Sparkling Mineral Water Market in Canada

Part
01
of three
Part
01

Competitive Analysis - Montellier, Perrier, Mountain Valley, and San Pellegrino

According to San Pellegrino's Head of International Relations, the red star on its logo gives it "subliminal advantage over the competition" because consumers believe that red stars are a mark of quality. Montellier redesigned its bottles to attractive, deep blue bottles which gave it a leg up over its competitors, doubled its sales, and won the company awards for design and packaging. Below is a competitive analysis of Montellier, Perrier, Mountain Valley, and San Pellegrino.

MONTELLIER


PERRIER

  • In June 2017, Perrier organized a marketing and advertising event dubbed 'Perrier Hot Air Balloons' to show its customers the features of any Perrier Sparkling Mineral water.
  • As a marketing strategy, Perrier incentivizes its customers by organizing customer treats and offering the first 120 guests a free bottle of a Perrier beverage.
  • Perrier Canada's most preferred marketing channel is Instagram.
  • The company posted photos of its products, video ads, events, alongside carefully selected hashtags.
  • Given the effectiveness of accompanying Instagram posts with relevant hashtags, Perrier's use of hashtags on its posts gives it a competitive advantage when it comes to brand awareness.
  • Perrier products include Perrier Carbonated Natural Spring Water, Perrier With Natural Flavors, and Perrier & Juice.
  • One weakness of Perrier, according to Dr. Mark Wolff, a dentistry professor, is that the water is more acidic than other fizzy drinks since it has a pH of 5.8 compared to the average pH of 6.8 of other fizzy drinks.
  • According to consumer reviews of Perrier sparkling water on Influenster, most consumers think that Perrier sparkling natural water is more expensive than other brands.
  • Other customers said they did not like the taste but these are consumers who have never tasted sparkling carbonated water before and therefore did not know what to expect.

MOUNTAIN VALLEY SPARKLING WATER


SAN PELLEGRINO

  • This Nestle Waters brand mostly uses Facebook for its marketing efforts.
  • Through its YouTube Channel, SanPellegrino TV, the company markets its sparkling water and encourages its customers to discover their taste experiences.
  • San Pellegrino's sparkling water is available in the original San Pellegrino flavor as well as the exciting San Pellegrino Essenza that comes in three flavors: Dark Morello Cherry & Pomegranate, Lemon & Lemon Zest, and Tangerine & Wild Strawberry.
  • The original San Pellegrino flavor is bottled in glass, PET, or Magnum bottles and available in 250 ml, 500 ml, 750 ml, and 1,000 ml bottles.
  • According to San Pellegrino's Head of International Relations, the red star on its logo gives it "subliminal advantage over the competition" because consumers believe that red stars are a mark of quality.
  • This assertion is corroborated with research by psychologists from Oxford University who realized, after ten years of research, that "incorporating a star into a design helps connote the arousing experience of drinking carbonated water."
  • On Influenster, most disgruntled customers drank the sparkling drink for the first time, and it never appealed to them as they only wanted to taste it to understand why there was so much hype around it.
  • The projected annual revenue from sparkling water in Canada is $309 million by 2019.

RESEARCH STRATEGY

To provide a competitive analysis of Montellier, Perrier, Mountain Valley, and San Pellegrino sparkling water brands based in the Canadian market, we first searched through the official Canadian websites of the companies for their products, their recent marketing efforts, and any unique features that set them apart from the competition. This search yielded a plethora of results on products, recent marketing activities, and provided links to social media channels where the companies engage with customers to boost brand awareness and increase sales. We also found news articles on the sites showing the awards some brands received for being outstanding players in the market. However, we could not find any information on weaknesses as the companies only exposed their positive side. This search also did not yield any information on the Canadian revenue as there was no data breakdown into such specifics.

Next, we searched through news sites such as Forbes and HuffPost for expert opinions on the sparkling water companies and through third-party reviews from sites such as Influenster, Yelp, ChickAdviser, Amazon, among others, for consumer opinions and reviews. We wanted to look through all critical reviews and identify what most consumers were complaining about, which would then be used as a proxy for the weaknesses of the brands being addressed in this request. We found an article from HuffPost that highlighted a few weaknesses of San Pellegrino and Perrier. Through Influenster, we found quite a number of critical reviews and low ratings from consumers of Perrier and San Pellegrino. Since the reviews from Canada were very few, we opted to use all reviews as the product is the same all over. We could not find reviews for the other two brands so we checked ChickAdviser and Yelp, but the number of reviews was less than 10 on each so we could not paint an accurate picture of the critical reviews. On Amazon, the reviews concentrated more on the condition of the delivered package, than on the taste of the contents.

To search for the Canadian revenue of the companies in this request, we first looked for annual reports, quarterly reports, and other financial reports of each company on their respective websites. However, since all the companies are private, or are owned by private companies, there was no publicly available information on their revenues. Next, we searched through market reports and statistics through Markets and Markets, Market Watch, EuroMonitor, Canadian Insider, and Statista. We hoped to find the market size, as well as the key players and their market share for triangulation of the companies' individual revenues. Unfortunately, the only data available was on the global sparkling water market and no segmentation into the Canadian market. We were only able to find the 2019 projected market size of the sparkling water industry in Canada, which we have provided in the key findings.
Part
02
of three
Part
02

Sparkling Natural Spring Water - Demographics: Canada

After an extensive search through Canadian health and wellness websites, survey reports, as well as paywalled sources, we were unable to find any publicly available information specific to the demographics of Canadians who drink sparkling natural spring water. However, below are some helpful findings focused on the demographics of Canadians as a whole.

CANADIAN DEMOGRAPHICS

  • In summary, Canada has 27,391,890 people between the ages of 20 and 79, with 13,638,919 men and 13,752,971 women.
  • The Age and Gender tab of the attached spreadsheet has detailed demographic information on the Canadian population by age and gender; the Marital Status tab has demographic information on marital status; while the Province tab has population statistics by province.
  • The attached Google Doc has infographics on selected information from Stats Can on education and income.
  • Two-thirds of adult Canadians have a post-secondary education.
  • The median income in Canada is CAD 57,000.

LINKING SPARKLING WATER TO HEALTH AND WELLNESS

  • According to Canadian Grocer, "the carbonated water category taps into several health and wellness trends popular with Canadians today, such as the appeal of a low-carbohydrate and low-calorie option that can potentially be a low-guilt beverage. For carbonated water, innovation is fueling the growth with more flavors and formats available to Canadians."

QUANTITATIVE INFORMATION EXTRAPOLATION

  • According to Agriculture Canada, for 68% of consumers, preventing further health issues in a top priority; followed closely by 63% who want to look and feel good. Increasing water intake has been identified as a way to reach those goals.
  • Since there are 27,391,890 people between the ages of 20 and 79 in Canada, about 18,626,485 [68% of 27,391,890] Canadians aged 20-79 are potential customers for sparkling water.
  • 52% of the Canadians surveyed rank beverage choice as making an important contribution to their health and wellness needs. Therefore, about 14,243,782 [52% of 27,391,890] Canadians aged 20-79 think beverages are an important factor in maintaining good health.
  • These preferences encourage sustained growth for the health and wellness sector in Canada.

QUALITATIVE SURVEY RESULTS

  • According to Pearl Strategy's reports based on a Canada-wide survey, Millennials have a stronger commitment to eating healthier, improving sleep, and avoiding/reducing stress. One can, therefore, assume that Millennials are a large consumer segment for sparkling water.
  • Being healthy is very important to Millennials as they say it makes life more cheerful, provides them with vitality, and gives them balance and an advantage. All these concepts could be used to target Millennials in advertising.
  • Millennials rated beverages as effective in pursuing health and wellness.
  • The growing urban population is one of the key factors triggering the growth of the market.

OTHER INFORMATION

  • The size of the health and wellness market is expected to reach USD 20.6 billion in 2022 from USD 14.9 billion in 2013.
  • According to Robert Carter, an industry adviser with NPD Group, demand for sparkling water in Canada has been "exploding," with more consumers moving away from the alcohol category and the carbonated soft drink category.

INTERESTING NEW PRODUCTS:

#1: SodaStream

  • SodaStream is known as the maker of the consumer home carbonation product for consumers. The device carbonates water by adding carbon dioxide from a pressurized cylinder to create soda water to drink.
  • With sales growing by nearly 50% in 2018, Canada has become a major market for SodaStream. The company claims to have sold 1.5 million machines in Canada since 2010, making Canada its fourth-largest market in the world, behind Germany, the US, and France.

#2: Sweet Reason

  • The company describes its product as a "premium sparkling water infused with 7mg of a unique form of CO2-extracted CBD."
  • Its cannabidiol (CBD) is water-soluble, and its drinks don't contain sugar, sweeteners, sodium, carbs, or artificial ingredients.
  • "The company sources its cannabinoid extract from a hemp grower in Colorado and uses a co-packing facility for bottling and distribution."

RESEARCH STRATEGY

In looking for the demographics of the Canadians who drink sparkling water, we started with a thorough search of the media that provides information on Canadian retailers, including publications such as Canadian Grocer and Retail Insider. Through this approach, we found information about the increasing sales of sparkling water, as well as the observation that the sales of water are linked to the health and wellness trend in Canada.

Our next strategy was to search for business articles and statistics around the sales of sparkling water and the demographics of the users. We found some generic statements about generations like the Boomers, Millennials, and Gen X as well as some interesting information about how householders are making the sparkling water they drink. However, we did not find anything specific in the area of demographics.

From here, we decided that if we could not find demographics on sparkling water consumption specifically, perhaps we could find demographics on the health and wellness trends in Canada and link the two together. We, therefore, started with the Canadian government website from Agriculture Canada, which had a report on Health and Wellness Trends in Canada. While it provided generic information about customer motivation, there was nothing specific regarding demographics.

We then opted to search for paywalled reports on health and wellness trends, with the hope of finding reports that discuss the market for sparkling natural spring water in Canada. We found a three-part report from a Canadian company called Pearl Strategy. After a deep dive into all three parts, we were left with some survey results that outlined priorities by generation. That report also had particular information for marketers based on their research, which we have highlighted above as helpful findings.

Our ultimate determination was that specific information about the demographics of Canadians who drink sparkling natural spring water is not available. However, we have provided some generic information, as available, in our findings above.

Part
03
of three
Part
03

Sparkling Natural Spring Water - Consumer Trends: Canada

Three consumer trends regarding sparkling natural spring water in Canada were identified as (1) the growth of carbonated water, the highest among other water categories, (2) health-conscious consumers serving as the main consumer category of sparkling water in Canada, and (3) varying tastes and flavors playing an important role in the sales of sparkling water.


FINDINGS

TREND#1: SPARKLING WATER IS PREFERRED BY MORE CONSUMERS THAN FLAT WATER IN CANADA
  • It was seen in Nielsen's 2017 report for Canada that although in terms of total volume sales flat water in Canada was still leading the charts, in terms of growth carbonated water far surpassed flat water as well as other categories, such as coconut water.
  • For the 52 weeks ending on April 1, 2017, the sales of flat water grew by 4% year-over-year (YoY) in terms of sales in dollar value and by 6% YoY in terms of sales in liter volume.
  • Meanwhile, in the same time period, the sales of carbonated water grew by 17% YoY both in terms of sales in dollar value and sales in liter volume.
  • Other categories such as coconut water witnessed a growth of 4% and 3% YoY for sales in dollar value and sales in liter volume, respectively, in the same span of time.
  • This preference towards carbonated/sparkling water was not a one-year phenomenon, considering that the same phenomenon was found to have gained momentum between 2014 and 2015 as well.
  • Between 2014 and 2015, flat water sales in Canada were up 2% in dollars, while carbonated water sales were up 8% in dollars and a significant 21% in units.
TREND #2: HEALTH-CONSCIOUS CONSUMERS ARE THE MAIN CONSUMER CATEGORY OF SPARKLING WATER IN CANADA
  • Overall, the increase in consumption and sales across all categories of water is driven by the fact that almost three-fourths (73%) of Canadians actively trying to lose weight are choosing to drink more water.
  • Now, with carbonated water being the highest-growth category in water overall, as seen from the findings above, it can be reasonably assumed to be driven by this factor of health-consciousness.
  • This fact was also validated by Condé Nast considering that the publication noted in 2019 that Canadians were "slowly but surely migrating to a healthier alternative with sparkling water consumption being consistently on the rise."
TREND #3: CONSUMERS ARE ALSO LOOKING FOR VARYING TASTES AND FLAVORS IN THEIR SPARKLING WATER
  • As early as in 2015, it was found that consumers of sparkling water in Canada were often motivated by taste along with other factors such as craving and relaxation.
  • The primary market for carbonated and sparkling water is composed of 25 to 40-year-old “social trendsetters who are online, in-the-know and looking for something unexpected,” according to Jennifer Semley-Robert of Nestlé Waters.
  • To cater to this above-mentioned demographic, Nestlé Waters added a variant "Perrier L’Orange to its fold of flavoured water varieties," corroborating the demand for varieties in the carbonated/sparkling water category.
  • In a 2018 report, this piqued interest was validated as an ongoing trend one since it noted that "sales in the sparkling water category increased 17 per cent from last year, primarily attributed to new companies and new flavour offerings into the market."
  • The popular flavors of carbonated water in Canada were grapefruit, lemon, strawberry, and cucumber.

RESEARCH STRATEGY:

To find the information requested, the research team started by looking into reports published by reputable agencies on the consumable bottled water market in Canada. We also looked for market research reports and industry research reports from market report providers and databases. However, while these sources were looked into for trends prevalent in the Canadian market, the accessible sections of these reports only provided global insights while Canadian insights were behind a paywall.

We also looked into relevant and sector-specific sources specific to Canada. Some important insights on the sparkling water trends could be found from these sources which could also be corroborated in retrospect from previous years' data and reports. We continued our search by looking into reports published by sellers and manufacturers of sparkling water in Canada, such as Coca Cola and Nestlé. We looked into whether new products launched were reflective of the trend or not.

In all the searches above, the information available was either on "Sparkling Water" and "Carbonated Water" and no specific mention could be found for "Sparkling Natural Spring Water." The reason behind this non-availability and why Sparkling Water and Carbonated Water could be used as apt substitutes for 'sparkling natural spring water' were as follows:
Following the logic as mentioned above, trends for sparkling natural spring water/sparkling water/carbonated water were formulated and described in the findings above.
Sources
Sources

From Part 01
Quotes
  • "Montellier carbonated natural spring water is drawn from an underground spring in Sainte-Brigitte-de-Laval, Quebec and has been bottled in Quebec City since 1984 by the family business Alex Coulombe ltée"
  • "Montellier sparkling natural spring water is 100% sourced in Quebec and available from coast to coast throughout Canada. Certified by Aliments du Québec, it is a light, delicate water ideal for any occasion"
  • "The bottles are blown a few seconds before filling to ensure the highest standards in the food industry. Montellier is sold in unbreakable, recyclable 500 mL and 1 L bottles and now in 355mL slim cans. Available in 3 refreshing flavours : unflavoured, with natural lime or lemon essence."
Quotes
  • "Thus, Montellier sparkling spring water, a 100% Quebec product, was recently awarded the "Grand Gold Selection" medal, the highest distinction awarded."
  • ""This prestigious recognition of our sparkling spring water proves, once again, that it has absolutely nothing to envy to European brands, always sold much more expensive. We are very proud of this success, which allows us to contribute to the reputation and influence of Quebec's food products , "concluded Marc Coulombe, president of the bottler, Alex Coulombe."
Quotes
  • "Shikatani Lacroix revitalized the brand and elevated its imagery with an award-winning design and wordmark. We explored different wordmarks and designed a new bottle with a contemporary look and feel that speaks to the product’s value."
  • "The new bottle design won a 2015 Gold PAC (Packaging Consortium) Global Leadership Award, a 2016 Graphic Design USA Award, and a 2017 Silver Graphis Design Award."
  • "Montellier wanted to elevate the design of its bottle to a premium quality design that would appeal to younger customers and stand out at shelf level. In order to provide a range of evolutionary to revolutionary designs, we explored bottle shape, colour, wordmarks, and imagery. The location of the water source was an inspirational direction, which lead to images that captured the effervescence of the water."
  • "We explored of a wide range of colours before deciding on a bright, deep blue, which was felt to encapsulate the refreshing, sparkling energy of the product in a colour that was less prevalent amongst the competitive sparkling waters in the market (which predominantly use clear or green-coloured bottles). The blue feels clean and energetic, which also speaks to the social aspect Montellier wanted to reinforce – that this water is one to be consumed in engaging, fun, social environments."
  • "The final design has been a huge success for our client. Sales of Montellier have increased significantly since the redesigned package launched. Year-to-date sales of the 500ml bottle have almost doubled."
Quotes
  • "What actually hides inside a bottle of PERRIER? As unimaginable and unexpected as it may seem, inside of it, you will find: sexy girls, lions, a brass band, waiters, crazy fireworks and much more... It is about time someone tells us about it! That is exactly what the latest PERRIER® commercial has set out to do."
Quotes
  • " Instagram posts with at least one hashtag have 12.6 percent more engagement than those without"
Quotes
  • "We are extremely proud to continue our winning streak with three new medals at the annual Berkeley Springs International Water Tasting. "
  • "Mountian Valley Spring Water walked away with two gold medals for our Sparkling and Blackberry Pomegranate Sparkling. In addition, White Peach Sparkling won the Bronze in the Flavored Essence Sparkling category that had twice as many entrants as last year"
  • "Being honored with our first gold medal for Sparkling Water, and achievement in the Flavored Essence market speaks directly to the brand’s commitment to bringing only the best of natural American goodness to the nation. "
Quotes
  • "All Mountain Valley Spring Water available in Canada is sold only in glass bottles. We believe it to be the safest and most durable food grade material available. Our premium bottled spring water must be kept absolutely pure right from our source all the way to your body"
Quotes
  • "Discover S.Pellegrino Essenza, a twist of Mediterranean flavours with the gentle bubbles of S.Pellegrino."
  • "Discover a new way to enjoy the gentle bubbles and fine mineral balance of S.PELLEGRINO®, now in our new sleek cans"
  • "S.Pellegrino’s green glass bottle, with its unique “Vichy” silhouette is an elegant shape shared with its match Acqua Panna"
  • "S.Pellegrino PET bottles are conceived to be enjoyed at home and on the go, perfect to refresh and sparkle everywhere"
Quotes
  • "The new advertising campaign from S.Pellegrino takes you on an amazing journey from Milan to Greece, New York, Tokyo, Dubai, Buenos Aires and Shanghai. Spin the cap and discover where you will go next! Let the unique taste of S.Pellegrino guide you through amazing experiences in taste, explore new places and share every moment with the people you love the most. "
Quotes
  • " “There’s no real justification for it,” says Clement Vachon, head of international relations at San Pellegrino: the stars are there simply because they always have been. Yet they may offer a subliminal advantage over the competition."
  • "The researchers at Oxford found that incorporating a star into a design helps connote the arousing experience of drinking carbonated water"
Quotes
  • "There can also be variation within a type of bubbly water when brand comes into play. In its 2014 quality report, Nestle listed Perrier's pH as 5.8. Wolff said this number shows that Perrier is more acidic than other fizzy waters, which average a pH of 6.8."
  • "If you're wondering if your San Pellegrino is safer than more pedestrian club soda, it's not. Carbonated waters of all walks of life contain carbonic acid. And to blow your mind a little more, we'll have you know that club soda, seltzer and mineral water are all different drinks."
Quotes
  • "This is by far my favorite sparkling water. I drink this brand any chance I get. It is slightly more expensive but still affordable and definitely worth the price. This product is especially great for when food doesn’t settle right. It definitely helps the stomach settle."
Quotes
  • "Disgusting! Taste like bubbly dishwasher detergent water! Bleach! Tried to be healthy but if this is what healthy taste like then o well healthy isn’t for me."
From Part 03
Quotes
  • "Bubbles are on the rise. According to global data company Nielson, sales of carbonated water rose 17 per cent in Canada over 2016 and 2017, which indicates that Canadians are seriously into fizz. But is carbonated water as good for you as regular water?"
Quotes
  • "In step with consumers around the globe, Canadians are actively working to improve their health and make better decisions for their overall wellbeing. With more than half of Canadian consumers (59%) feeling overweight and 52% actively trying to lose weight, finding the right combination of food and beverages is key to a well-balanced diet. While individual plans and strategies differ from consumer to consumer, almost three-fourths (73%) of Canadians are including a very simple choice in their quest: actively trying to drink more water."
  • "As consumers put their money where their health is, water sales across retail outlets are growing across water categories that include flat water, carbonated water and coconut water. In the most recent year, flat water accounted for $539 million in annual sales across Canada, up 4% from the previous year. But while flat water may lead the way in total sales, other options are gaining momentum. Sales of carbonated water, for instance, increased 17% in the recent year, reaching nearly $200 million. And while newer to the market, coconut water is also continuing to see sales growth."
  • "As Canadians take charge of their health, increasing their water consumption is a guilt-free way to stay hydrated and energize the body. Staples like water give manufacturers and retailers an opportunity to partner with consumers in their quests for healthier lives."
Quotes
  • "Canadians can’t get hydrated enough these days, and water seems to be our go-to drink. While flavoured pop and juice sales are falling, water is on the rise. Flat-water sales are up 2% in dollars in the last year, according to Nielsenand carbonated water is up 8% in dollars and a bubbly 21% in units."
  • "The primary market for carbonated water is 25- to 40-year-old “social trendsetters who are online, in-the-know and looking for something unexpected,” says Jennifer Semley-Robert of Nestlé Waters, referring to the recent addition of Perrier L’Orange to its fold of flavoured water varieties. Trends identified in Nielsen’s “Global Health and Wellness Survey” support such category innovation, as 23% of consumers say they plan to buy more water to improve their overall health."
  • "The largest share of water drinking occasions occur among millennials, according to an Ipsos Five study examining Canadian eating habits. 'Interestingly, sparkling water is more likely to be consumed by 35- to 49-year-olds and skews higher to females, those living in Quebec and consumers residing in urban centres,' cites the report. Consumers are also looking for beverages that will contribute to their health, says Robert Kral from Protein2o, a protein-based water beverage in the U.S. Protein2o [handled in Canada by Unique Foods] aims to tap into the female-driven, health-conscious market with its focus on low-calorie and high-protein ingredients."
  • "For retailers, the message is clear: having a diverse range of waters satisfies different consumer buying motivations. As Ipsos noted in its Five report, flat bottled water consumption is driven by a need for convenience and portability. Sparkling water purchases, are more often motivated by craving, taste and relaxation."
Quotes
  • "According to Canadian market research company, Euromonitor International, between 2009 and 2014, the volume of carbonated bottled water sold in the country increased by 47%. Soft drinks are still the popular choice for the Canadians but they’re slowly but surely migrating to a healthier alternative with sparkling water consumption being consistently on the rise."
Quotes
  • "Sales in the sparkling water category increased 17 per cent from last year, primarily attributed to new companies and new flavour offerings into the market."
Quotes
  • "When you take the flavoured syrups and sugar out of pop, you get carbonated water. For many customers, sparkling water offers the bubbly mouthfeel of a pop without the bad ingredients. According to Business Marketing, in 2016, around 574 million gallons of sparkling water ($6.1 billion) were sold. That’s up from 263 million gallons and $2.6 billion in 2011. Popular flavours include grapefruit, lemon, strawberry and cucumber."
  • "Functional waters that have ingredients such as mint, ginger and probiotics – considered to have health benefits – are predicted to grow by 31 per cent in total sales by 2020 according to data from research firm Euromonitor. Restaurants can literally “tap” into this trend very effectively by installing a carbonation system to take tap water and make it sparkling. If a customer orders a glass of still water, there’s no charge. However, you can charge $3.50 for a carafe of sparkling water made right in your restaurant. The equipment cost will be recovered quickly and the rest is pure profit."
Quotes
  • "What is Sparkling Water? Filtered sparkling water, or seltzer water, is made of just two ingredients: still water and carbon dioxide. When plain water meets carbon dioxide, it becomes carbonated or “sparkling.” Because of its simplicity and pure, clean taste, you will find that sparkling water can be just as refreshing as still water -- but often, more enjoyable due to its effervescence."
Quotes
  • "Sparkling water" is produced from a spring or well that naturally contains dissolved carbon dioxide - thus the water is naturally carbonated. The producer may artificially replace any carbon dioxide that is lost during processing but may not add more than what the water had when it emerged from the ground. Although this is a rare geological situation, the water is a novelty rather than being a product that provides special health benefits."