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01 January 2000
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If A member of the public asked for a glass of water in a British restaurant 10 years ago, chances are it came from a tap. But concerns over the safety of mains water in recent years, coupled with the bottled water habit British holiday-makers have brought back with them from abroad, have relegated tap water more and more to being used for household chores. A new generation is growing up opening the fridge door for a glass of water rather than turning on the tap.

The average amount of bottled water consumed per person per year in the UK a decade ago was just two litres, says the Natural Mineral Water Association (NMWA). Today it is nearly 12 litres and, while we are still way behind Italy's 135 litres, France's 111 litres, Germany's 95 litres and Spain's 80 litres, signs are that demand for bottled water is continuing to grow. Research by Canadean indicates that the UK bottled water market, currently at about 602 million litres, has grown 56% since 1990 and, with year-on-year growth forecast at 7%, is the fastest-growing sector of the soft drinks market.

Britain currently imports about 206,000 tonnes of bottled water, most of which fits into the EC definition of natural mineral water. According to research by AC Nielsen, three-quarters of all the bottled water sold in the UK is natural mineral water. Furthermore, although UK consumers show less of an interest in the mineral content of bottled water compared with the French, Germans and Italians, most now claim to understand the difference between natural mineral water and spring water.

Ian Hall, chairman of the NMWA, says: "Unfortunate problems being experienced by the privatised water companies have had a positive effect on bottled water sales in general. An increasing proportion of occasional users are now becoming volume purchasers."

Hall compares the changes in the bottled water market to the development of the wine market: "Some years ago, few people understood which wines to buy, yet the UK has become a major export market for wines in the past 10 years. In the same way as wine, which was once seen as a luxury product for special occasions, natural mineral water has now become a regular feature here."

Bottled water is now an established profit generator in the restaurant sector. According to research conducted by Taylor Nelson AGB on behalf of the Scottish brand Highland Spring, a third of all diners nationwide are drinking bottled water with their meals. And Coca-Cola & Schweppes Beverages (CCSB), which distributes a range of bottled water including Perrier, Vittel, Buxton and Malvern, estimates that purchases of water in the restaurant and leisure sector account for 13% of UK bottled water sales. Bottled water now beats squash, juice, lemonade, milk shakes and other carbonates, accounting for 9% of all soft drinks consumed with meals. CCSB has also identified a growing demand for larger serving sizes, and the company claims sales can be further increased when a range of serving sizes are offered.

Liz Breckenridge, marketing director for Highland Spring, says: "Consumer demand for bottled water means there are great profits to be made by restaurants and hotels, particularly because it is not drunk as a substitute for, but as an accompaniment to, wine." Indeed, research by Taylor Nelson shows that two-thirds of diners who purchase bottled water also buy wine, while only 13% order water as a substitute for wine.

Breckenridge adds: "And it's important not just to offer sparkling water, as restaurants did six or seven years ago, but to offer still water for more choice. Restaurants are missing out on a profit opportunity if they don't offer still water."

In fact, still water has overtaken sparkling as the nation's favourite, with just over half of bottled water consumers showing a preference for it. But sparkling remains the favourite in London, according to Taylor Nelson. For regular consumers, still water has become an everyday replacement for tap water, while sparkling waters, including flavoured varieties, seem to be regarded more as a luxury, or an alternative to alcohol or sweeter soft drinks. Premier Waters, which owns the Evian, Volvic and Badoit brands, says sparkling sales have tripled in the last decade and four out of every 10 bottles of water sold in the UK are sparkling.

Bass Taverns' 2,500 premises nationwide offer still and sparkling water, and the company reports an increase in sales of both varieties over the past year. "The largest increase has been shown by the 25ml bottles of still water, whose sales are up by 60% on last year," says Graham Stewart-Reed, spokesman for Bass Taverns. The company believes that offering a recognised brand is very important. "We stock Ballygowan because it's a brand that is well known to everybody and people feel confident about it," says Stewart-Reed.

This would appear to be supported by Taylor Nelson's research, which shows that 70% of diners who drink bottled water with their meals prefer a well-known brand to a restaurant-exclusive product. At Highland Spring, Breckenridge agrees: "Consumers definitely prefer well-known brands in restaurants. If they are paying for water then they want to recognise the brand as a premium one."

However, some restaurants remain unconvinced. The 11 Conran restaurants in London prefer to serve water under their own label, bottled for them by Hildon. "The label just states ‘water' and is in keeping with the Conran philosophy of offering simple ingredients," says Conran Restaurants' Victoria Parnis.

There are now estimated to be more than 200 branded waters available in the UK, and more than 40 new ones have been introduced in the past two years alone. With the market dominated by a handful of strong brands, which have spent several years establishing themselves, it is now more difficult for new brands to break into the market.

One brand hoping to beat the odds, however, is the Canadian one, Naya, recently launched on to the UK market by Nora Beverages. A still spring water bottled at its source (a reservoir beneath the Laurentian Mountains in Mirabel, Quebec), the water has already been successful in the USA. "The UK is the fastest growing market for bottled water in Europe and we are hoping to capitalise on that growth trend," says Nora Beverages vice-president for Europe Alan Garbutt.

Consumption of bottled water in the UK does vary from region to region. According to Taylor Nelson's research, the South of England still has the highest percentage of people who drink bottled water, with nearly half of all diners in London and the South-west ordering bottled water with meals, whereas in the North-west the figure drops to less than 20%. Consumers in the Midlands and the North are starting to drink more bottled water, but the research indicates that Scotland has the lowest proportion of consumers at only 12%.

There is no evidence to suggest there is a strong regional preference for, or loyalty to, any particular brand of bottled water, except in Scotland where, in a survey conducted by Mintel, more than a quarter of consumers expressed a preference for Scottish water.

Highland Spring, however, does not find itself confined to Scotland. "We have a strong distribution in the South-east and the Midlands," says Breckenridge. "And we also feature on a water list compiled by Pascall Martin at the Grand Hotel in Paris, so bottled water is definitely not confined to the area in which it is produced."

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