文：Foodaily每日食品 Gin Wang
This year's water wars are more ferocious than ever.
Since the beginning of the year, the topic of bottled water market has continued to rise, and it has been mentioned in the field of public opinion.
In April this year, China Resources Beverage officially submitted a listing application to the Hong Kong Stock Exchange, followed by Nongfu Spring launching green bottles to break into the pure water track; In August, Nongfu Spring's semi-annual report announced that the bottled water business declined for the first time due to the public opinion crisis, and the revenue of packaged drinking water in the first half of 2024 fell by 18.3% year-on-year, with a decrease of 1.9 billion in half a year.
Wahaha, another giant of bottled water, has experienced a change of leadership, but it is revealed that in the first half of this year, the revenue of the pure water business achieved a growth of more than 10% [1], and in August, it also released information such as investment 10W+ freezers to the industry.
In addition to the traditional water and beverage giants, channel brands such as Dongfang Selection, Sam's, and Fat Donglai have crossed over into the bottled water track......
Looking back at the 40 years of bottled water struggle, from Cestbon, the originator of pure water, to Wahaha, from the mineral water giant Nongfu Spring to the "water aristocracy" Baisui Mountain, pure water, natural water, mineral water... The "water war" between various brands has never stopped. What's new in the bottled water market this year? What are some new paths to the track?
Giants and channels are attacking, and bottled water is involved in the 1 yuan era
In the earnings call for the second quarter of this year, the head of Coca-Cola directly said that "the bottled water business is not profitable in China", and said that it will reduce the priority of the bottled water business in the Chinese market and focus on categories such as carbonated drinks, juices and tea.
Behind this decision, the head of Coke is really unable to bear the fierce price war of bottled water in the Chinese market.
In April this year, Nongfu Spring officially announced the "Green Bottle", returning to the pure water track after 24 years, and even engaging in promotional activities, and the price of a single product during the 618 period was directly pulled to below 1 yuan.
Image source: Nongfu Spring
According to the disclosed data, Nongfu Spring Green Bottle Purified Water shipped 14 million boxes in just ten days after it was launched, with a delivery volume of 280 million yuan, reaching 137,000 terminal stores.
In the face of Nongfu Spring's fierce offensive, the head brand of the pure water track could not sit still.
According to data from CIC Consulting, the market share of pure water accounts for more than half of the entire bottled water share, reaching a scale of 100 billion yuan, and the top five leading brands are Cestbon, Wahaha, Jinmailang, Jingtian and Master Kong.
Data source: CIC Consulting Image source: Foodaily homemade
According to Foodaily's incomplete survey, the top five pure water giants all chose to "respond" this summer to launch preferential promotions, and collectively reduced prices to enter the era of 1 yuan.
Image source: Meituan
Not only pure water, but also in the relatively high-end mineral water track, it has also begun to challenge the bottom line of low price, different from the battle of giants of pure water, the low-price challenge of the mineral water track comes from the channel self-operated brand.
From the overall perspective of the drinking water market, the market share of mineral water accounts for no more than 10%, and the momentum is still growing rapidly, but from the perspective of brand, only Jingtian Baisui Mountain is outstanding, accounting for 74% of the market share of mineral water, which also makes mineral water become a "sweet spot" for many channel enterprises to compete for layout.
Sam's self-operated mineral water, Dongfang selection self-operated mineral water is a best-selling product on both offline and self-operated APP, the former 300ml specification of 48 bottles, only 42.8 yuan, the latter 350ml unit price of 1.66 yuan / bottle. In September, Fat Dong's self-operated mineral water products were officially put on sale, with a single bottle with a net content of 360ml and a price as low as 1.2 yuan.
Image credit: Foodaily Homemade
As we all know, bottled water is a "handling" business, which does not seem to have particularly high barriers, but it has very high requirements for the operational efficiency of water sources, capital, production, channels, sales networks, dealer resources, and brands.
As the leader of the pure water market and the second leader in the bottled water track, this year, Cestbon actively hit the Hong Kong stock IPO, with the aim of financing to increase production capacity and strengthen the efficiency of the supply chain, expand the source of pure water and natural mineral water, so as to expand its market share.
The official website of Wahaha released the "Bidding Announcement for Freezer Maintenance and Market Launch Demand", involving the maintenance of 617735 freezers of different years and the bidding of 100,000 smart freezers, in order to increase the terminal channels.
In August this year, Baisuishan signed a contract with Hainan Wuzhishan production base, which invested 300 million yuan; If completed, this production base will be the seventh production base of Baisuishan in China.
Compared with the low-price life-and-death battle of the giants, the low price of 1 yuan on the channel side is considered by industry insiders to be a drainage strategy, relying on the advantages of the channel, through the topical low-cost products, not only can establish the image of the channel brand close to the people and cost-effective, but also attract consumers to buy other categories of goods in the store.
From a long-term perspective, low-cost bottled water is considered to be a giant game, without sufficient capital and strength support, without continuous and refined operation strategy, it is likely that it will not survive in the market for a long time.
Avoiding price wars, what else can brands do in the water business?
According to data from CIC, the comprehensive annual growth rate of China's packaged drinking water market from 2018 to 2023 was 7.1%, and it is predicted that the growth rate will reach 7.9% from 2023 to 2025, and the overall market size will grow from 215 billion to more than 300 billion.
Image source: CIC Consulting
According to the market share of the brand, the top five brands are Nongfu Spring, Cestbon, Baisui Mountain (Jingtian), Wahaha, and Master Kong, accounting for 23.6%, 18.4%, 6.1%, 5.6%, and 4.9% of the market share respectively.
Data source: CIC Consulting Image source: Foodaily homemade
According to the 2023 Global Bottled Water Industry Report released by the United Nations, China's bottled water sales rank high, but the per capita consumption is low; At the same time, China's bottled water consumption is affected by region, environment and consumption level, and the imbalance trend is obvious. Therefore, there is still a long way to go in terms of market education, mining scenarios, and geographical opportunities.
In the past, there was no shortage of cutting-edge and cross-border enterprises entering the bottled water track as challengers, but there were very few cases that finally shook the market pattern. Bottled water, can it only be a giant game in the end? How else can brands find a new way to open up new business in the bottled water market?
Looking at bottled water cases in the global market, Foodaily summarizes several common strategies.
1. Excavate characteristic water sources
From the perspective of water sources, volcanic water is a category of "new water" that has attracted a lot of attention in recent years.
Sairme, from Georgia, is a natural carbonated mineral water. The water comes from volcanic sedimentary rock formations deep in the earth's crust, and the water is saturated with natural carbonates and flows down as springs. Sairme is the oldest bottled water brand in Georgia, popular in Europe for its unique product efficacy (it can improve metabolism, prevent stomach and urinary diseases, and enhance human immunity), and is currently exported to 17 countries around the world.
Onsen Sui 99 (hot spring water 99) from Japan is also an alkaline volcanic water sourced from an underground hot spring in a volcanic area with a pH value of 9.9. The water source is located in Tarumi City, Kagoshima Prefecture (a famous volcanic hot spring area in Japan), and the local hot spring water is famous in Japan by word of mouth. From 2009 to 2012, the product won the highest gold medal of the World Quality Evaluation Conference for 4 consecutive years, and won the first place in the COSME word-of-mouth beverage category in 2018 and 2020.
Under this trend, Yili launched a volcanic mineral water product named "Yike Huoquan" last year, which originates from Changbai Mountain and Arshan, the source of volcanic rocks, and is purified by deep volcanic rocks, with five kinds of volcanic mineral elements (potassium, calcium, sodium, magnesium and metasilicic acid). This series of products is one of Yili's attempts to explore non-dairy business, which is still in the cultivation stage.
Image source: Sairme, Thermal Water 99, Ike Living Spring
2. Create subdivided categories and sell new water
Mining consumer needs from subdivided scenarios and creating new categories is the "new posture" used by many successful cases to enter the game.
"Cool white open" is a good example. In 2016, Jinmailang created the cooked water category "Liangbai Kai", which accurately corresponded to the needs of Chinese consumers to drink boiled water, and thus created a new category in the industry.
In 2022, the sales of Liangbaikai will exceed 3 billion yuan, and according to public data last year, some industry insiders estimate that the sales of Liangbaikai may be close to 4 billion yuan, becoming one of the bottled water products that continue to grow in the market.
In addition, from Chinese drinking tea extends to the demand for tea water, sports water based on sports scenes, and baby water due to the demand for brewing milk powder, all of which are successful cases cut by the scene. The amount of notes related to Xiaohongshu's "tea water", "sports water" and "baby water" has reached 6W+, 400W+, and 500W+ respectively.
Packaging is also one of the significant solutions to solve the needs of scenarios and create new categories.
This has already been certified on Nongfu Spring series products. The flute design of sports cap water, handle bottle, and baby water has been launched one after another, so that Nongfu Spring's water has been well received by many consumers.
Image source: Nongfu Spring
In the Japan market, Itoen, which has always been mainly engaged in the tea business, launched a mineral water product called natural water this year, and the packaging uses Itoen's patented frozen bottle (the bottle body will not be deformed after freezing), and the expansion rate after freezing is calculated in advance, positioning it as a quick thirst-quenching water drink.
Image source: Itoen
At the same time, with the enhancement of residents' health awareness, bottled water has penetrated into more aspects of family life. Large-pack water in family packs is also one of the future opportunities.
According to CIC data, medium and large sized bottled water will surpass the growth rate of other packaged water in the future, and will maintain a compound annual growth rate of 10.4% from 2023 to 2028.
Image source: CIC Consulting
However, at present, most of the medium and large size water is packaged in barrels, which has problems such as inconvenient dumping and difficulty in packaging recycling. Therefore, in terms of packaging, in addition to the common barrel packaging, there are also new BIB packaging forms.
BIB packaging, also known as bag-in-box packaging, is a container that puts a plastic bag of water in a box. The water is discharged through the pressure of the water itself, and the bag is automatically compressed after the water is discharged, which can isolate the air, prevent pollution, and ensure hygiene. In terms of use, there is no need for a water dispenser, and the use of supporting embolization can realize the pressing of water, which can meet the needs of convenience and hygiene at the same time.
On the one hand, the use of BIB drinking water packaging can save up to 80% of raw material consumption compared with PET bottles and other packaging forms, and the internal and external materials can be recycled, which can achieve resource conservation and lower carbon emissions, and on the other hand, it can save storage space and improve logistics efficiency.
This type of packaging has been successfully commercialized. In March of this year, Hongbaolai launched a fresh mineral water called Guanche BIB Lock, the water source comes from Changbai Mountain, 9.68L per box, and the product highlights are humanized packaging and fresh mineral springs. Foodaily also found in the Japan market that there is an 11.5L bag of Mt. Fuji natural water called "ふじざくら life water", which is also packaged in BIB.
Image source: Hongbaolai Beverages, Fuji Tourism Development Co., Ltd
In addition to packaging, with the further extension of consumers' health concepts, the health and functionality of water have also become one of the development directions.
Chlorophyll Water is a United States chlorophyll spring water, which is the first bottled water in United States to be certified by the Clean Label Project, and the added chlorophyll has antioxidant and detoxifying properties. The topic of Chlorophyll Wate has been mentioned more than 580 million times on TikTok, and the product has been installed in more than 240+ offline stores.
In the domestic market, there are similar products, as early as 2021, Bloomage Biotech launched a hyaluronic acid water called "Water Muscle Spring", which focuses on the beauty effect of hydration and moisturizing.
图片来源：Chlorophyll Water、水肌泉
Another potential category is alkaline water, which refers to bottled functional water with a pH value higher than 7 (pH above 7 is alkaline), which is divided into two categories: natural water source and artificially processed. Alkaline water is generally considered healthy because it balances acidity and alkali and neutralizes stomach acid (pepsin), thereby relieving acid reflux symptoms.
According to market research firm Zenith Global, bottled alkaline water is forecast to reach a value of $4.32 billion by the end of 2023. The leading brands in the European and American markets are Essentia (pH9.5), Core (pH7.4), Flow (pH8.1) and Alkaline88 (pH8.8). Although the main consumer markets are in Europe, America, Japan and South Korea, in recent years, a series of related products have also appeared in China.
ELECTRO X's natural drinking soda, with a Ph value of 8.8, revolves around the sports scene and highlights the taste of the product, pointing out that it has the effect of quickly replenishing electrolytes and reducing the burden on the wine table.
Coca-Cola's Chunyue also launched an alkaline sparkling water with a pH of 9.0.
Image source: ELECTRO X Grain, Chunyue
In addition, there is also a new category of zinc water, which is aimed at enhancing immunity and improving anorexia. Domestic Xiaoqu launched + zinc weak alkali soda. In the international market, Sweden brand Vitamin Well Active, France brand Vittel+, and Italy brand Acqua Sant'Anna have also launched zinc water products in recent years.
3. Play with marketing magic and achieve differentiation
The water business is inseparable from marketing, and it is at this point that differentiation beyond water sources is achieved.
Mountain Water, launched United States Liquid Death, focuses on punk, rock, and curiosity. The slogan at the time of the listing was "Kill Your Thirst". It is aimed at the needs of young consumers who want to drink water while drinking in a bar and who pursue a different niche.
The packaging is made of all-aluminum cans, printed with skulls, and the eye-catching logo of Liquid Death, which looks like a wine "not easy to mess with", but it is actually a bottle of pure water, which is full of contrast, which breaks consumers' perception of mineral water, and realizes the emotional resonance of the rebellious pursuit of people in the Z generation with a personalized attitude and reverse marketing, and caters to the consumption trend.
Image courtesy of Liquid Death
In addition, through variety shows, customized entertainment content, contrasting advertising, and reverse marketing, the brand has deepened the impression of teenagers on "cool" products, created a unique brand culture, and clarified the product concept of "don't be afraid, it's just water".
With this unique approach to marketing, the brand has surpassed $1 billion in business in less than a decade. This year, the company posted its third consecutive year of triple-digit growth, making it the fastest-growing water and iced tea brand in the United States, according to market research firm SPINS.
3 Summary
Entering October, the peak season of bottled water sales is about to pass, and it seems that the water drink market is going to be calm, but in fact, there is an undercurrent.
In the bottled water market, many brands have entered the game, and some brands have withdrawn. From water source, to packaging, to marketing, it can be used as a direction for water innovation. However, water is a business that requires heavy accumulation, and iron still needs its own hardness, so how to gain a firm foothold in the rising market will be a compulsory course for water beverage brands in the future.
The story of selling water continues, and it remains to be seen whether there will be emerging forces that will stand out in the future.
Reference content:[1] In the first half of the year, the revenue increased significantly, and Zong Fuli and the best Wahaha "came back". Food References[2] Bottled Water "Scuffle"| Tidal Business Review