water

Flavored bottled waters are distributed through three main channels:

supermarkets for consumption at home or on the move: the leading brands are those of the Casino group (***)

foodservice for consumption in bars and restaurants: within this distribution channel, mineral waters are predominant; in fact, spring waters such as Cristalline are only rarely sold in foodservice, whereas waters such as Evian are more frequently sold

other retail outlets (***)

Supermarkets and hypermarkets account for the majority of sales of flavored bottled water.

Market share in value by channel France, in ****, in Source: ****

Hypermarkets dominate with **.*% market share, followed by supermarkets with **.*%. Convenience stores account for **.*%, while EDMPs (***) occupy **.*% and *.*% of market share respectively.

New distribution experiments are being tried to limit the environmental impact of bottled flavored water consumption, even though the distribution of drinks in plastic bottles will be banned in France by ****.

For example, Danone is planning to offer mineral water in bulk , with the development of a fountain containing Evian water. Danone's partner is Micro Matic, a leading manufacturer of kegs for beer taps. Although the offer will initially be tested in publicly accessible locations such as the Hilton Hotel and Sodexo headquarters, the formula must also be accessible to ...

4.1 More and more different products at higher and higher prices

Typology of the flavored water offer

The flavored water offer can be segmented in different ways according to :

the water used: mineral or spring water the nature of the water: still or sparkling what is used for flavoring: fruit, plant and the resulting taste.

The diversity of products on offer is growing all the time, with the launch of organic, vitamin-enriched, augmented, etc. offers.

Flavored water prices

Consumer prices for mineral or spring water fell sharply between **** and ****, but seem to have started to rise since ****. There are many reasons for this recent rise in prices. Firstly, producers have passed on higher plastic prices to consumers, taking advantage of the market's oligopolistic structure to do so. Secondly, they have turned to higher value-added products, such as water with the AB (***) label. Lastly, in force since January *, ****, the EGalim law imposes limits on promotional benefits designed to reduce the selling price of a foodstuff to the consumer. [***]

Consumer price index for mineral and spring waters France, ****-****, index base *** in **** Source: ****

This graph shows the evolution of mineral water consumer prices, and indeed it has been rising since **** and increased by **% between **** and ****.

There are significant price differences depending on the product ...

4.2 An increasingly comprehensive offering

Standard flavored waters cost less than one euro per liter. For new products, the cost is between *.** and *.** euros per liter, with some reaching almost five euros, with the promise of optimized hydration. [***]

More functional waters

A new trend is emerging in the bottled water market: enhanced or functional waters, enriched with vitamins, minerals or other essential nutrients. In this way, they provide hydration and additional physical and mental benefits. Their composition includes herbs, plants, fruits, vegetables and natural flavors.

The Nestlé group intends to be disruptive with the launch of Perrier Energize, an energy drink based on natural mineral water and caffeine Sources du Pestrin announces drinks with CBD, iron, vitamin C and collagen. Eloa has just launched Eloa Waters with three organic references featuring infused aloe vera. lSA-Conso

Flavored water bottles

Air'Up and Waterdrop, for example, offer water bottles with added flavor.

Waterdrop offers capsules with fruity or flowery flavors to add taste to water Air'Up has developed a retro-olfactory device which diffuses a scent that gives the brain the impression of drinking water with taste, without adding any flavoring.

As far as price is concerned, regular use is required to amortize the basic price.

At Waterdrop, boxes of ...

4.4 A rather short-lived "Instagram" effect

Flavored waters also appeal for their "Instagrammable" side, a side that has been particularly exploited by start-ups Air Up and Waterdrop. Buoyed by a communications strategy focused on social networks such as TikTok, YouTube and Instagram, the two companies are enjoying growing success in France, particularly among **- to **-year-olds. Between **** and ****, their sales in the Hexagone recorded a significant ***% increase, reaching five million customers and generating sales of *** million euros in ****. Young French people, attracted by what's new and inclined to change their habits, make a major contribution to this dynamic, as evidenced by Waterdrop's data showing that **% of their audience on TikTok comes from France.

Influencers also play a key role in this trend, with celebrities such as Michou and Nabilla Vergara helping to promote Air Up and Waterdrop products thanks to their vast audiences. This phenomenon is juxtaposed with consumers' growing disinterest in traditional flavored waters, such as Volvic, Perrier or Vittel, sales of which fell by *% in ****. In contrast, sales of still and natural waters rose by *.*% and *.*% respectively over the same period, illustrating a growing preference for naturalness and "sugar-free", a favorable backdrop for the growth of young companies such as Air Up and Waterdrop. [***]

Is ...

5.1 Current regulations

Quality criteria

Water is subject to specific regulations(***) which distinguishes, under this term, three types of water according to their origin, their stability and the treatments to which they have been subjected:

natural mineral water ; spring water ; water made potable by treatment.

Three types of bottled water:

Water made drinkable by treatment, in accordance with current regulations, may come from underground or surface resources. It must comply with the quality criteria applicable to tap water (***) and may undergo all treatments authorized for tap water, including disinfection. They are not widely marketed in France. Under current regulations, natural mineral waters and spring waters are exclusively of underground origin and must be microbiologically sound. No disinfection treatment is permitted.

However, in order to eliminate undesirable or toxic elements of natural origin (***). The exploitation and bottling of natural mineral waters and spring waters are subject to prefectoral authorization.

Spring water, water made potable by treatment and mineral water are not subject to the same quality criteria:

Spring water and water made potable by treatment must meet the same quality criteria as water delivered to the consumer's tap. They can be consumed without risk throughout a person's life. Natural mineral water must meet specific regulatory ...

6.1 Player segmentation

• Alma Sources (Groupe Alma - Neptune) Roxane Groupe
• Danone Groupe
• Nestlé Waters
• Cristaline