Fernandina Beach, Fla. — There may be a year when Gary Hemphill reports that bottled water loses market to other beverages consumed by Americans.
But that year is not this year as the managing director with Beverage Market Corp. reports bottled water — and that essentially means PET bottled water — again grew in consumption in 2022, according to preliminary data.
"Bottled water continues to be the most popular beverage in the United States. People drink more bottled water than they do anything else. The category actually slowed a little bit in growth from what it's been doing historically in 2022. But it continues to widen its gap. It's the biggest beverage category," Hemphill said.
Hemphill is a regular at The Packaging Conference each year with his BMC data, which provides insight into all types of liquid consumption.
His preliminary data at this year's conference in Fernandina Beach, near Jacksonville, shows bottled water consumption made slight gains in 2022.
Bottled water, in total, reached 16 billion gallons consumed in 2022, the largest beverage category by volume. This came even as the total beverage market in the United States slowed last year, and actually dipped slightly, as inflation likely played a part is slowing volume performance, Hemphill told the conference crowd.
Hemphill pegged an overall volume decline for the entire retail U.S. beverage market of 0.04 percent in 2022, according to preliminary data. Final numbers come later this year, and with a plus or minus 1 percent range in play right now, that number actually could later swing into positive territory. In uncertain economic times people tend to drink more tap water. And consumers, last year, were less optimistic due to the pandemic as well as inflation concerns, Hemphill said.
Hemphill's preliminary data shows bottled water increased by 2 percent in 2022, slower than the 4.6 percent gain in 2021. Carbonated soft drinks (CSD), another category that widely uses PET bottles, saw a 0.6 percent increase in 2022, which followed a 3.1 percent increase in 2021. CSD had seen volume decline for 16 straight years until posting gains in 2021.
Bottled water had a total market share by volume of 25.1 percent in 2022, up from 24.8 percent in 2021 and 20.1 percent in 2016, Hemphill told the crowd. CSD had an 18.9-percent share in 2022 and 2021, down from 20 percent in 2016.
Total bottled water consumption has grown by a compounded annual growth rate of 5.3 percent between 2012 and 2022 for a total increase of 6.44 billion gallons. That's more than the entire beverage category's gain of 6.36 billion gallons over the same period as some other categories, such as fruit beverages and CSD, lost volume during the span.
Bottled water's increase of 2 percent in 2022 was the slowest growth rate since what Hemphill called a "recession-induced decline" in 2009.
"Higher prices and the category's mammoth size contributed to its modest growth," Hemphill said in his presentation.
The entire bottled water category is dominated by single-serve PET containers, which hold an out-sized portion of the market. "The single serve market did OK, 2.4 percent up, so it continues to be the segment that drives the overall [bottled water] category," Hemphill said.
PET single-serve bottles accounted for 71.3 percent of the total U.S. bottled water market in 2022, up from 71 percent in 2021. Containers holding 1 to 2.5 gallons represented 7.6 percent, down from 7.8 percent in 2021, Hemphill reported.
Plastic represented 47 percent of the total beverage market by container type in 2022. That's flat from 2021 and up from 2016's 44.2 percent. Cans held a 38-percent market share, up from 37.2 percent in 2021 and 36.3 percent in 2016. Glass was 10.8 percent in 2022, 11.5 percent in 2021 and 14.1 percent in 2016. Paper was 4.1 percent in 2022, 4.3 percent in 2021 and 5.2 percent in 2016.
"Over the last five years, plastic has seen the most growth due mostly to the success of the bottled water category," Hemphill said in his presentation.
The beverage expert also gave the crowd some insight for 2023. BMC is forecasting bottled water to grow in volume between 2-3 percent. Wholesale dollar growth is projected to be 6-7 percent. That compares with a projection of a 1-2 percent decrease for CSD, but a wholesale dollar growth of 5-6 percent for the year.
Sports drinks, also commonly packaged in PET, are projected to grow in volume by 2-3 percent in 2023 and experience wholesale dollar growth of 7-8 percent, Hemphill said.