NetworkNewsWire Editorial Coverage: As recently as 2015, the retail sales for alkaline waters, those with a pH between 7.0 and 10.0, were less than $95 million. With consumers taking a more proactive approach towards health, alkaline sales are booming. Industry authority Beverage Marketing Corp. forecasts retail sales in the category to balloon to $1.3 billion by 2023, representing 20% of the entire value-added water category. Drivers abound to support the 42.6% compound annual growth rate for the forecast period, which are undergirding exponential growth for The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) (Profile), the largest independent alkaline water company in the United States. Major grocers, including Walmart Inc. (NYSE: WMT), BJ’s Wholesale Club Holdings Inc. (NYSE: BJ), Costco Wholesale Corporation (NASDAQ: COST) and the Kroger Company (NYSE: KR), have benefited from and are following the category trend, many bottling their own alkaline brands while stocking their shelves and distribution centers to increase options and meet consumer demand.
- COVID-19 has created new retail opportunities as some channels explode with demand and others are re-emerging as economies re-open.
- The Alkaline Water Company is the country’s largest independent alkaline water company and over the past month ranked eighth in the broader functional water category.
- WTER is focusing on reaching up to 100,000 retail locations through high-growth channels.
- WTER has 33 consecutive months of year-over-year revenue growth.
COVID-19 Strengthens Consumers Love of Alkaline Water
Barely known to anyone a decade ago, alkaline water today has captured the attention of consumers worldwide. While some contest that health claims aren’t substantiated by clinical research, proponents of alkaline water hail it for myriad benefits, such as stabilizing the body’s natural pH level, which can be thrown out of whack by acidic diets; and facilitating faster body rehydration postworkout, among other things.
COVID-19 reshaped some aspects of how the world transacts, with certain sales channels stronger now than before the pandemic, including e-commerce, big box and warehouse clubs. Consumer package goods (“CPG”) companies are adapting to, taking advantage of and making moves in these channels. Other markets that took a hit because of COVID-19, such as hospitality, food services and travel, are coming back to full strength, which creates more opportunities for CPG companies to expand distribution and sales against the backdrop of shifting consumer habits to emphasize health as these channels aim to re-energize revenue.
As counterintuitive as it may sound, crises create some strong sectors, and alkaline water seems to be a benefactor of a confluence of market drivers. The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) is already a dominant player in the market and is strategically expanding its flagship Alkaline88(R) portfolio into the aforementioned channels via new targeted distribution points. The company is aggressively growing, adding key personnel, expanding infrastructure and developing new products tapping lucrative emerging markets.
The expansion should further cement Alkaline88’s position in the broad value-added water market and alkaline water subcategory. The brand already outpaces sales at the next closest independent peer by fivefold and, over the last 12 months, weighs in as the 10th-largest brand of any type of value-added water. What’s more, Nielsen data shows that Alkaline88 outperformed the whole value-added water market during the 52 weeks ending September 11, 2021, by 12.8% and 17.5% in dollar and unit volume respectively. And that was before the advertising featuring the brand’s new brand ambassador, basketball legend Shaq O’Neil, has hit televisions and mobile devices.
C-Ya Pepsi, Alkaline88 Shines
The list of accomplishments to date for WTER and Alkaline88 are impressive. The company has posted a stunning 52% compound annual growth rate (“CAGR”) over the last six years and 33 straight months of double-digit, year-over-year growth on its way to becoming the eighth-largest enhanced water company in the country in the past month for the four weeks ending Sept. 11, 2021, according to Nielsen Total US Food data.
In order to reach no. eight, Alkaline88 passed LifeWTR, the premium enhanced water product launched by beverage juggernaut PepsiCo in 2016. Currently, Alkaline88 is available in more than 75,000 stores throughout the country. The company is targeting a range of 90,000 to 110,000 retail locations by the end of fiscal 2022. Already in leading grocers such as Kroger, HEB, Aldi, Meijer and Publix as well as in large retail chains such as Rite Aid and as a Prime product on Amazon.com, WTER is looking to slingshot the organic success by adding high-growth channels, big box, club and specialty retail, hospitality, and foodservice to the mix.
And there’s plenty of green grass ahead as indicated by Alkaline88’s relatively low all commodities value (% ACV) of 46%. % ACV is an industry metric that measures a store’s total sales of all products compared to the sales of all relevant retailors in the same territory. In short, % ACV doesn’t pay attention to physical store size or number of products, it hones in on how much product is being sold. A stat of 46% suggests there is plenty of important retailers available. Understanding % ACV let’s companies prioritize regions and sales points that can immediately have a positive effect on sales.
Triggers for Another Growth Phase
The Alkaline Water Company crossed a major milestone in the club channel this month by landing warehouse club goliath Sam’s Club as a retailer. Starting next month, Deliciously Smooth(TM) Alkaline88 one-liters in a convenient 12-pack will be available to millions of Sam’s Club members across all 587 of their locations throughout the United States.
Sam’s marks the company’s first foray into wholesale clubs, while Alkaline enters other target markets for WTER. The company recently announced that its flagship product, Alkaline88, will soon be available in nine major U.S. airports including JFK, La Guardia, Chicago O’Hare, Orlando International and others serving hundreds of millions of passengers every year. WTER also partnered this summer with Premier Distribution Services, which will put Alkaline88 in more than 800 gyms, fitness centers, and spas nationwide.
Pitman, Shaq Suit Up for WTER
The Alkaline Water Company has recruited two big names to join the WTER team. Chris Pitman has come onboard as director of e-commerce, with one of his first tasks overseeing a new partnership between The Alkaline Water Company and an unnamed turnkey e-commerce agency. Pitman previously was director of e-commerce and digital merchandising with Essentia, a leading premium functional water brand acquired by Nestle in March. During his time in that role, Pitman helped grow the brand’s overall e-commerce channel sales performance by more than 160% over a three-year period.
While not everyone may recognize Pitman’s name, nearly everyone has heard of basketball Hall of Famer, actor, musician and TV personality Shaquille O’Neal, who joined WTER as a member of the board of directors and brand ambassador. Shaq, who has similar positions with Papa John’s Pizza, is known for being selective in companies he will endorse or work with, saying he must truly like the product before he’ll attach his name to it. Once post-production is complete, the company will launch an omni-channel traditional marketing campaign featuring Shaq endorsing Alkaline88.
Water, Water Everywhere
Samuel Taylor Coleridge’s albatross-shooting seaman in “The Rime of the Ancient Mariner” surely would have wished his ship was stranded in a water aisle at a large grocer today; he’d have more than a drop to drink. Companies are looking to capitalize on the trend away from sugar drinks and into the full spectrum of waters, albeit simply purified, carbonated, flavored or pH-balanced and electrolyte-infused.
Walmart Inc. (NYSE: WMT) is the world’s biggest retailer and owner of Sam’s Club, where it is recognized for its popular private label brand, Member’s Mark. Under that moniker, Sam’s sells its own alkaline water that it trumpets as “supercharged with electrolytes for a smooth, refreshing taste.” The water sales chipped into overall sales at Sam’s Club that totaled $64 billion during the fiscal year ended January 31, 2021.
BJ’s Wholesale Club Holdings Inc. (NYSE: BJ) has a robust lineup of functional waters it sells to members online and in its 222 clubs and 151 BJ’s Gas(R) stores located in 17 states. Brands include Essentia, San Pellegrino, Vita Coca, Hint and more, which all contribute to growing sales for BJ’s. Net sales during Q2 fiscal 2021, the period ended July 31, 2021, increased 5.6% year over year to $4.1 billion, aided in part by a 7.6% increase in revenue from memberships, which reached $88.75 million.
Costco Wholesale Corporation (NASDAQ: COST), the world’s second-largest retailer behind Walmart, has its own alkaline water sold under its Kirkland brand in its clubs and online. Costco operates 817 warehouses, including 565 in the United States and Puerto Rico, 105 in Canada and 39 in Mexico with the remainder spread across nine countries as well is e-commerce sites in eight countries. After beating analysts for Q4 sales, revenue keeps coming in at Costco, which reported net sales of $19.50 billion for the retail month of September, the five weeks ended October 3, 2021, an increase of 15.8% from $16.84 billion last year.
The Kroger Company (NYSE: KR), the nation’s largest supermarket chain, sells its own branded alkaline water among a list of 233 water products. Kroger remains at the leading edge of all consumer trends, last month teaming up with Instacart to launch Kroger Delivery Now nationwide. Powered by a virtual convenience store that is fulfilled by the Kroger Family of Stores, customers can order and receive fresh food, household essentials, meal solutions and snacks from early morning to late at night delivered to their doors in as little as 30 minutes.
It is often said that “the trend is your friend,” and there are certainly several trends revolving around the food and beverage sectors that command attention. Water, particularly premium functional types, is a strong one that is building momentum with no indications of slowing down.
For more information about The Alkaline Water Company, please visit The Alkaline Water Company.
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