Recent times have spectated the shifting paradigms of consumers’ predilection for functional beverages, away from carbonated and soda-immersed drinks, leading to the popularity of the niche innovations, such as ‘fruit-infused water’. Since the trends of fruit-infused water are found to resonate well with the millennial populace, producers focus on the millennials’ favorite while introducing new line-ups, combining two or more fruits such as apple, mango, orange, pineapple, strawberry, watermelon, berry, and citrus.
As these flavors are labelled as ‘organic’, fruit-infused water has been marked safe for consumption by regulatory authorities, such as United States Department of Agriculture (USDA) Organic, which is likely to drive high penetration in consumers’ space. In addition, the low-calorie consumption trend penetrating deeper in the beverages sector, in addition to detox drinks meant for weight loss and cleansing, are likely to upkeep the sales of fruit-infused water in the future.
While still young, the fruit-infused water market possesses enormous potential, the key trends to which have been recorded and analyzed in an exclusive study published by Persistence Market Research (PMR). The study is intended at enabling stakeholders to make well-informed decisions and scramble towards a higher market share.
Charting the Evolution of the Fruit-infused Water Market
The image of healthy and flavorful water has been breaking grounds in the consumers’ space; however, the popularity gained by the packaged drinking water in 1977, in the U.S., inspired producers to capitalize on the evolving preferences of consumers and introduce fruit-infused water. In 2018, ~2 billion liters of fruit-infused water was sold, which corresponds to a value of US$ 10 billion.
In recent times, functional properties of fruit-infused water have positioned it as a favorable choice among the lactose-intolerant and GMO-allergic population, which widens the consumer base for the product. With the increasing cross-border trade activities, exotic as well as seasonal fruits are available round the year, which upholds the streamlined supply of raw materials required for the production of fruit-infused water. However, the simplicity of infusion process has been instigating consumers to prepare fruit-infused water at home, which is likely to pose a challenge to the sales. In addition, concerns apropos of the carbon footprints are likely to lead vendors to rethink the packaging of fruit-infused water.
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Revenue Shares of Still Flavored Water to Sparkle
Once found only on the shelves of health food stores, organic food and beverages are now a routine feature in supermarkets and hypermarkets, and are fast-replacing the ones developed using conventional farming practices. However, the high price point of organic fruit-infused water is likely to benefit conventionally produced flavored water.
With the tangy flavor and abundant health benefits, sales of citrus fruits are likely to remain high for the preparation of low-calorie fruit-infused water; however, strawberry-flavored water has been increasingly becoming popular, which will lead to the introduction of new products. In terms of products, still water is anticipated to contribute significantly to the growing market size, as consumers evince a liking for non-carbonated beverages; however, sparkling flavored water has been frequently chosen over still flavored water in HoReCa (Hotels, Restaurants, and Cafes) segment, as these distribution channels intend to distinguish their offerings.
Compared to other regions, the food and beverages consumption pattern observed among the European population has been on a healthier side. In addition, vendors of the fruit-infused water market scramble towards the East Asian market, which holds significant revenue shares in the global food and beverages market.
Key Strategies to Squeeze More Profit out of the Fruit-infused Water Market
- Capitalize on Seasonal Demand
While fruit-infused water can witness year-round sales, springs and summers record the highest consumption rate, owing to the need of consumers to stay hydrated. This surfaces a profitable opportunity for market vendors to prepare their inventories right before the onset of summer to capitalize on the seasonal demand.
- Replace Plastic Bottles with Metal Cans
As the stringency of environmental regulation turns up by a notch on a frequent basis, plastic as a packaging material is likely to be replaced by environmentally-benign materials. Foreseeing the future, vendors can shift their packaging processes away from plastic materials to metallic cans as a measure towards sustaining the environment and, in turn, their businesses in the long run.
- Introduce New ‘Combinational’ Flavors
Since fruit-infused water landscape continues to be operated by numerous players, product differentiation can turn out to be a key strategy can bring brand loyalty without the threats of substitutes. On similar lines, vendors of fruit-infused water market can introduce new flavors by combining two or more fruits to position their brand at a distinguished position. Vendors can zoom in their focus on consumers to comprehend their needs and develop flavors by keeping consumers at the center of the flavor innovation.
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Fruit-infused Water Market Amidst Intense Competition
The fruit-infused water market spectates intense competition with numerous players at play. Collectively, the leading players functioning in the fruit-infused water market secures ~40-50% of the market share with product differentiating being their key strategy. These players include:
- Nestle Group
- PepsiCo Inc.
- The Coca Cola Company
- Pepper Snapple Group
- Treo Brands LLC
With the landscape being strictly scrutinized for environmental sustainability by the government bodies, this batch of players zero in their focus on the packaging materials and make as minimal use of plastic as possible. For instance, in February 2018, Nestle Group announced the launch of new packaging for its six brands under the bottled water segment. In addition, in February 2019, the company introduced new flavors – Lemon, Lemon Lime, and Zesty Lemon – to its portfolio of Poland Spring Sparkling range.
The regional players; however, hold ~20-35% of the market share, which include –
- Hint Inc.
- Core Nutrition, LLC
- JUST Goods, Inc.
- Eslena LLC
- Propel Water
The focus of regional players is more intense at the production-side and develops products by prioritizing the evolving preferences of consumers. For instance, Hint Inc. invests in the development of fruit-infused kosher certified, vegan, gluten-free and non-GMO products. In addition, the company boasts its digital presence on the popular social media channels, where it directly establishes communication with its consumer to create awareness apropos of its portfolio.
