Ben Bouckley, editor of BeverageDaily.com, told the conference in Dubai that the water category risked commoditisation as water was “the simplest drink available” for many consumers.
Its only distinguishing feature, for many - particularly in those countries such as the UK, where bottled water consumption has neither a long nor distinguished history - was whether it was 'soft' or 'hard'.
Premium water producers must therefore push a “hydration plus” proposition, educating consumers on the taste difference between different premium bottled water brands, and stressing water’s heath credentials for example, particularly in the light of rising obesity levels worldwide that meant consumers were shunning some soft drinks.
Innovations such as adding flavors were another way of building value and differentiating premium water from standard bottled waters, as was packaging as a real point of difference, and the possession of an interesting back story that tallied with the ideal of terroir that waters can take from wine.
The challenge producers faced was that consumer understanding of premium bottled water remained undeveloped in many markets, said Bouckley.
The bottled water market in countries such as Germany tended towards high volume, low margin products, with even affluent consumers shopping for such products in discount chains such as Aldi.
Thus bottled water faces the classic double bind of many so-called commodities - as both a precious drinking commodity that everyone perceives almost as a human right and needs, and also a value-driven commodity that many consumers see as ubiquitous, and don't expect to be anything other than cheap.
The challenge for premium bottled water brands is to acknowledge this subtext as a starting point, as they try to market established or nascent brands.
In markets such as the UK one issue was convincing consumers to trade up from tap water - since consumers trust tap water and ask for it in restaurants in UK, Bouckley said, where the on-premise occasion was synonymous with added prestige, for both spirits and wines and even beers, all of which premium waters could compete with.
So bottled water producers needed to explore ways of building significant value in for premium waters and to “move the bottle beyond refreshment”.
Mixology and on-premise prestige
The mixer occasion was a real opportunity for producers, Bouckley suggested, and water could be given a cachet by marketing it alongside exclusive spirits brands.
Source and provenance was also important in getting the marketing story across for quality water, said Bouckley.
Premium waters have immense potential, Bouckley concluded, if you educate your customers and use cross category branding and marketing cues.
Bouckley tackled the topic of 'Consumer Attitudes Towards Premiumisation' at Zenith International's two day event in Dubai earlier this month.
The conference set out to provide small and medium-sized premium bottled water brands with practical information about the UAE market and growing distribution.