Orlando, Fla. — Bottled water, especially in single-serve PET bottles, has never been more popular in the United States.
And one long-time observer of the growth trend expects more of the same this year and next.
Water, after years of growth, already has taken over carbonated soft drinks in popularity among America's beverage drinkers.
"Carbonated soft drinks continued its modest sales decline in 2017, and now this has occurred annually for over a decade now. So it's not a fad, it's a bona fide trend of a downward slide of that category," said Gary Hemphill, managing director and chief operating officer of Beverage Marketing Corp., a New York-based consulting and research firm.
"Opposite of that is the bottled water category, which since the early '90s has been on this growth juggernaut. And that continued to grow in 2017, and really driven primarily by that single-serve bottle segment, which is about two thirds of the volume of bottled water."
Hemphill is a mainstay at the Packaging Conference, held this year in Orlando, where he revealed his company's latest beverage market statistics.
Bottled water comes in many different container sizes, but the market is being driving by the vast popularity of single-serve containers, typically 16.9 ounces or half-liter.
Carbonated soft drinks have been steadily losing "share of stomach," Hemphill said.
Bottled water sales increased 6.7 percent in 2017, according to BMC's preliminary numbers, while carbonated soft drink sales fell 1.2 percent.
Tap water consumption also fell, an estimated 1.7 percent. Tap water use typically rises and falls with economic cycles. When consumer sentiment is stronger, more people turn to packaged beverages.
Between 2012 and 2017, bottled water saw its volume share of the U.S. beverage market increase from 16.1 percent to 21.8 percent. During the same period, carbonated soft drinks fell from 22.1 percent of the market in 2012 to 19.7 percent last year, Hemphill told the conference crowd.
"When you think about it, [soft drinks] still count for 20 percent of total liquid intake by Americans. So one out of every five beverages is a carbonated soft drink, in spite of the declines in recent years," Hemphill said. "So [it is] still a hugely popular category despite recent performance."
Over the past 10 years, bottled water has increased by a compounded annual growth rate of 4.5 percent, and soft drinks have fallen by a 1.8 percent CAGR.
Plastics accounted for 42.9 percent of the beverage packaging market last year, compared with 35.7 percent for cans and 14.4 percent for glass.
That compares with 36.4 percent of the market in 2012 for plastics, 40.1 percent for cans and 15 percent for paper.
"We think these trends, these numbers, are likely to continue for at least the next several years in this direction," Hemphill said.
Plastics have posted a compounded annual growth rate over five years of 4.8 percent.
Single-serve is the key driver in water's growth, and PET is the dominate material in that segment. PET single-serve containers now account for 66.8 percent of the market, compared to 64.9 percent in 2012, Hemphill said.
What he called "aggressive pricing" in the private label bottled water business has helped push that market higher in recent years. Some 9.1 billion gallons of water was sold at retail in single-serve bottles last year, according to preliminary figures. That compares to 8.6 billion gallons in 2016, 7.9 billion gallons in 2015, and 7.2 billion gallons in 2014.
The numbers were 6.7 billion gallons in 2013, and 6.3 billion gallons in 2012.
Growth slowed to 6.1 percent last year, compared to 9.2 percent the year before and 8.9 percent in 2015.
Branded PET water bottles accounted for 50.4 percent in 2017, with private label reaching 49.6 percent. Just five years before, in 2012, branded water held a 59.5 percent share, with private label at 40.5 percent.
"As CSDs [carbonated soft drinks] continue to decline and bottled water continues to grow, the gap between the two categories is only likely to widen even more," Hemphill's presentation states. "On a dollar basis, CSDs continue to be larger than bottled water, however."