Healthy hydration gathers momentum
Following a decline in 2014, flavoured and functional waters returned to growth across Europe in 2015, according to a new report by Canadean, highlighting a growing shift in consumer buying behaviour towards healthier hydration.
West Europe flavoured and functional water consumption halted an annual decline of 5% to record a flat performance year-on-year in 2015, while East Europe saw further growth approaching 4%. Consumer buying trends in most markets have undergone a behavioural shift away from products perceived as less healthy to healthier hydration alternatives in tune with the current health and wellness trend.
Flavoured water represents around 3% of the total soft drinks market in West Europe, with strong investment aiding growth. Market gains were recorded in countries such as the UK, the Netherlands and France, with consumers seeking perceived healthier alternatives to carbonates but still desiring the flavour that plain packaged water does not offer.
The sugar debate in the UK helped boost growth progress as soft drinks with higher sugar content were viewed more negatively. However, losses in Germany, due to competition from adult lemonades, undermined the overall category growth. Nonetheless the flavoured water market still holds a significant 6% share of the German market.
In the East European flavoured water market, gains were registered in Croatia, Hungary and Serbia, benefitting from the fact that flavoured water drinks in the region are often extensions of well known packaged water brands. Zero sugar varieties of flavoured water were also launched in Slovenia to counter the negative press regarding sugar content in other beverages.
The functional waters category remains low level in the majority of West Europe markets, and suffered a decline of nearly 1% in 2015. Increases were recorded for Italy, thanks to the weather, and Finland, fuelled by the availability of a wider range of products.
Functional waters are not present in many East European markets; the high cost, along with consumer scepticism towards additives, limits the category’s potential.
Canadean analyst Andy Curran says, “While growth in the flavoured and functional waters sub categories is unbalanced, there is potential for significant gains as the healthy hydration trend gathers momentum.”