What the Bottled Water Boom Could Mean For Packaging

It shouldn’t come as a surprise that the biggest names in the beverage industry are spending massive amounts of money on their marketing and advertising campaigns. But what may raise a few eyebrows are the amounts of cash that companies like PepsiCo, Coca-Cola and Nestlé are dedicating specifically to bottled water.

A recent report in Adweek details some of the numbers. Citing data from Kantar Media, Adweek reports Propel, Aquafina Sparkling (PepsiCo properties) and Smartwater (a Coca-Cola brand) spent $44.3 million through the first 11 months of 2016, which the article states is nearly double that of the year before.

So, what is driving this trend and what could it mean for the packaging industry? There’s little doubt that the sharp increase in bottled water consumption stems from consumers actively seeking a healthier lifestyle. In fact, according to a March 10 press release from the Beverage Marketing Corp., bottled water has officially stolen the crown from carbonated soft drinks as the No. 1 beverage category in the United States. From the release:

“Bottled water's ascent coincided with and encouraged seismic shifts in consumer preferences for healthier refreshment and rehydration.”

In a bit of a “perfect storm” situation, this shift in consumer preference for water over soda has coincided with several cities across the U.S. implementing a tax on sugary drinks. And since these taxes have officially taken effect, soda consumption has sharply declined in some of these municipalities, including Berkeley, Calif.

While this news may appear bleak for packaging and label printers and converters with stakes in the soda business, the shifting of resources, combined with increasing SKUs in bottled water also presents some unprecedented opportunities.

For example, PepsiCo’s most well-known bottled water brand may be Aquafina, but the beverage giant has expanded that brand to include Aquafina Sparkling, and recently launched LIFEWTR, a premium bottled water featuring added electrolytes, which debuted in February with a commercial during the Super Bowl.

PepsiCo's LIFEWTR is one example of a newly launched bottled water brand, which relies largely on its packaging to attract consumers.

When PepsiCo announced the launch of the new brand, it stated in a press release from label converter Constantia Flexibles, the product’s label would be the brand’s biggest equity. With a dynamic label design featuring multiple graphics based on different works of art from up and coming artists, Constantia Flexibles leapt at the opportunity to partner with PepsiCo for its latest foray into bottled water.

“It was exciting from the standpoint that everybody knew there was going to be a Super Bowl commercial on LIFEWTR,” Dan Muenzer, VP of marketing for Constantia Flexibles told packagePRINTING in a video interview. “So you’re running something on press and you know that in 30 days there’s going to be a Super Bowl commercial featuring John Legend that highlights this label. And to have Pepsi come out and say the biggest piece of brand equity they have on this brand is the label, it really puts attention on us as a label printer that we’ve never had before.”

Unlike the soda industry, where brands can differentiate their product with different flavors and varieties, there’s only so much that can be done with water. These major beverage conglomerates that are making such a strong push in the water market have to rely on branding and establishing rapport with the consumer to keep up with the competition, most of which is pushing a similar product.

As Michael Bellas, chairman and CEO of the Beverage Marketing Corp., told Adweek in its recent article, the biggest names in the industry are the ones leading the spending charge.

“The marketing support [for water brands] has been relatively small. It’s a very tiny amount compared to the other beverage categories, but certain companies are really leading it — Coca-Cola, Pepsi, Nestlé. It’s not so much that the category is exploding but that certain companies are spending more.”

Clearly, big beverage brands are seeking creative, eye-catching opportunities to promote its bottled water offerings to consumers. Converters that can offer special effects and pristine print quality would be well-served by reaching out to these brands, pitching their capabilities and explaining how they can help their bottled water properties continue to land in consumers' shopping baskets. As soda consumption continues to slip, those who can creatively package and market bottled water, will be strongly positioned to reap the rewards of the shifting beverage landscape.