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Alkaline water market potential

Virtually unheard of 10 years ago, alkaline water is on track to be a multi-billion-dollar global business by 2023. But could this be undermined by shaky scientific claims?

Drinking alkaline water, which has a pH level of above seven and up to 10, is said to help balance the body’s natural pH levels, particularly when an individual eats a diet rich in acidic foods, and to re-hydrate the body faster after exercise, allowing for lost minerals to be more rapidly replaced.

Proponents say it provides energy, contributes to the body’s general wellbeing, prevents cancer and diabetes, and prevents the signs of ageing.

Alkaline water’s nutritional claims are impressive but unsubstantiated. The sales, on the other hand, are very real.

Between 2013 and 2018, the volume of alkaline water sales rose from 357 million litres to 635 million litres globally, representing a compound annual growth rate (CAGR) of 12.2%, according to market research company Zenith Global. It predicts sales will continue to rise, outpacing the overall premium water market, to reach a value of US$4.32 billion by the end of 2023.

Following the success of botlled water

So, what is responsible for this success? Zenith Global believes alkaline water players are riding on the wider success of the bottled water category and, more specifically, its premiumisation.

With levels of obesity and type-2 diabetes rising around the world, and governments taking measures to reduce the consumption unhealthy foods from taxes on sugar-sweetened beverages to front-of-pack warning labels, consumers are looking to make healthier food and drink choices. 

“In this context, alkaline water offers an elevated proposition over and above plain bottled water,” writes Robin Bell, senior consultant at Zenith Global, in its 2019 market report Global Alkaline Water. “Its appeal is strongest among those who are already convinced of the health benefits of greater water consumption in replacement of other soft drinks. They are motivated by the opportunity to further benefit their immediate and potentially longer-term health by consuming alkaline water.”

The success of the segment is also part of the wider demand for energy, according to Julian Mellentin, founder of food consultancy New Nutrition Business. Consumers are increasingly looking for ingredients that give them an energy boost and a wide range of products have emerged to meet this demand, from caffeinated snack bars to bulletproof coffee. Alkaline water brands, which often emphasize their product’s energising nature, are tapping into this trend.

Bad science, good marketing?

The segment has attracted criticism form scientists and medical professionals for peddling marketing spin over science-based substance. But many analysts do not see the lack of scientific evidence as a barrier to alkaline water’s success going forward.

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Bell told Fi Global Insights: “Consumers have to have a ‘reason to believe’ in order to purchase and with alkaline water I think they do. If a brands’ targeting and messaging is right for its audience, then consumers are willing to believe that it will be beneficial for their general health, fitness, athletic performance, sports recovery, etc. Athlete and celebrity endorsement counts for a lot in this self-improvement market, especially in the US.

“Providing brands continue to communicate effectively with their consumers and sell the ‘benefits’ of alkaline water, I don’t think the lack of scientific evidence will have a substantial impact on the category.”

A lack of advertising standards regulation in the US means brands can claim benefits without tangible independent proof of their claims. Nevertheless, a growing number of consumers are becoming wiser to this and are starting to tune out of messages, prompting some cautious companies to change their messaging.

“As a consequence, brands are subtly moving to a position where they rely less on health claims and more on an aspirational premium brand positioning and talk more about brand values rather than definable measurable benefits of consumption,” said Bell.

In Europe, where strict regulation prevents food and drink brands from making unsubstantiated health claims, alkaline water brands face a more challenging environment and should establish a lifestyle positioning with a strong visual identity from the outset, he added.

The biggest markets

Just two countries accounted for 96.6% of all alkaline water volume sales in 2018: Japan, where the category originated, and the US, where it has gone from being virtually unknown 10 years ago to a US$602 million segment, according to Zenith Global figures.

Although there are many small brands, the US market has attracted the attention of giant multinationals that have entered both through acquisitions – soda giant Keurig Dr. Pepper bought category leader Core for $525 million in 2018 – and launches, such as Coca-Cola’s Smartwater Alkaline, an ionised water with a pH of 9, that it launched the same year.

In Europe, on the other hand, alkaline water is still in its infancy with only seven brands operating as of 2019. There is a “a very low level of awareness among the general population” of alkaline water, according to Zenith Global, although this is rising, and the market research firm sees long-term promise in Western Europe.

Expect further premiumisation going forward

As the more established markets move into the growth phase, Bell expects players to try to differentiate themselves by leveraging their sourcing and provenance to create a premium image.

The exact positioning varies depending on the geographical region. In China, for instance, premium bottled water brands often use the altitude of the mountain source as a differentiating factor. In Europe, Scandinavian origins often connotate a lack of pollution.

For alkaline water, brands will likely focus on the difference between bottled waters that have a naturally alkaline pH value thanks to their mineral content from the source and ionised waters that have been treated to increase either the pH level or mineral content.

“There will be a clearer communication of the benefits of each and a deeper understanding from consumers,” said Bell.

TAGS: Trends
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