Globally,
consumers are trending more and more towards healthy beverages and away from
soft drinks that are high in calories, often containing either HFC
(high-fructose corn syrup) or some form of artificial sweetener like Aspartame.
Today, huge numbers of consumers worldwide are opting instead to enjoy a
growing diversity of bottled waters, creating particularly choice markets for
higher-end still waters, as well as a range of sparkling/mineral waters. The
broader retail bottled water market is on track to grow nearly 30% by 2018 to
around $17B, according to a breakdown of Simmons National Consumer Survey data
in a recent report by Packaged Facts, with the sparkling water segment, which
more than doubled between 2008 and 2013, on-track for a roughly 25.6% CAGR,
topping out around $4.1B in 2018.
Strong
receptivity among health-conscious consumers to bottled waters can be seen in
the 22% growth rate over the past decade among U.S. adults. Companies like True
Drinks (OTC: BAZI), known for their vitamin-enhanced, naturally flavored
waters, as well as innovative fruit-juice blend and enhanced water beverage
companies like private firm SOBE (South Beach Beverage Company), both of which
use all-natural Stevia leaf extract as their base sweetener, have been taking sizeable
chunks of the beverage market from sector majors like PepsiCo (NYSE: PEP) and
Coca-Cola (NYSE: KO).
Pepsi
and Coca-Cola have both had to shift gears to appeal to this still-growing,
health-conscious beverage market, with products like Aquafina and Vitaminwater.
A Similar shift has taken place at Nestle (OTC: NSRGY), whose Resource brand
targets the lucrative premium bottled water segment. On the global stage,
shrinking supplies of high-quality drinking water are setting up incredible
momentum for bottled water products, with a Netscribes report last year
indicating a 140% rise in bottled water consumption, led by health concerns
over the availability of safe drinking water, combined with burgeoning
population numbers.
Domestically,
there are only a handful of dynamic and yet highly investor-accessible plays to
be made in the premium bottled water segment, with Boreal Water Collection
(OTC: BRWC), a personalized bottler of private label water and a purveyor of
their own brands of award-winning water products, being a lead example. BRWC
has a vast array of bottle types to choose from and simply requests graphics
and labeling direction from clients, able to deliver the entire spectrum of
waters, from premium, functional and vitamin-enhanced, to caffeinated, natural
spring, and sparkling waters.
Perhaps
even more important is Boreal’s superb logistical story, with exclusive access
to two pristine and abundant premiere springs, one in the untrammeled, rocky
terrain of the Catskill Mountains in up-state New York, and the other deep in
the untouched wilds of Quebec, Canada. In this business, premium water quality
is key to capturing the taste buds of consumers and keeping them coming back
for more product and the Q3 FY14 growth BRWC highlighted last month, driven by
strengthening of their core product lineup and expansion of their global client
list, makes this fact as clear as the natural springs their waters come from.
BRWC
saw a 14% jump in YoY sales for the third quarter of 2014, with a handsome 57%
increase in gross profits, on strong performance from their distribution
network, co-packing/labeling businesses and a winning sales strategy that has
increased traction for their brands, with both new and old customers alike. The
mineral-rich Precambrian Era rock strata at the company’s primary spring in the
Catskills, no doubt plays a large role in the company’s success, especially
with their high-end private label clients. Furthermore, brand awareness
initiatives, like the company’s CEO, Francine Lavoie, doing a major exhibition
at China’s top food and beverage industry trade show last month, during the FHC
China 2014 Show in Shanghai, are helping to seriously bolster the Boreal
brand’s overall global market presence.
For
more information on Boreal Water Collection, visit: www.borealwater.com
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