No Signs of Fizzing Out: America's Love of Sparkling Water Remains Strong Through August

FMCG and Retail | 08-24-2018

With high temperatures, summer is a popular season for sparkling water, and this summer is no exception. Nielsen’s Friday morning data shows that the week ended Aug. 18, 2018, alone generated nearly $49 million in sparkling water sales—a figure that’s up 22% from the same time last year*.

But beyond the heat of the summer, Americans have demonstrated heightened demand for such beverages this year. Over the past 12 months ended July 28, 2018, sales of sparkling water across all Nielsen tracked channels reached $2.2 billion. In fact, within the past four years, the sparkling water category grew 54%. Furthermore, the opportunity with this fizzy drink exists globally. Just within North America, Canadians are spending 21% more per household on sparkling water compared to Americans.

So what types of sparkling water are Americans drinking? Popular sparkling beverage offerings like club soda and seltzer have all seen unit growth with the exception of tonic water over the last year.  

Cans Capture Sales Growth for Sparkling Waters

While sparkling water on the whole has seen impressive growth, canned sparkling water in particular has emerged as a huge contributor to category performance. Nielsen reference data by package type shows that while bottled sparkling water commands the majority of dollar sales (64% of all sparkling water sales were from bottled varieties), canned sparkling water has performed exceptionally well this year, up 43% from last year to reach sales of over $803 million. And the week ended Aug. 18, 2018, saw sales of over $21 million for canned sparkling water, up 39% compared to the same week last year, whereas bottled sparkling water is up 11% during the same period. Above and beyond the effects of rising aluminum prices, growth in canned sparkling water is driving the category’s profits. 

The bubbly trend hasn't stopped at water. There has been resurgence in sparkling beverages in other beverage categories as well—most notably seen in the ready-to-drink tea category, with the rising popularity of kombucha (+49% dollar growth over the past 52 weeks) and even into the beverage alcohol market.

HARD SELTZER SALES ARE BUBBLING TO NEW HEIGHTS

Stretching across the store, hard seltzers is a category on the rise in the alcohol market. Within the last 12 months ended July 14, 2018, sales of hard seltzers are up 177%. In fact, hard seltzers now represent about 10% of all flavored malt beverage (FMB) sales. 

However, when it comes to this new, bubbly libation, not all markets are the same. According to Nielsen data for off premise, U.S. regions with strong seasonal periods (such as Washington, D.C. and Chicago) have stronger developed hard aeltzer sales, controlling more than 3% of beer/FMB/cider dollars compared to a national share of about 2%. Regions with warmer climates have opportunities to continue development in hard seltzer, with Nielsen data showing that share is below the national average in places like Los Angeles (1.2% dollar share) and Texas (0.6% dollar share).

Renewed interest in sparkling waters is yet another reflection of consumers’ ongoing shift toward opting to make healthier choices. The sparkling water category across traditional beverage and alcohol beverage categories taps into several health and wellness trends popular with Americans today, such as the appeal of a low carbohydrate and low calorie option would could potentially be seen as a low guilt beverage and an offering that is gluten free. Beyond the potential health benefits consumers see, these drinks can be refreshing, provide interesting flavors and, within the beverage alcohol market, its versatility could appeal thanks to its ability to be part of a cocktail mix.  

Some insights from this article were fueled by Nielsen Friday morning data delivery, the earliest FMCG market read available. Learn more about Friday morning data delivery.

*Friday morning data represents all Nielsen-measured channels excluding convenience.

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