Bottled water to overtake soda as No. 1 drink by 2016

Driven by consumer desire for a healthier lifestyle, bottled water will overtake carbonated soft drinks as the No. 1 packaged beverage of choice among U.S. consumers, according to new data from the Beverage Marketing Corporation (BMC). Sales of bottled water in 2014 are expected to grow to $13 billion, an increase of 6.1% from 2013.

According to BMC, bottled water has increased its “share of stomach" of the overall beverage market from 14.4% in 2009, to 17.8% in 2014. With 20.9%, carbonated soft drinks currently holds the No. 1 position; however, bottled water is predicted to the No. 1 packaged beverage sold in the United States by 2016.

“While other beverages struggle to gain or maintain market share, bottled water is expected to have a 7.4% increase in 2014—that equates to 10.9 billion gallons," said Gary Hemphill, BMC managing director of research. “Every segment of the bottled water industry is growing, and we consider bottled water to be the most successful mass-market beverage category in the U.S. In fact, single-serve PET plastic bottled water outperformed all other beverage categories, posting an increase of 8.4%."

Historically speaking, bottled water has been on a long-term upward trajectory. Between 1976 and 2013, bottled water grew at a compounded annual growth rate of 9.5%, outdistancing every other beverage category. In 1976 every American drank 1.6 gallons of bottled water—that figure is projected to reach a record 34.2 gallons.

According to Chris Hogan, IBWA vice president of communications, bottled water already outsells retail soft drinks in 17 major cities, including New York, Boston, Los Angeles, San Francisco, Las Vegas, Houston, Miami, and Washington, D.C. As overall soft drink consumption continues to decline, BMC projects that more cities will join that list.

This latest data supports previous market data reinforcing growth in the water category. In 2014, data from Zenith International found bottled water and tea are driving growth in the global beverage market, contributing 55% to the market growth over the past five years. According to Zenith’s globaldrinks.com online database, tea is by far the largest of the 24 drinks categories in the 72 country database and saw consumption growth of 62 billion liters between 2008 and 2013. Bottled water, the second-largest market by volume, increased sales by an even higher 83 billion liters over the five years. Milk gained the third-biggest volume growth of 20 billion liters, followed by coffee on 16 billion liters.

“People choose bottled water for a variety of reasons," said Hogan. “Many consumers are making healthier choices for themselves and their families, and they know that safe, convenient, refreshing bottled water has zero calories and is the healthiest option on the shelf. They also appreciate the reliable, consistent quality of bottled water. And, despite continued efforts by some activist groups to discourage people from drinking bottled water, consumption and sales of this healthy product are increasing as consumers make their voices heard in the marketplace."

So as consumers continue to reject carbonated soft drinks and embrace bottled water, the category is poised to become the dominant non-alcoholic beverage. Healthy living and the obesity epidemic have been driving factors in making bottled water the zero-calorie/ultra-low calorie beverage of choice for millions of consumers. What’s more, marketers are launching new bottled water products with bold colors, exotic flavoring and fashion-forward packaging.