The sparkling water market - France

1.2 Global market

The global sparkling water market is valued at $**.* billion in ****, and is expected to triple by ****, corresponding to a CAGR of **.*% over the period ****-****.

Sparkling water sales projections World, ****-****, in billions of dollars Source: ****

This market can be segmented according to packaging: the bottled sparkling water market and the canned sparkling water market. Sparkling waters represent the largest market share in the bottled segment, accounting for **% of this segment [***]

Growth in the global market is being driven by growing public awareness of their health. Sparkling water provides a healthy, sugar-free alternative to water, particularly for social occasions (***). What's more, sparkling water's rich mineral content, such as magnesium, makes it an asset for everyday health.

Sparkling water with flavours is set for strong growth between now and ****. for example, Dash Water Waterloo Sparkling Water launched mango and apple-infused sparkling waters in ****, with no added sugar or calories.

Looking at bottled water consumption, which covers both still and sparkling water, Asia leads the way with **% of bottled water consumption, followed by Europe (***). [***]

However, if we look at the average annual consumption of bottled water per person, it's Europeans who are the most fond of this beverage, with ***.* bottles per person, followed ...

1.3 Domestic market

In Europe, France is the third largest consumer of bottled water, with an average of *** bottles consumed per person every year.

The seven biggest consumers of bottled water Europe, in bottles per person Source: ****

Over the period July ****-July ****, sales of carbonated waters in supermarkets and hypermarkets will total ***.* million euros. Natural sparkling waters account for the vast majority of sales, but this figure is down *.*%, while sales of flavored sparkling waters are down *.*%.

Breakdown of sparkling water sales in supermarkets by flavor France, July **** - July ****, as % of sales Source: ****

In volume terms, this corresponds to *.*** billion liters sold in supermarkets. The volume of flavored sparkling waters sold in supermarkets rose by *.*%, while that of carbonated waters fell by *.*%.

Breakdown of volume of carbonated waters sold in supermarkets by flavor France, July **** - July ****, as % of total sales Source : LSA The chart above summarizes the growth of the sparkling water market in France: Sales and volume growth in supermarkets France, July **** - July ****, in % (***) Source: ****

2.1 French drinking habits

Consumption of non-alcoholic beverages has been growing rapidly in recent years. According to theIWSR, in the ten countries that account for three quarters of the soft drinks market (***), the market for low-alcohol and non-alcohol drinks has grown by +*%. This growth seems to go hand in hand with a desire on the part of the French to consume less alcohol.

According to a survey carried out by OpinionWay at the end of ****, **% of French people would like to reduce their alcohol consumption in ****.[***].

The same study shows that **% of French people buy non-alcoholic beverages (***) primarily for pleasure, followed by the search for a specific taste, for **% of French people.

Selection criteria for the purchase of an alcohol-free beverage (***) France, ****, in Source: ****

This consumption trend should be beneficial to sparkling water consumption.

2.2 Sparkling water consumption trends

Although still water is preferred by the French, a study carried out by OpinionWay in **** shows that**% of them, or **.** million French people,consume bottled sparkling water on a daily basis. [***]

Percentage of French people who drink sparkling water at least once a... France, ****, % Source: ****

According to a study carried out by Kantar on a sample of **,*** people representative of the French population, **% of sparkling water consumption at home takes place at mealtimes , and two-thirds on weekdays. [***]

Sparkling water is increasingly consumed in flavored form. In ****, Kantar estimates that there will be *.** million consumers of flavored Perrier and *.** million consumers of Salvetat Citron. In the flavored water market, sparkling water accounts for **% of the share, with a greater share of growth in ****: +*.*% for flavored sparkling water vs. -*% for flavored still water. [***]

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

There are therefore at least *.** million consumers of flavored sparkling waters under the Perrier, Salvetat, Badoit and San Pellegrino brands.

2.3 France's favourite sparkling water brands

The graph below is based on OpinionWay's survey of French consumers' favorite brands in March ****. These are respondents' answers to the question "Do you like this brand of sparkling water? For each brand, the percentage corresponds to the proportion of respondents who answered "yes".

Perrier and Badoit are the two most popular sparkling water brands in France, with **.*% and **.*% positive responses respectively.

French people's favorite sparkling water brands France, ****, in Source: ****

However, men seem to appreciate sparkling waters more.

Level of appreciation of the sparkling water brands surveyed, by gender France, ****, in Source: ****

All the sparkling water brands studied have a high level of brand awareness, as they are all known by over **% of respondents.

We will now look at the differences in appreciation of these brands according to respondents' age category. Taking all brands together, appreciation increases with age. For example, for the most popular brand, Badoit, the percentage of **-** year-olds appreciating the brand is **.*%, whereas this percentage rises to **% among those aged ** and over.

Comparison of sparkling water brand appreciation levels by age category France, ****, in Source: ****

The graph below compares the approval ratings of these sparkling water brands according to respondents' region. The distribution of preferred brands ...

2.4 A desire for greener consumption

In ****, the Observatoire Société et Consommation carried out a study on responsible consumption involving **** people representative of the French population. The results show that **% of French people have decided to reduce (***) their consumption of bottled still water, and **% have reduced or eliminated their consumption of bottled sparkling water. Nevertheless, *% have increased their consumption, and **% still drink bottled water in general.

changes in French bottled water consumption practices France, ****, in Source: ****

With the emergence of ecological awareness, new ways of consuming are taking hold. According to the same study, a third of French people regularly use a water bottle. Sales of bottled water are expected to fall by *% in **** compared with ****. [***]

Sparkling water producers must therefore adapt with new practices. In ****, **% of French people own a home carbonation machine, and **% use it regularly. [***].

In ****, SNCF removed plastic bottles from its Wagons bar and now offers sparkling water in aluminum cans. [***]

Natarys, a French company, has created H*Origine, a bulk water dispensing machine that it places in organic stores to distribute still or sparkling water. [***]. The group, which also owns Savetat and Badoit, could also use its bulk-dispensing machines for sparkling water.

3.1 Structuring the industry

Water collection and treatment

Water can either be drawn from a deep underground aquifer, in which case it's calledmineral or spring water, or from a surface aquifer. In the first case, spring or mineral water can be consumed as is, and undergoes only minor treatment. In the second case, the water must be made potable through treatment and disinfection.

Thewater may be naturally carbonated, i.e. the water drawn from the source naturally contains gas of volcanic origin, or the water may have been additionally carbonated using gas naturally present in the source itself. (***). This is the case with Badoit and St Yorre waters, for example. Alternatively, if the water is flat or very finely sparkling, carbon dioxide is added artificially. This is known ascarbonated or sparkling water.

Carbonated or sparkling water can then be flavored, used to produce a new beverage or, more generally, consumed as is.

Packaging

Sparkling water is either bottled in plastic or glass bottles, or packaged in cans.

Distribution:

Sparkling water is mainly sold in supermarkets, but also in the CHR (***) circuit.

3.2 Production

We're going to take a look at the French table water production fabric, which includes sparkling water production and gives us an idea of how this market segment is evolving. These companies are registered under NAF code ****A :"Production of natural mineral waters and other bottled waters."

change in the number of employees and companies registered under NAF code **.**A France, ****-****, in units Source: ****

The trend is downward for the number of employees in the sector over the ****-**** period. The number of companies is stable, but rises in **** from ** to **.

We now turn to the geographical distribution of French table water production.

The Auverge-Rhone-Alpes region accounts for over a third of French production.

Number of companies Auvergne Rhône Alpes ** Burgundy * Brittany * Loire Valley * Corsica * Eastern France * Haut de France * Normandy * New Aquitaine * Occitanie * Pays de la Loire * Provence Alpes Côte d'Azur * Ile-de-France *

Production difficulties since ****

In January ****, NielsenIQ ranks flavored waters and sparkling waters as the food products most affected by shortages.

Food products most affected by shortages France, January ****, in Source: ****

The reasons for this shortage stem from difficulties in sourcing the food-grade CO* needed to gasify certain waters. This CO* comes mainly from fertilizer production, ...

3.3 Distribution

Sparkling water is distributed through three main channels:

Large and medium-sized retailers (***). This is where most sales take place.

Catering, for consumption in bars, restaurants and hotels (***).

Other retail outlets (***).

In supermarkets, while sparkling waters had shunned Drive-in sales, the confinement of **** seems to have accelerated sales in this channel. Plain sparkling water saw a +*.*% increase in Drive sales by value in **** compared with ****.

Drive weighting in value bellies and evolution France, ****, %, by value Sur : LSA

4.1 Plain sparkling and carbonated water

We have listed here the main sparkling and carbonated water offers from the Drives of leading supermarkets (***) as of May *, ****.

San Pellegrino is the only brand to offer plain sparkling water in cans. The various brands generally offer different bottle sizes: ** cL and * L, sold individually or in packs of *. What's more, supermarket bottles are almost exclusively made of plastic. Glass bottles are the preferred choice for the on-trade.

4.2 Carbonated and sparkling flavored water

We have listed here the main flavored sparkling and carbonated water offers from the Drives of leading supermarkets (***) as of May *, ****.

Flavored products are naturally more expensive than plain versions.

We have identified * flavors for the Badoit brand (***). These are fresh, fruity flavors with natural, sugar-free aromas.

For the San Pellegrino brand, we found ** different flavors, fruity and/or with tea (***), sold in cans.

Perrier innovates with its Perrier Juice range, sold in cans in packs of *. The classic Perrier is also available in a lemon-flavored version in bottles.

The new inputs are positioned solely on flavored sparkling waters, and were therefore not present in part *.*. The new inputs play on the presence of innovative molecules and fragrances to command much higher-than-average prices.

4.3 Producing carbonated water at home

For some years now, it has been possible to produce your own sparkling water at home, thanks in particular to the Sodastream brand (***).

Thanks to a machine that needs to be supplied with a carbon dioxide cartridge, it is possible to carbonate any type of water. The price of a Sodastream machine is around *** euros. A gas refill costs €**.** for ** L of drinks. It is also possible to refill the refill to pay only the price of gas at €**.**. [***]

The company is also taking advantage of evolving ecological awareness to boast a saving of ** disposable bottles per month. [***]

Faced with the growing consumption of flavored sparkling waters, Sodastream also offers concentrated syrups that can be added to create this drink at home.the range is extremely diverse, from organic fruity flavors (***). The price of these concentrates is around *-* euros.

5.1 Regulations

Regulations governing the production of sparkling water

The decree of January **, **** defines sparkling water and carbonated water as follows:[***]

"Names containing the words "gazeuse" or "eau gazeuse" are reserved for naturally carbonated water or water re-gasified with gases from the same source, or from mixtures of water from different sources.or from mixtures of spring waters whose exploitation has been authorized, by ministerial decision, under the conditions laid down by the laws and regulations in force." "Designations containing the word "gazéifié" are reserved for drinking water made gaseous by the addition of pure gases, the manufacture of which cannot take place without the authorization of the prefect of the department."

Unlike tap water, bottled water is intended solely for drinking, and is therefore classified as a food product.

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.

Packaging regulations

[***]

The materials used to package sparkling and carbonated water, whether for bottles or closures (***), must be treated or manufactured and used in such a way as to prevent ...

6.1 Positioning the players

• San Pellegrino
• Cristaline
• Danone Groupe
• Nestlé Waters
• Carrefour Groupe
• E.Leclerc
• Casino Groupe
• Saint Amand