analysis by Peter Robinson Remember when the idea of paying for water would have seemed laughable? The remarkable success of bottled waters is now a fact of life. But why are people so prepared to buy water? Concern about health and the purity of what we eat and drink is, of course, a key driver of sales across grocery these days. That means mineral water has become the fastest growth area of the soft drinks market. Richard Hall chairman of research consultancy, Zenith International, says: "This is all due to changing lifestyles, increased availability, strong marketing, and improved affordability. Additionally, bottled water is pure and simple, and the drink two litres a day message is also helping momentum." Last year was an important turning point in bottled water's development, says Hall. Although the summer weather was poor, bottled water achieved its best year ever. "A cool glass of bottled water is no longer something we suddenly reach for when the weather is hot. It has now become part of general lifestyle drinking patterns." You might think it would be difficult to differentiate a brand of bottled water, since water is our most basic commodity. But source, branding, packaging, marketing and, of course, price, play crucial roles. Hall says: "The leading brands have been highly effective in establishing distinctive identities, and supermarkets have been strong in promoting own label and linking a source with their brand name." Scott Sloan, Perrier Vittel's new UK md, has travelled the globe selling bottled water. He says the market's growth, albeit at different rates, is being seen worldwide. "Growth is not isolated to certain regions, though some markets are obviously more mature. The UK's value growth of 14% to 15% in still water is consistent with other emerging markets, with per capita consumption still fairly low vis-à-vis continental neighbours. But overall, unlike any other category I know, we are seeing sustained growth. You can plan on that for the next 10-20 years." He emphasises, however, that brands must find new and relevant ways to bring innovation and stimulation to the market. Spadel is certainly doing that, developing a new 1.5 litre bottle for the still version of its Spa brand made from 25% recyclable material. Sales and marketing manager Chris Garbett says the new bottle not only enhances visual and tactile appeal and maximises shelf space utilisation, but it is very much in tune with consumer concerns relating to the environment and new UK waste packaging recycling legislation. Danone Waters (which changed its name from Evian Volvic earlier this year) launched Activ' bottled water with calcium in January. Marketing director David Graham says: "Activ' offers a tangible benefit for people who did not previously buy bottled water, and has particular appeal for families with children." He points out that, despite the growth in bottled water, there are still 28 million non-users, so there is room to develop new products to introduce new users to the market. For this reason the Activ' launch has emphasised free trial packs and tastings. Graham sees plenty of scope for expansion of the bottled water sector and says: "We've just seen the tip of the iceberg in growth in the UK so far since in terms of per capita consumption, it is six to seven times higher in some parts of Europe." But one of the most basic tasks for retailers is simply meeting current demand. Graham says: "Growth in demand is outstripping the speed retailers can increase the size of shelves. By the middle of the day supermarkets can be shopped out, especially in seasons of peak demand." Marketing manager at Ben Shaws, Moira Rigby, believes UK consumers need assistance to develop more knowledge of the different types of bottled water: "We have been offering wine-like shelf panels, giving information about the content and characteristics of the water, what the various minerals do, and on what occasions they are drunk." Ben Shaws of Huddersfield has the Pennine and Fountain Head spring water brands and became part of the Belgian Chaudfontaine Group in 1998, launching the Chaudfontaine brand in the UK earlier this year. Rigby notes the increasing popularity of six packs, but says there is a weight problem. They are heavy to carry. For this reason, Ben Shaws is talking to dairy companies with a view to expanding home delivery. She says net grocery sales could also stimulate home delivery of bottled water. Own label is also seeing heady growth. Robson Conway, md of Hazlewood Foods' Campsie Spring, says: "Own label packaged water increased its share of the total bottled water market from 30% to 33% during 2000, demonstrating quite clearly the continued buoyancy in this sector." Campsie Spring is the UK's largest supplier of own label natural mineral water and saw a rise in its production last year of 21% to 107 million litres. While supermarket own brands have been taking off, Liz Breckenridge of Highland Spring says many consumers prefer premium brands they know and trust, and can be highly brand loyal. The Scottish brands in particular have been successful in establishing brand identity and challenging overseas brands. Breckenridge says research indicates British consumers class Scotland as the producer of the purest natural mineral water. Highland Spring has refreshed and accentuated its tartan packaging in line with this. The redesign forms part of a £4.5m brand support programme which ties in with sponsorship of Team Highland Spring which features world class snooker achieving national and international coverage. Another Scottish brand, Gleneagles Spring Water, has doubled turnover since 1998. MD Helen Lamont says: "The increasing popularity of mineral water is reflected in people's growing perception of it as a commodity. In grocery, the trend appears very much to be towards multipack buying with 1.5 litre six packs and 2 litre four-packs all doing well. On the impulse side, our 500ml g water' pull-push top PET bottle is proving our most popular size for people on the move." Strathmore, another Scottish brand, has recently launched two new springwater multipacks ­ a 1.5 litre PET six pack for the multiple sector and a 12 half litre PET pack for the convenience/impulse market. {{FOCUS SPECIALS }}