In 2016, the global non-alcoholic beverage market was valued at $967.3 billion. From 2017 to 2025, this market is expected to grow at a compound annual growth rate of 5.8%. Growing concerns about obesity and health awareness are expected to drive growth in functional beverages and bottled water products, while dampening demand for carbonated soft drinks. Global non-alcoholic beverage sales by category. Image source: Grand View Research. Under the bottled water category in the Nonalcoholic Beverage Market Analysis report, there is a sub-segment called flavored water. According to Medical-Dictionary, it is defined as a water-based beverage containing a range of ingredients, including natural or artificial flavors, sugar, sweeteners, vitamins, minerals, and other 'enhancing ingredients,' with lower calories than comparable soft drinks. In consumer experience, this may be a nearly transparent, light-tasting, refreshing soft drink. According to Euromonitor International, the global flavored water market grew from $6.5 billion in 2013 to $10.3 billion in 2018. In the U.S. alone, sales nearly doubled, jumping from $1.3 billion to $2.5 billion over the same period. Last month, Turkey Hill Dairy launched a flavored water called Trace of Tea, which has a hint of tea flavor (from tea essence). This zero-calorie beverage comes in four flavors: black tea, mint black tea, green tea, and lemon green tea. According to the official website, Trace of Tea is an ideal alternative to sugary drinks such as purified water, soda, juice, and energy drinks. It is crisp and refreshing, effectively hydrating, and suitable for work or study places, gyms, spas, or entertaining guests. Image source: Turkey Hill Dairy Twitter. In fact, as early as around 2014, several popular flavored waters appeared in China, such as Hai Zhi Yan, which achieved annual sales of 2 billion yuan. It was the first product from Uni-President to sell over 1 million cases in its first month since entering the mainland market 22 years ago. Does flavored water have more development opportunities in China in the future? **-01-**After more than a decade of growth, what is the current state of the flavored water market? Indeed, consumer demand for healthy, tasty, and functional beverages has stimulated the flavored water market. Abigail Storms, Vice President at food and beverage ingredient supplier Tate & Lyle, believes that the flavored water segment began to emerge about 10 years ago. However, in the early years, flavor options were relatively limited. According to Euromonitor International, rising stars in the global flavored water market include mango, strawberry, watermelon, and blackberry, with no fewer than a dozen options now available. Flavored water emphasizes natural health, no added sugar, balanced pH, and aligns with popular dietary trends such as ketogenic, paleo, and Whole30. Euromonitor research analyst Jarzabek said, 'Many new flavored water brands, in addition to being naturally free of calories and sugar, add value through natural or added minerals.' The entire flavored water market is changing, with categories moving toward functionality, lower sweetness, and sustainable development. She explained, 'The use of vitamins and minerals is already very common, and functional flavored water is still an evolving category, with vegetables and herbs being drivers of health-focused innovation.' On websites like Tesco and Walmart, there is a dedicated flavored water category, but on Chinese online shopping platforms, this category is rarely set up separately. Naturally, the penetration rate of flavored water is not as high as that of unflavored bottled water. According to a 2015 Mintel report, 58% of respondents had drunk flavored bottled water, while 97% had drunk purified water and 96% had drunk bottled water. In 2014, the Chinese flavored water market saw a boom, with many brands seeing development opportunities for this new category in China. Suntory's purified water brand 'Suntory Natural Water' launched an orange-flavored water, and subsequently introduced peach, yogurt, and lemon tea flavors—these are the predecessors of products like Suntory Qinru Water and Qintao Water sold domestically today. From January to July 2015, FamilyMart's flavored water sales grew 20% year-on-year, accounting for 15% of total beverage sales, with Suntory being the best seller, selling over 30 bottles per store per day. Image source: Taobao 'Wang Feiji Sells Snacks'. In April of the same year, Uni-President launched Hai Zhi Yan, the first sea salt fruit-flavored beverage in China. Once launched, it quickly gained popularity among consumers, selling 600 million yuan in 2014 and exceeding 1.2 billion yuan in the first half of 2015, with annual sales exceeding 2 billion yuan, leading a wave of light-flavored beverages. Image source: Tmall 'Yaldisi Food Specialty Store'. Kangshifu subsequently launched 'Hai Jing Ning Meng', which also contains sea salt elements, with a fresh and transparent packaging. Image source: JD.com Kangshifu flagship store. Coca-Cola launched the 'Light Replenishment' series for its Aquarius product, targeting young urban office workers, emphasizing daily hydration and nutrient replenishment. Image source: Le Market Weibo. Uni-President's Shui Qu Duo, with a lactic acid bacteria flavor, is fermented from Lactobacillus LV108 from Bama, the longevity village in China. It is transparent like water but tastes similar to yogurt, light and mild. The selling point of Shui Qu Duo is 'Let water have a slight yogurt taste, say goodbye to blandness,' and it also promotes digestion and boosts immunity. Image source: JD.com Uni-President flagship store. Nongfu Spring launched fruit-flavored water beverages in 2016, with four flavors: lychee, lemon, grape, and pomelo. The new products inherit Nongfu Spring's consistent semi-transparent packaging style, with a half-fruit pattern immersed in the liquid, fresh and bright. The product is positioned as 'delicious water, fruit-flavored beverage,' mainly targeting the post-90s and post-00s young consumer groups. Image source: Nongfu Spring. Mintel's 2018 China Bottled Water Report pointed out that in 2016, 60% of people had drunk flavored water, a surprising increase from 30% in 2015. Additionally, Mintel's Global New Products Database (GNPD) revealed that in 2017, the number and market share of flavored waters with low/no/reduced (L/N/R) sugar labels in China increased. In the 2017 global flavored water market, flavored waters claiming L/N/R sugar accounted for 32%, up from 23% in 2016. This proves that healthy flavored water has a certain market. Beckett, Associate Director of Food and Drink at Mintel, believes that flavored waters with low/no/reduced sugar labels can attract consumers who want to quit sugary drinks but still retain a hint of flavor, thereby driving growth in the broader bottled water market. 'When it comes to sugar in beverages, the loss of carbonated soft drinks (CSD) is the gain of flavored water,' he said. **-02-**How did 'flavorless' water become popular?
1. Softer soft drinks—rich and mild flavors
Consumers want to quench their thirst but find plain water too bland. At the same time, health is a driver. Flavored water is a 'softer' soft drink with a fresh taste. Jarzabek said, 'Many consumers use flavored water and flavored sparkling water to replace other soft drinks because of the variety of flavors, and it also allows consumers to avoid the sugar and calories added to other carbonated drinks and juices.' Abroad, Talking Rain's Sparkling ICE was one of the first sparkling water alternatives to attract consumer attention. Since then, sweetness in flavored water has decreased, incorporating botanical extracts or subtle scents into natural flavors, with packaging reflecting this characteristic. Today, Talking Rain offers 16 fruit-flavored waters with additives such as sucralose, a small amount of juice, natural colors, flavorings, vitamins, and antioxidants. Recently, the company launched its first caffeinated products, Sparkling ICE + Caffeine, in blackberry, blueberry, three citrus, strawberry citrus, and orange passionfruit flavors. Image source: Pinterest. Another leader in the flavored water market is Hint. Founded by Kara Goldin in 2005, the company now offers distilled spirits, sparkling wines, and caffeinated distilled spirits in flavors such as pineapple peach, apple pear, mango grapefruit, and lemon chili. This year, Hint added Ginger Sparkling to its product lineup. The company spent over a decade perfecting the formula to capture this bold, spicy aroma. Goldin noted at the launch, 'Ginger has many nuances. This time we finally got a flavor right.' Image source: Milled. Perrier's Perrier & Juice also launched beverages, characteristically blending its mineral water with fruit juice, sugar, and natural flavors. The drink is available in strawberry + kiwi, peach + cherry, and pineapple + mango flavors, with real apple and lemon juice. Each 8.45-ounce 'slim' can contains only 45 calories, while each 11.15-ounce 'smooth' can contains 60 calories. Image source: Perrier official website. Emphasizing clean and natural is core to many successful brands. Keera Perumbala, Vice President of Taste at Sensient Flavours, said, 'Many consumers perceive flavored water as 'fresher, fuller, and more delicious.' Clean labels create a more natural sensory experience.' When it comes to clean labels, it's hard to find a cleaner formula than Spindrift's fresh-squeezed fruit sparkling water. Founder Bill Creelman grew up on a farm in Massachusetts, accustomed to eating fresh, unprocessed foods. In 2010, he experimented in his kitchen to create a fruit sparkling water combination. Now Spindrift's Whole30-approved sparkling water comes in 12 flavors with fewer than 15 calories per 12 ounces. Image source: Vinepair. From fresh fruits, botanicals, and ginger to functional ingredients, the benefits of being healthy and delicious are enhancing the appeal of flavored water. Flavored pure water and flavored sparkling water, functional waters like cactus water and coconut water, and fruit-infused waters can increase product prices and also serve as bases for non-alcoholic or alcoholic cocktails, further expanding sales channels.
2. Perfect combination of function and form—adding more value to water
In addition to simple, clean ingredients, consumers also want health benefits from beverages. Specific pH levels and added nutrients, electrolytes, minerals, proteins, etc., cater to consumers seeking added value. Perumbala, Vice President of Taste at Sensient, suggested that younger Gen Z consumers prefer energy drinks, while millennials have energy water, each getting what they need. Laird Superfood is a so-called 'alternative energy' company. Besides its signature coffee creamer line, it is committed to providing sustainable, all-natural energy foods. Its slogan, 'Best Performance, Healthy Living,' is reflected in its HYDRATE coconut water line, which contains 72 trace minerals. The concentrated water comes in small pouches, to be added to 8 ounces of pure water when drinking. Laird Superfood claims the concentrate blends freeze-dried coconut water with nutrient-dense powders such as beetroot, pineapple, mango, and turmeric root, with no sugar or additives, making it a superfood alternative to sports drinks. Laird Superfood CEO Paul Hodge said, 'We wanted to create a product that goes beyond flavored water, with more benefits than our original products.' Image source: Amazon. Another functional ingredient is fiber. Hello Beverages' hellowater contains 5 grams of chicory root fiber per 16-ounce bottle. The company claims that 97% of Americans do not consume the recommended daily fiber intake, and hellowater aims to close that gap, saying the drink improves gut health, lowers cholesterol, and controls blood sugar. The hellowater line, sweetened with stevia, comes in five flavors: Smile mixed berry, Laugh lemon lime, Live pineapple coconut, Love cucumber lime, and Dance orange mango, with 10 calories per bottle. Image source: hellowater official Twitter.
3. Committed to environmental protection—giants saving the planet
Today's consumers consider ecological and social responsibility when purchasing. They are not only looking for natural and clean ingredients but also want these ingredients to be sourced and produced sustainably. Tate & Lyle has established a partnership with Earthwatch (a non-profit environmental organization). Storms said of the production process, 'We ensure that as the stevia market grows, sustainable practices are consistently integrated, maximizing socio-economic benefits.' Laird Superfood, in addition to using clean whole-food ingredients, is also committed to 'how to deliver products to consumers.' Although its products are mainly consumed by travelers, busy parents, entrepreneurs, and athletes, its HYDRATE products are not single-serve but come in a large pack of 19 bags, resulting in low carbon emissions. Another company committed to positively impacting the surrounding community and environment is Just Water. Based in New York, the company sources its high-pH natural still water from Glens Falls, New York. They use a distillation process to infuse alkaline water with organic fruits, boiling and collecting the steam. Just Water bottles only a tiny fraction of Glens Falls' abundant spring water resources and says it 'pays a fair price for this,' meaning profits flow back to the local community. The head of the company said, 'We are proud to be B Corp certified.' Image source: Cadencecodev. 'Based on purity, sustainability, and transparency,' Found Beverage Company was established in Australia in 2007. Its flavored waters come in elderflower, cucumber mint, watermelon basil, and lemon flavors, made from spring water near Uludag National Park in Turkey. It is full of natural aromas, containing natural extracts and a small amount of non-GMO beet sugar. Found uses bottles made from 100% recycled glass and is known as 'one of the most sustainable beverage companies in the world,' also being the first to achieve carbon-neutral certification. Image source: Amazon. The company also individually numbers 100,000 bottles of flavored water, each glass bottle representing a marine mammal affected by plastic pollution, and plans to donate 100% of profits to the marine environmental advocacy organization Oceana. **-03-**Brand differentiation—the biggest danger for flavored water in the future is not taking risks To stand out in a highly fragmented market, many flavored water companies keenly perceive consumer needs and 'take risks' to develop new products. Proposing values that resonate with consumers, combining new products with well-positioned targeted marketing strategies, are all essential. A good example is FATwater, launched in 2015 by Bulletproof Coffee entrepreneur and biohacker Dave Asprey. The product is made from purified deionized water (with ions removed through a special filter) and contains 2 grams of fat from the company's proprietary coconut oil. FATwater is sugar-free and rich in B vitamins. The head of the company calls this 'fat-fueled water' that can 'recharge' consumers, i.e., provide energy. Image source: Time. A newcomer in the emerging CBD beverage space is Sweet Reason Beverage. This women-led company, headquartered in New York, launched three CBD-flavored waters in the second half of last year, in grapefruit, cucumber + mint, and strawberry + lavender flavors. Each 12-ounce glass bottle contains 7 mg of pure CBD, with no sugar, sweeteners, carbohydrates, sodium, or other artificial additives. Founder Hilary McCain noted that she and her team researched for a year to find the best water-soluble CBD on the market. This tasteless organic CBD has high bioavailability and does not require added sugar or sweeteners to mask the flavor. Image source: Delish. Another emerging market is alcoholic flavored water; Forbes magazine declared 'wine water' as the top beverage of 2018. Currently, companies like Wine Water and Napa Hills offer natural flavored waters with antioxidant benefits but no alcohol, sugar, or calories. This year, Napa Hills launched a new line of Sparkling Waters in cherry pink, peach gray, lemon chardonnay, and pinot noir flavors. The antioxidant blend used in the wine water contains resveratrol, a natural component in red wine with anti-inflammatory, anti-aging, and cardiovascular health benefits. Image source: Beverage Daily. In the future, brand differentiation will play a greater role in helping beverage companies leverage target markets. Brand distinctiveness can be achieved in multiple ways, one being aesthetics. Brands like La Croix, Perrier, or Topo Chico not only create a unique look but also cultivate a complete brand image that inspires brand loyalty. Differences based on ingredients and origin are also important for brands. For example, Topo Chico's Mexican origin is an important aspect of its brand. Positioning as mineral water or spring water (rather than just plain purified water) also adds value to the brand. Ingredient differentiation is another path, especially in flavor and sweetener choices, such as Sensient's extracts rich in polyphenols and other functional ingredients. Companies seeking flavor and functionality may increasingly develop green tea extracts in the future, such as Phocus, a premium flavored water brand that contains natural caffeine from green tea and the amino acid L-theanine. In addition to providing energy, green tea extract is rich in catechins, which have numerous health benefits. Image source: Adweek. Botanical ingredients may become a major component of healthy beverages, including flavored water, which is closely related to the plant-based trend. Flavored water's emphasis on origin makes botanicals popular because consumers have a natural affinity for them. Stevia and monk fruit extracts and soluble fiber in flavored water all benefit from the plant-based halo. Natural products have higher performance, but the final product must still have excellent taste to match. **-04-**Summary According to Beverage Marketing Corporation, by 2016, bottled water had surpassed carbonated soft drink consumption in the U.S. The flavored water segment within bottled water is also continuously innovating alongside major food industry trends. To tap into the flavored water market, the key points from this article are as follows: 1. Enrich flavors and packaging. Bright red, orange, and yellow packaging can add visual highlights. At the same time, attention should be paid to capturing the female consumer market: a 2015 Mintel China flavored water market report showed that 68% of women aged 20-24 had drunk flavored water, compared to only 58% of overall Chinese consumers. Wine water and coffee can also provide taste stimulation. 2. Upgrade flavored water. In the light-flavored water market, it is difficult to distinguish between products based on subtle taste alone; consumption upgrading is a major trend. Plant ingredients, fiber components, energy replenishment, and beauty and skincare are all means of attracting consumers with added functionality. Upgrading from regular flavored water to sparkling flavored water can also satisfy the 55% of women who prefer sparkling water. 3. The concept of sustainable development should permeate all aspects of the enterprise; packaging, ingredients, and water sources are all arenas for demonstrating corporate responsibility and technological strength. Compared to bottled water, flavored water has higher premium space. Innovators who can match formulations, sales, brand marketing, and packaging with the correct target consumer groups will be expected to gain more advantages in the fiercely competitive flavored water market. Article source: FBIF Food & Beverage Innovation (ID: FoodInnovation) Tips will be paid 400-2000 yuan once adopted. China FMCG + Internet Professional New Media Committed to FMCG manufacturer and distributor transformation and channel digital solutions Copyright | Business Cooperation | Project Consulting | Reader Submissions