Flavored Water Market

Flavored water is water infused with various flavors, especially fruits, vegetables, and herbs. The growth of the global flavored water market is driven by the growth of organized retail stores and rising health consciousness among consumers. However, the availability of various substitutes for flavored water is hampering the growth of the market. Product innovation and promotions and the rising demand for natural and clean-label beverages are expected to offer lucrative opportunities to market players in the coming years.

Robust economic growth, the emergence of a large and prosperous middle class, and high rates of migration from rural to urban areas have led to the influx of international retailers across the globe and encouraged the establishment of new retail stores. Strong marketing strategies and widespread distribution channels have facilitated the easy availability of various products. With the strong performance of the retail sector, the sales of flavored water have been experiencing a surge. The product is distributed via various channels and is easily available in departmental, specialty, and convenience stores. Consumers tend to prefer departmental and specialty stores for the purchase of flavored water. These outlets offer the convenience of one-stop shopping. Technological advancements have also increased the sales of the product through e-commerce platforms. This has encouraged the expansion of existing retail outlets in developing countries, such as India, Brazil, and Russia. The Indian retail industry is emerging as one of the fast-paced industries owing to the entry of several new players in the market. According to the India Brand Equity Foundation, the retail market in India is projected to expand from an estimated USD 672 billion in 2017 to USD 1,200 billion by 2021 with online retail expanding at 31% from 2017 to reach USD 32.70 billion in 2018. Moreover, foreign direct investment (FDI) inflow in Indian retail trading was USD 1.66 billion between April 2000 and March 2019, as per the Department of Industrial Policies and Promotion (DIPP).

Thus, the growth of the retail sector across the globe is expected to drive the demand for flavored water during the forecast period

Product promotions play a crucial role in attracting consumer attention. Promotions on e-commerce and social media platforms have the potential to increase consumer awareness, directly affecting sales. E-commerce also acts as a strong distribution channel in the current market scenario. Manufacturers have also introduced various flavors and combination of flavors as per consumer requirement. For instance, the brand DASANI by The Coca-Cola Company was first introduced in four original flavors; in March 2018, a combination of different flavors including, berry, black cherry, Meyer lemon, lime, raspberry lemonade, tropical pineapple, watermelon, white peach, strawberry guava, blood orange, and pink grapefruit were introduced.

Furthermore, celebrity endorsements play a vital role in driving the sales of products, increasing recall and helping create brand loyalty.

Manufacturers are also focusing on effective packaging designs, which have a noticeable impact on consumer shopping behavior. Packaging plays a significant role in product marketing by delivering a sense of quality and reflecting the product’s brand image. Manufacturers focus on convenience packaging to attract consumer attention and help their product stand out on the retail shelf.

The adoption of strategic marketing campaigns and introduction of innovation in flavor and packaging offer the manufacturers of flavored water significant opportunities for growth during the review period.

The availability of a wide variety of options for beverages, such as juices, smoothies, sports drinks, and soft drinks, is expected to restrain the growth of the global flavored water market to a certain extent. Consumers have several options when it comes to choosing beverages and manufacturers are introducing sugar-free and clean-label variants to tap into the latest trends in the market. Sports drinks with low sugar content are also high in mineral content and the demand for these products is rising among athletes and general consumers. Sports drinks help maintain electrolyte and fluid levels in the body, and thus are a close substitute for flavored water. Additionally, the demand for functional beverages is increasing as they provide additional benefits to the body and help protect from various diseases. According to MRFR analysis, the global functional beverages market accounted for revenue of USD 90.1 billion in 2018 and is expected to register high growth in the years to come.

Hence, the availability of substitutes for flavored water is expected to impede the growth of the market during the review period