Nowadays, the sparkling water category is as crowded as its fine bubbles, with major brands jostling for space. Why has sparkling water become popular in recent years? Did young Chinese consumers suddenly develop a liking for it? What value do they perceive in this category? And what cognitive opportunities remain that could sustain the market's growth? This article addresses these questions. Note: "Chinese consumers" is used for convenience and does not refer to all Chinese people.

-01- The Journey of Sparkling Water's Acceptance in China For a detailed account of how sparkling water gained acceptance in China, the article "The Class Portrait of China in Sparkling Water" provides a thorough description. Here are excerpts:

"For a long time, sparkling water did not sell well in China. (From 2010 to 2012, sales volume in the Chinese market remained around 100,000 liters. In the same period, the European and American markets had reached nearly 500 million gallons. Europeans and Americans drink sparkling water with every meal.)

In the Chinese market, only those who emphasized lifestyle taste, or even those who had received European or American dietary education, could enjoy or accept the taste of sparkling water. This is because Chinese dietary habits and gastrointestinal sensitivities are not well-suited to the intense mouthfeel and sensation of sparkling water."

"Around 2012, sparkling water began to show signs of development in China. That year, the compound annual growth rate reached 20%. Data from Kantar's household consumption panel shows that in 2019, sparkling water consumption in the Chinese market grew 43.9% year-on-year, far exceeding the 5% growth rate of ordinary mineral water. Today, sparkling water is a business with annual sales exceeding 10 billion yuan in China."

Why is this? Because sparkling water underwent a category perception transformation in the Chinese market.

-02- What Category Perceptions Do Chinese Consumers Currently Have About Sparkling Water? Before analyzing this, it's crucial to clarify our perspective on "category." We can define categories from two aspects:

On one hand, we can identify the category based on physical attributes: for example, Hermès bags are bags, Genki Forest sparkling water is sparkling water, and soy sauce is soy sauce. I call this the "form category."

On the other hand, we must return to "consumer needs": for instance, Hermès bags are luxury items expressing identity, and soy sauce is a seasoning that enhances flavor and color in braised pork. I call this the "essential need category." Understanding a category requires considering both dimensions, especially opening our minds to the second dimension: the "essential need category."

With this underlying logic, it's easy to understand what Chinese consumers already perceive about sparkling water:

1. Most Chinese consumers think: sparkling water = water with bubbles. (We'll delve into this later.)

2. Currently, in most Chinese consumers' minds, sparkling water is a "0-sugar, 0-fat, 0-calorie beverage." (As for whether drinking it causes weight gain, with growing awareness of "0 sugar," consumers are no longer blindly thinking it's a "drink that won't make you fat.")

High sugar content has been the most criticized aspect of traditional carbonated drinks and fruit juices. "0 sugar," "0 sucrose," yet still called a "beverage" (which implies decent taste and mouth pleasure) – sparkling water is the best liquid form to meet this need.

However, achieving "0 sugar" relies on sweeteners like erythritol. Almost all local sparkling waters use the same basic formula of "0 sugar, 0 fat, 0 calories," with no industry barriers.

3. To differentiate within the category, brands are innovating in a "sparkling water +" direction.

This "+" involves adding various value-added functions, such as vitamins, beauty ingredients, minerals, etc., turning sparkling water into a functional drink with "0 sugar plus a function." It also includes flavor innovations like rice wine sparkling water, natural fruit juice sparkling water, and lactic acid sparkling water.

As a result, consumers' perception of sparkling water's value has upgraded. It's not just a 0-sugar, 0-fat, 0-calorie drink, but also a functional beverage meeting specific needs or a drink with unique, novel flavors.

However, functional foods themselves are a major track. In recent years, various forms of functional foods (gummies, jellies, powders, etc.) have emerged. Even without health knowledge, consumers understand that any health ingredient isn't necessarily better in larger amounts. For example, if sparkling water has added vitamins, would taking a multivitamin be redundant? Isn't the VC content in water lower than in VC tablets? Why spend extra on VC sparkling water when drinking water fills you up?

Thus, we see that Chinese consumers' perception of sparkling water is almost entirely functional. But interestingly, the "functions" are all externally added elements. This makes it difficult to truly differentiate in the sparkling water field, despite its boom.

-03- What Category Perceptions Are Still Missing or Vague for Consumers?

1. As mentioned, Chinese consumers think sparkling water = water with bubbles. But where do these bubbles come from – artificial or natural?

Many people can't distinguish, or even lack the concept that bubbles can be natural. In their minds, any water that looks like soda and has a "bubbly" sensation is sparkling water. So some confuse soda water with sparkling water, thinking they're the same.

As noted, new product development is almost always "sparkling water +," adding nutrients like hyaluronic acid, vitamins, natural fruit and vegetable juices, etc. Few focus on the "bubbles" themselves, and no brand has educated the market about the "bubbles" in sparkling water.

What are the health benefits of "water with bubbles" itself? The main reason is that the market for "water with bubbles" is so prosperous that whoever invests in education first would need to modify products and bear educational costs. So everyone turns a blind eye to the fact that most people only know the surface of bubbles, not their essence.

For example, when Perrier entered the Chinese market, it didn't heavily promote that its bubbles are naturally occurring, why that is, or the benefits of natural mineral water plus natural CO2. Instead, it adapted to local trends, focusing on zero sugar, zero fat, zero calories, and its artistic style.

2. Can a Chinese local sparkling water brand create emotional or even cultural value?

Some might argue: Don't elevate this to brand status; it's pretentious. Sparkling water is just a category riding on Chinese consumers' cognitive dividend. Young people across China want "0 sugar, 0 fat, 0 calories, and good taste," and sparkling water is the best form to meet these needs. Seize this cognitive dividend quickly; it's all about speed!

This view isn't wrong. But it comes back to whether you're doing business in a "brand" way. A brand isn't creative packaging, expensive ads, or emotional marketing; it's business, built through actions, focusing on ROI, and solving the problem of sustainable growth.

As we've seen, the sparkling water category is fiercely competitive, with similar OEM factories. The value it offers consumers is mainly functional, and this functional value has no barriers: "0 sugar, 0 fat, 0 calories + various functional additives."

So, what is the emotional or cultural value of sparkling water? Functions are easy to imitate, but genuine emotional engagement and cultural identity are hard to copy; that's the essence of a brand.

But emotional value isn't just claiming to understand young people; cultural value isn't just putting national trend elements on the bottle.

Look at Perrier's history. Initially, its drinkers were mainly European aristocrats. Perrier used cultural labels like "crazy, honest, free" to enter the hearts of post-war youth and their social scenes (like nightclubs). (Perrier's most famous slogan, "Perrier, C'est fou!" translates to "Perrier, it's Crazy.")

(Image: Salvador Dalí's "Perrier")

Today, Perrier has become a cultural symbol of healthy, artistic, quality life in China. Despite many sparkling waters flooding in, Perrier remains distinct. Data shows that in 2017, China replaced Japan as Perrier's largest market in Asia, maintaining double-digit growth.

So, how can the sparkling water category establish its own emotional and cultural value in China? This is worth pondering for brands.

For example, most sparkling waters are priced between 5 and 8 yuan. Can we have our own premium sparkling water that embodies China's local health culture? Or can special flavors with regional historical culture break out? For instance, the salt soda water produced by Shanghai Yanzhong, the OEM for Xixiaocha sparkling water.

How should sparkling water develop in China next? It's advisable to explore consumers' missing or vague category perceptions. Only by seizing these cognitive opportunities can the category sustain growth in the local market.

After all, Chinese people don't have a historical habit of drinking sparkling water. If young people drink it just for those "zeros," how long can this prosperity last? There are other foods with "0 sugar, 0 fat, 0 calories, and decent taste" besides sparkling water.

Source: 小圈梨 (ID: xiaoquanlisocial)

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