At the 2017 Packaged Water Industry Innovation Forum (PWIF2017) held in September, 22 industry experts provided in-depth analysis of trends in China's packaged water industry. Foodbev Daily, based on its observations over the past year, exclusively released eight major trends for 2017.

Trend 1: Segmentation

The classification of bottled water products is becoming increasingly detailed. According to food consulting firm Zenith International, the children's water market will grow at 7% annually until 2021, with the Asia-Pacific region leading globally. In the coming years, products targeting children aged 0-14 are expected to have significant growth potential. Children's bottled water is typically priced 20%-50% higher than regular water, offering higher gross margins. Nongfu Spring's baby water (12 liters) is priced at 88 yuan, roughly double the price of a 24-liter case of regular drinking water at 50 yuan. For businesses, this represents a relatively lucrative market. Nongfu Spring "Baby Water" "Due to concerns about obesity, parents are controlling their children's intake of sugary drinks," said Esther Renfrew, Research Director at Zenith International. "Children's bottled water is a trend the industry is sensing." In the international market, Nestlé and Danone's Evian have both launched children's water. "Nestlé Pure Life Kids" "Evian Kids Bottle" "Evian Mini Bottle" at 20 yuan per bottle An analyst from Innova Market Insights noted at PWIF2017: "Currently, there are waters targeting infants or people needing low-sodium intake. In the future, there will be waters for women, the elderly, and athletes."

Trend 2: Premiumization

Positioning premium water is becoming a new trend, including Nongfu Spring's high-end customized bottled water, VOSS introduced by Hua Bin Group, and Coca-Cola's Valser. Hua Bin Group VOSS Danone has also introduced AORAKI Extreme Water in China, with 500mL priced at about 8 yuan, placing it in the high price range for bottled water. AORAKI Extreme Water "Like other regions, Chinese consumers are increasingly choosing healthier beverages and drinking water. In the packaged drinking water market, demand for high-end natural water and imported water is growing," said David Roos, General Manager of Danone China Water Division. According to AFP, Danone announced the completion of modernization of its Evian factory in Haute-Savoie, the only one globally, and plans to invest a total of 280 million euros by 2020. Meanwhile, Nestlé, the world's largest bottled water producer, announced a plan called "Perrier Cap 2020" to invest 200 million euros to increase Perrier capacity. Under the plan, the production lines at the Vergèze plant in France will increase by 5, bringing the total to 14. On April 20 this year, Coca-Cola quietly launched Valser premium bottled water. Coca-Cola Valser Premium Bottled Water In February this year, PepsiCo launched a new premium bottled water, LIFEWTR™. Currently, LIFEWTR comes in two sizes: 770ml (suggested retail price $2.06) and 1 liter (suggested retail price $2.70). The 770ml bottle comes with a convenient sports cap. PepsiCo Premium Bottled Water LIFEWTR™

Trend 3: One-Time Use Barreled Water

At PWIF2017, several experts analyzed the trend of one-time use barreled water. Zhang Yi, Chairman of Shangheng Beverage, said: "Because the barrel is disposable, it is safer and more reassuring in terms of disinfection and shelf life. Disinfection is one-time, and shelf life is six months. How long can traditional barreled water last? It cannot achieve six months; at most two months." One-time packaging gives consumers a sense of psychological safety. Recently, Shenzhen Jingtian Food & Beverage Co., Ltd., which owns the Ganten brand, began selling 14.8L one-time large-packaged drinking water. In fact, since the beginning of the year, bottled water companies have been active: first, Nongfu Spring's 15L barreled water returned to the Beijing market, which can be directly placed on water dispensers; then C'estbon released a promotional video for its 4.5L purified water. In May, Wahaha also launched a new 4.5L purified water with exquisite packaging. Nongfu Spring 15L one-time barreled water and Ganten 14.8L one-time barreled water Due to costs of building factories, logistics, and barrel recycling in various regions, China's barreled water market is still dominated by regional small brands. Generally, the production cost of 15L one-time barreled water is between 5 and 6 yuan. Including freight and manufacturer profit, the ex-factory price should be at least 8 to 10 yuan to be reasonable. Wholesale to distributors and water stations at this price means retail prices must be 15 to 20 yuan to ensure distributors make a profit. C'estbon 4.5L Barreled Water According to Jiemian reporters, in the Beijing market, barreled water from Wahaha, Robust, Ganten, Nestlé, etc., is quoted to distributors at over 20 yuan. Many local regional brands price their barreled water between 15 and 20 yuan. In terms of cost control, big brands seem to have no advantage. C'estbon 4.5L Barreled Water Currently, wholesale prices for large-packaged barreled water among major brands are not significantly different. To capture market share first, major brands will likely engage in a price war in the barreled water market. Zhang Yi, Chairman of Shangheng Beverage, said: "My positioning of one-time 15L large-packaged water is not only to capture the barreled water market but also the packaged water market. It depends on how you do it."

Trend 4: Customization

Compared to regular drinking water, customized drinking water with exclusive corporate information displays additional company-related information. A bottle of customized water can showcase the company's brand image and culture, benefiting future brand development. Customized bottled drinking water for enterprises can effectively enhance corporate brand image, significantly reduce promotion costs, and provide favorable support for sustainable development. It offers customers more reliable and safer quality services. Anhui Tiandi Jinghua is a representative enterprise in customization. According to Anhui Tiandi Jinghua, the company customizes exclusive bottled drinking water, with professional design teams tailoring bottle caps, labels, and bottle shapes for clients. Customized mineral water does not enter supermarkets, bypassing offline channels, and is sold directly to customers. Such sales targets are mostly companies, institutions, and government agencies, with few individual customers. Although some branded drinking water companies also offer customized mineral water services, it is not their core business. Therefore, customized mineral water can be refined and specialized in niche areas, providing customers with more customized services. On the other hand, more and more leading brands are favoring commemorative bottles. Since 2007, French natural mineral water brand Evian has launched limited edition commemorative bottles for ten years. In 2007, when Lacroix first designed the Evian bottle, the design community was somewhat dismissive, but soon this expensive and beautiful bottle became a hit. Over the next decade, Evian frequently collaborated with the fashion industry, launching a delicately designed limited edition commemorative bottle with high-end fashion brands each year. In 2007, Evian and Christian Lacroix launched the first commemorative bottle. In 2016, Nongfu Spring's glass bottle natural mineral water released a commemorative "Golden Monkey Set" to celebrate the Lunar Year of the Monkey. In 2016, Nongfu Spring launched the Golden Monkey Set commemorative bottle. Trend 5: Cross-Industry and Sharing On April 15, 2015, Kunlun Mountain Snow Mountain Mineral Water and Didi Chuxing signed a strategic cooperation agreement in Beijing, announcing diversified in-depth cooperation. As leading brands in their respective fields, their deep cooperation will not only maximize resource synergy at the strategic level but also enhance brand influence and product user experience. Kunlun Mountain and Didi: Two Giants Cross-Industry Cooperation According to Beijing Business Today, on September 14 this year, the 350ml Kunlun Mountain Snow Mountain Mineral Water commonly used in Didi Chuxing was quietly "off the shelf," replaced by Yili 370ml natural mineral water. Similar to the previous Kunlun Mountain product, the Yili bottle clearly labels "Didi Chuxing," indicating it is a customized product for Didi Chuxing. Nongfu Spring collaborated with NetEase to release a specially packaged fruit-flavored beverage to attract Chinese fans of the game Onmyoji and seize market opportunities. In April 2017, Nongfu Spring launched lychee-flavored water. An analyst from Innova Market Insights noted at PWIF2017: "More and more video streaming companies are cooperating with packaged water companies, helping mutual integration and promotion. This is also a very good development trend for the future."

Trend 6: Functional Products

Aquiem is a water brand specifically designed for making coffee. A case of water (12 boxes, each 1 liter) costs $25.68. The water is produced in Miami and uses Tetra Pak packaging. "98% of a cup of coffee is water," said Frank Manale, founder of Aquiem, who believes water greatly influences coffee quality. As a coffee enthusiast, he would bring his favorite beans when traveling but found that due to different water quality, the coffee tasted different from what he had at home. He felt that tap water and ordinary bottled purified water could not meet his needs. Aquiem's Coffee Water Huiyuan Juice's Lejian Soda Water Hydrogen water popular in Japan

Trend 7: Smaller and Diverse Packaging Sizes

From the perspective of packaging trends, packaging materials account for a large proportion of the product. At PWIF2017, several guests believed that lightweight packaging is one of the trends in the packaged water industry. Zu Manyou, Sales Director of KHS Beverage Equipment (Suzhou) Co., Ltd., said: "In bottle design, reducing plastic use and lightweighting is a major future trend." Zu also said: "In our bottle design, lightweighting is not an easy path in China, but we hope to achieve a balance. Additionally, with the same bottle achieving the same effect, many bottles on the market have room for optimization. So we optimize through bottle design and preform design. Finally, regarding environmental protection, it brings significant economic benefits to companies. If you produce a lot, being lighter saves some profit, and this profit is considerable. So I hope everyone enhances environmental awareness and gradually makes efforts." Image source: CBE Sales Director Zu Manyou's speech at PWIF2017 Lightweight packaging can save packaging and transportation costs. For resource conservation, many flexible packaging products are not biodegradable but can be recycled. All flexible packaging can be pre-made or formed in-line; in-line forming is the most efficient and has the highest success rate, ensuring no secondary contamination. In terms of distribution channels, flexible packaging has the lowest transportation costs, whether for raw materials or finished products. In terms of energy saving, flexible packaging production consumes the least energy. In terms of carbon emissions, saving one kilowatt-hour of electricity reduces carbon emissions by 0.63 kg. For current environmental issues, we can promote flexible packaging globally. In recent years, China's bagged water industry has made significant progress. Yue Longquan Bagged Water Image source: Yue Longquan official website

Trend 8: Innovative Packaging

According to an analyst from Innova Market Insights at PWIF2017: "Packaging for unflavored bottled water is polarized: either simple or luxurious." Jinmailang Liangbai Kai Nongfu Spring Commemorative Edition Ju Xinyan, Executive President of Huiyuan Group's Water Division, introduced: "Mulan Mountain Spring is an adorable product. Many consumers love it at first sight. When drinking, they experience joy and cartoonishness." Huiyuan Mulan Mountain Spring Brands differentiate through packaging and design, with designed packaging increasing visual differentiation. Almost all brands recognize the importance of packaging design. In the future, innovative packaging will be one of the key factors for brand success. Source: Food & Beverage Industry Micro Journal (ID: FoodBevDaily) 2017 (3rd) FMCG + Internet Conference will be held in Chongqing in November 2017. The conference will closely focus on the theme "New Forces, New Ecology," inviting 1000+ distributors, 500+ brand owners, 200+ B2B platform founders, and 100+ investment and financing institutions to jointly explore new chapters of cross-industry integration! Click the link below to review the highlights of the 1st and 2nd FMCG + Internet Conferences: 2016 "FMCG + Internet" Summit Forum -END-