Refreshing growth for oxygenated water
Japan increased by 45 per cent last year, but the market still
remains niche, claims Zenith International. And it is likely to
remain so until a major soft drinks group decides to get in on the
act.
The idea of infusing water with oxygen may seem odd, but this small segment of the bottled water market is showing rapid growth, according to a new report from drinks industry analysts Zenith International.
Zenith's report shows that the oxygenated water market in North America, western Europe and Japan reached 100 million litres last year, up 45 per cent on 2001, riding high on the wave of popularity for both bottled water and healthy drinks.
"As consumers embrace the virtues of hydration, oxygenated water has found an opening amongst the health conscious," commented Zenith research and development director Gary Roethenbaugh. "Offering a claimed energy boost, its main challenge is to sports drinks. Yet, although it is growing fast, this offshoot of bottled water remains niche - taking less than 1 per cent of total bottled water consumption in all countries except Canada."
Relatively expensive to produce, the consumer profile for oxygenated water tends towards middle or high income earners that are either gym members or frequent visitors to health food stores, Zenith said. Other outlets include small grocery stores, pharmacies, petrol stations, beauty parlours and nightclubs. Supermarket distribution is largely unexploited to date.
In terms of packaging, PET is the most frequently used format, although a few companies opt for glass to achieve a premium position and, arguably, to retain oxygen more effectively.
"At present two key factors are holding oxygenated water back," added Roethenbaugh. "First, product choice and availability is quite limited, particularly in major retail outlets. Secondly, no international soft drinks player has yet embraced the oxygenated water concept. Indeed, there is a degree of cynicism about its real effectiveness. But, on the other hand, both energy drinks and oxygenated water are perceived to work by their regular consumers."
Zenith concludes that oxygenated water will remain on the fringes of the mainstream bottled water market for some years to come, but believes that consumer support should sustain steady volume gains, enabling volumes to treble by 2007.
For more information on the 2003 Zenith Strategic Review on Oxygenated Water contact the company on vasb@mravguvagreangvbany.pbz.
