Scope for growth in the trade's water margins
"Our advice to licensees looking to maximise the profitability of the soft-drinks category is to take a close look at which sectors and brands are growing within the soft drinks market and to make sure that these are well represented in their range." So says Karen Salters, marketing manager at Beverage Brands, which produces Caledo-nian Clear a range of flavoured sparkling spring waters. Flavoured water currently generates £7m worth of sales in the on-trade, but it could be could be worth a lot more, Salters believes. In the take-home sector, flavoured water sales hit £79.4m last year, with volume sales up 15%, thereby demonstrating there is a huge potential for growth in pubs and bars. Salters comments: "Changing consumer lifestyles over the past couple of years has been a major factor in contributing to the growth of the bottled and flavoured water sector. "People don't always want to drink alcohol when they are out socialising and pubs have to embrace this by offering more choice. "With consumers increasingly looking for healthier options, they are now tending to favour bottled water over traditional soft drinks, but this isn't being reflected in the range stocked behind the bar. "Research has shown that Caledonian Clear is particularly popular with 25 to 35-year-old females. It also has a strong appeal for people who are looking for something non-alcoholic and interesting to accompany their lunchtime meal, so it sells particularly well in food-focused pubs. A 330ml bottle will typically sell for between £1.20 and £1.80 in on-trade outlets." Caledonian Clear is available in five flavours Arctic strawberry, summer peach, orchard apple, spring raspberry and wild blackberry. The brand is being supported during 2003 with sampling activity, point-of-sale material, and added-value promotions such as four-for-three deals through on-trade wholesalers in the spring and summer months. Fellow supplier Strathmore is also confident that the water market is on the up and says "judging by the historical trend and with lots of room for growth, it is possible that the flavoured water market could double in the next five years". Strathmore, which lays claim to being the largest bottled water supplier to the on-trade and is part of the Matthew Clark portfolio, says growth is being driven by a variety of reasons:
innovation in flavours and packaging
the right proposition for retailers and consumers
deeper understanding by consumers of the need to drink more water to add health and concentration levels
people seeking alternatives to soft drinks and targeting drinks that have low additive and calorie levels. Strathmore's range comprises still, sparkling and flavoured waters in three different packaging formats 330ml, 750ml and one litre bottles. Three flavours peach, blackberry and apple are available in 330ml sparkling water format. Further proof that the water market is buoyant can be seen in an £11m investment carried out by Macaw of Nelson, Lancashire. The money was spent on "sterile-fill" equipment to cope with bottling of Macaw's three new ranges of drinks. The three: are H2 Water (a preservative free range of still, fruit-flavoured drinks); H2 Sport (an isotonic energy drink); and H2 4 Kids (children's fruit drinks available in three flavours apple, blackcurrant and orange). All three have a six-month shelf life and are available in 500ml PET (plastic) bottle formats. Recommended retail prices are 79p for H2 Sport, 79p for H2 4 Kids, and 59p for H2 Water.
