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UntitledWith the summer sun heating up much of the country, there may be no more important reminder for your shoppers this week than this: Stay Hydrated.

Most know that water is the beverage of choice when it comes to refreshing, and it’s interesting to note how this message has permeated the American mindset in recent years.

There has been dramatic change in American consumers’ beverage consumption habits in the last decade. Between 2003 and 2013, bottled water consumption increased 10 gallons per person per year, while carbonated soft drink consumption decreased 13 gallons per person per year, according to Beverage Marketing magazine. In 2014, bottled water consumption in the U.S. stood at 34.2 gallons per person.

Humans consume a total of 192 gallons of beverages per year, a number that has remained static over time. From Nestle Waters North America, here are some statistics on the changes in how various beverages divided that “share of the stomach” in 2014, as compared to 2004:

  • Consumption of tap water remained stable at about 13% of that total, as did consumption of milk at about 9.5%.
  • Biggest increases in “share of stomach” beverage consumption during that ten year period: Tea, increasing from 4.5% to 6.1%, and bottled water, increasing from 12.7% to 17.8%.
  • Largest drops in “share of stomach” beverage consumption: Fruit drinks, from 7.6% to 5%, and carbonated soft drinks, from 27.9% to 20.8%. Coffee consumption dropped slightly, from 11.6% to 10.7% and alcoholic beverage consumption declined from 13.1% to 12.6%.

If current trends continue, bottled water consumption will exceed carbonated soft drink consumption in the U.S. for the first time in 2016. Bottled water is already the number one packaged beverage among 13 – 24 year old consumers and in the next decade, consumption is expected to be 1.5 times what it is today.

Also keep in mind: Bottled water is the most affordable packaged beverage option, less than half the price of carbonated soft drinks. Bottled water is one of few products that allow shoppers to trade-up to a healthier product, at a lower cost.

What does this mean for your store?

  • Bottled water makes up 11% of all beverage revenue in retail and 30% of all beverage profits in U.S. grocery. It is number five in center store category profit dollars, after bread, snacks, cereal and candy.
  • 5 billion cases of bottled water will be sold in 2015, according to modeled estimates. By 2024, that number is predicted to be 5.6 billion cases.

The bottled water industry saw 4.4 million new sparkling water households in the last 5 years, and predicts 5.8 million new sparkling water households in the next 5 years*. New households will drive sparkling growth.

These numbers will be beneficial to retailer profit numbers. Compare.**

Soft Drinks Still Water Sparking Water (Carbonated)
Retail Price per Gallon $3.31 $1.34 $4.89
Retailer Margin 9% 32% 36%
Retailer Profit per Gallon $0.30 $0.43 $1.76


* Nielsen Market Structure November 2013

** Total US Food Adjusted Gross Margin Willard Bishop 2014

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