Bottled water consumption tops US beverage sales

Tampa, Fla. — It's official. Bottled water has overtaken carbonated soft drinks in consumption for the first time ever in the United States to become the largest beverage category.

The juggernaut that is bottled water consumption grew by 8.5 percent last year, the continuation of a years-long trend that also saw carbonated soft drink volume fall by 1.7 percent in 2016, according to Gary Hemphill, managing director and chief operating officer at Beverage Marketing Corp.

Hemphill's research and consulting firm studies beverage consumption and has been reporting on the continued growth of bottled water consumption that's now stretching into its 12th consecutive year.

“Bottled water has surpassed carbonated soft drinks as the No. 1 beverage category in the U.S. on a volume bases. Certainly not on a dollar basis — carbonated soft drinks are still larger on a dollar basis. But what people actually drink, bottled water is actually bigger than CSD. Which is really kind of remarkable when you consider bottled water's growth trajectory didn't really start until the early ‘90s,” Hemphill said.

About two-thirds of bottled water consumption comes from single-serve containers, which means that more and more water is being served in PET bottles.

Overall, plastic accounted for 41.2 percent of all beverage packaging units in 2016, up from 36.5 percent in 2012, Hemphill told the Packaging Conference in Tampa.

This gain comes at the expense of both metal cans, which fell from 40 percent of the packaging units in 2012 to 36.8 percent last year, and glass, which fell from 15.1 percent to 14.7 percent during the same time.

As the popularity of bottled water continues to rise, the bottled beverage has been buoyed by both falling retail prices and a push toward healthier beverage choices.

Bottled water has benefited by advances in supply chain costs, including high speed bottling lines, mostly stable resin prices except for a recent uptick, continued bottle light weighting and stable fuel costs, he told the conference.

“CSDs are declining. We don't expect that to change anytime soon,” Hemphill said. “I just think it's going to be a tough future.”

While the overall bottled water increase was 8.5 percent in 2016, the single-serve bottled portion of the segment actually increased by 9 percent last year, he said. The retail PET water bottle market has grown by a compounded annual growth rate of 8.1 percent from 2011 to 2016

And Hemphill sees the market to continue to be strong this year, with an estimated 8 to 9 percent increase in 2017. Carbonated soft drinks are expected to again fall by 1 to 2 percent this year.

Private-label bottled water, compared with branded water, increased to 47.5 percent of the bottled water market last year. That's up from 36.7 percent in 2011, Hemphill said.

Bottled water accounted for 20.5 percent of the overall U.S. beverage market last year, up from 15.2 percent in 2011. Carbonated soft drinks held a 19.8-percent share, down from 22.7 percent in 2011, he told the crowd.