Patty Johnson
Patty Johnson, is a Global Food & Drink Analyst at Mintel. She brings insightful and forward-thinking strategies and tactics to Mintel’s food and drink client base.

Concerns over the healthfulness and sugar content of carbonated soft drinks (CSDs) are causing some consumers to decrease their consumption, creating new opportunities for flavored sparkling water to supplant CSDs as a healthier and lower-sugar alternative.While flavored sparkling water is not a new concept, it is proving to be the fastest growing segment in the US bottled water market, with help from brands that have seen successful sales growth such as LaCroix.

However, the category is still struggling to reach consumers as just 19% of Americans reported they drank flavored sparkling water in 2017, according to Mintel research on the US bottled water market. While usage among Americans overall is relatively low, sparkling water can attract the attention of Millennials who are the most likely to be interested in flavored/unflavored sparkling water.

PepsiCo’s bubly shakes up the sparkling water category

Enter Pepsico’s bubly. Positioned as fun, playful and relevant, bubly is packaged in a can that features a different design and message for each of its flavors: limebubly, grapefruitbubly, strawberrybubly, lemonbubly, orangebubly, applebubly, mangobubly and cherrybubly.

It seems bubly’s entertaining positioning is working for the brand as US consumers are significantly more likely to consider bubly to be ‘fun’ than other sparkling waters, according to Mintel Purchase Intelligence, driving purchase intent of 38%, significantly higher that the score of 32% for other sparkling waters. What’s more, bubly scores higher than other sparkling waters on the attributes that correlate highly with purchase intent, include ‘exciting,’ ‘tasty,’ ‘fun’ and ‘good value.’

Other sparkling waters outperform bubly when it comes to attributes such as ‘premium’ and ‘trustworthy brand,’ but this will likely improve as consumers gain familiarity with the new product line.

Bubly is also highly appealing to younger Americans as half of consumers aged 18-34 say they would be interested in purchasing bubly compared to 43% who said the same for other sparkling water.

Opportunities in the market

Attracting consumers who are slower to adopt can help achieve sparkling water’s full market potential. The market reveals key opportunities in this space:

  • Citing taste, a significant portion of carbonated soft drink consumers would like to see more all natural soft drinks, including naturally flavored sparkling water products.
  • Sparkling water can capture additional market share with by positioning products as low-sugar, healthy alternatives to high-sugar soft drinks.
  • New brands can leverage the ‘fun’ energy that category drivers such as LaCriox and bubly bring to the sparkling water segment.

What we think

Major non-alcoholic beverage category players should highlight the satisfaction consumers find with CSDs and sparkling water, emphasizing choice and variety in marketing communications. Mintel research shows that carbonated soft drink consumers also drink sparkling water, suggesting that a taste for carbonation may allow considerable crossover. Flavors tied to nature are winners in the sparkling water segment with top-performing flavor profiles those which include citrus fruit, berry and tropical flavors. Bubly’s use of fun marketing and vibrant promotions to match its fresh flavors paves the way for other sparkling water brands to carve out their place in the carbonated drink market.