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Introduction

Packaged water is commonly available as bottled water in plastic containers or sometimes glass. It is also traded as boxed water or tinned water. In the food and beverage industry, the packaged water market is one of the most dynamic and fastest growing markets. Growing health concerns, increasing disposable income, availability of potable water in various flavors, and portability of hygienic water have a significant role to play in the growth of packaged water market.

The global bottled water market is valued at about $202 billion in 2015 and it is expected to reach $280 billion in 2020. While bottled water profit margins range from 20.0 to 500.0 percent, water itself could account as less as 10 percent of that production cost. The remaining production cost is attributed to labor, packaging, logistics, and marketing.

Need for the New “Bottle”

Water bottlers that use plastic materials for packaging often face institutional protests such as environmental groups, as it is a known fact that plastics are perceived detrimental to the environment. Although recycling of such materials is possible, recycling uptake is not consistent by country or region.

Furthermore, recycling of plastic bottles is more feasible for polyethylene terephthalate (PET) bottles. In addition to high energy consumption and carbon dioxide emissions involved in the production of plastic bottles, the production of one liter of bottled water demands 300 to 350 milliliters of oil and 3 liters of water, on an average.

Next, innovation in packaged water market has led to the introduction of edible and plastic-free material for the production of bottles. One example of such materials is biodegradable seaweed and is safe for human consumption. This membrane-filled water orb is similar to a man-made fruit and can be used to carry large quantities of water by packing a number of the similar orbs into a larger and thicker membrane, like an orange.

These orbs can be used to carry plain water, flavored water, and also carbonated water. However, major weaknesses of water orbs are its reduced portability and durability when compared with conventional water bottles.

Market Opportunities and Challenges

Replacing conventional bottles with water orbs may be inherently innovative. Importantly, it reduces production cost of packaged water as each orb reportedly costs 2 cents to synthesize. Even if water orbs accounted half of conventional production cost, they provide competitive advantage to water packagers.

The main advantage of using water orbs is possible decrease in production cost of packaged water, as each orb costs only 2 cents to synthesize, unlike plastic-bottled water where major costs are incurred in packaging only. Less production requirements in terms of resources and leaving no litter behind make orbs environment friendly. As a result, these have a substantial potential to challenge the sales of the petroleum-based plastic packaged water as being sustainable and non-toxic packaging material it will appeal to eco-conscious consumers specially.

Irrespective of its ability to be the market changer, water orbs are not likely to replace conventional bottles, at least in the next five years. Design and functionality challenges need to be addressed – sturdiness, leakage, and shelf life – all of which conventional bottles could administer. Therefore, more work still needs to be put in to improve the physical properties of the orb’s membrane.

In addition, critics argue that there are risks on hygiene issues due to the nature of its design, and water orbs are facing other associated challenges such as skepticism on food safety by consumers.  While these consumerism challenges are deemed barriers that can be overcome, it is an uphill task to overtake the legacy of bottled water at the top level, in addition to consumer awareness and ergonomic issues.

Case Study

Ooho!- Water you can eat

Ooho! is product name of a biodegradable water “bottle” that eliminates the use of plastic packaging. It is developed by London-based Skipping Rocks Lab and it uses biodegradable seaweed (algae) and calcium chloride-based edible membrane. Its design is based on the way nature stores water as little blob. To create these blobs, spheres of ice are treated with a liquid form of the seaweed-derived membrane. As the membrane solidifies and the water melts, this creates a portable and eco-friendly serving of packaged water. Ohoo! received about $30,000 in sustainability grant from the European Union for its initiative to scale the market competitively.

Wikifoods – Food as packaging

Quantum Designs is a nutrition delivery company that aims to broaden food experiences and enhance human health with least impact to the environment through its Wikifoods technology. Wikifoods technology serves foods and beverages in edible packages made of natural ingredients that serve as source for nutrition.

Wikifoods is a working example of how innovatively edible packaging can be used with little environmental impact. Similarly, water can be packaged in flavored membranes that add nutritional value to the water orb products.

Conclusion

Moving forward, water orbs or edible packaging are likely to gain market acceptance, but these are not likely to replace conventional bottled water. These are also likely to change the regulatory landscape, pertaining to food and beverage, when governments begin to see the benefits of such environment friendly solutions. Additionally, consumer confidence needs to be gained with continuous awareness creation. Emerging market participants with similar innovations are expected to disrupt the conventional market of bottled water, mainly in developed economies.

About Frost & Sullivan

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