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It’s nice when you discover that your organization can also benefit from the longstanding, epic battle for market share between Coke and Pepsi.

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18 researchersiA recent Wall Street Journal article announced: “With a flood of new brands, water is on track to outsell soda by 2017.”

Big news! Yes, for the rest of the world, but not for hospitals where bottled water sales already outpace bottled soda sales. In fact, in the last two years we’ve seen the growth of bottled water sales accelerate in hospitals.

 Salient facts include

    • In 2104, bottled water accounted for 52.9% of sales (bottled soda was 47.1%)
    • Current 2015 figures show bottled water sales at 56% and bottled soda dropping to 44%. We anticipate this trend holding steady through the end of the year.
    • It is important to note that this comparison (similar to the WSJ piece) is between bottled water and bottled soda only. Soda still outpaces all other beverages consumed on hospital campuses when all beverage packages are included, i.e., cans and fountain drinks.

 (These findings were derived from Enliven’s proprietary database that includes detailed beverage sales and distribution information at more than 330 client hospital facilities nationwide.)

Three reasons why hospitals sell more bottled water than bottled soda:

1. Healthy food and beverage consumption is aggressively promoted.

For many years now, most hospital leadership teams have actively promoted healthy food and beverage choices for patients and employees. This emphasis on smart wellness decisions has encouraged many on campus to move away from sugary soft drinks to better-for-you water selections. Patients, visitors and staff are frequently exposed to very direct educational messaging that encourages this shift, even at the point of sale--on cafeteria coolers and the fronts of vending machines.

2. Consumer choice is limited and directed in tangible ways that de-emphasize soda.

Hospitals, more so than any other venues (with the possible exception of colleges and universities), tend to limit the amount of soda that is marketed and distributed on site. These limits are imposed in very real and tangible ways.

For example, a typical self-serve, eight-valve fountain drink machine at a restaurant might have seven valves dedicated to various full sugar and diet soda products and, maybe, one valve dedicated to a non-soda product. Whereas that same fountain unit in a hospital may have one valve dedicated to a full sugar soda option, three valves dedicated to diet soda options and four valves dedicated to non-soda options like teas, sports drinks, juice drinks or flavored waters.

Similarly, on hospital campuses, it is very common for cafeteria coolers and vending machines to have most of their shelf space dedicated to non-soda beverages. All of this leads to more consumer trial and, eventually, consumer preference for non-soda drinks over soda drinks. This, in general, contributes to the growth of bottled water consumption over soda consumption in the hospital channel.

3. Heightened anxiousness about tap water.

Anecdotal evidence suggests that some in hospitals (especially visitors) are hesitant to use water fountains and tap water because they are worried about the spread of illness. These concerns are undoubtedly unfounded, but, nevertheless, they exist and they do cause some people to opt instead for bottled water. The sealed bottle cap offers a perceived assurance of purity to them. (For more on this topic, see this recent New York Times Q&A: Ask Well: What Diseases Can You Get from a Water Fountain?

The negative: Too many plastic bottles
While it’s great that people are drinking more water than sugary sodas, plastic bottles (whether filled with soda or water) are terrible for the environment. According to the National Association for PET Container Resources (NAPCOR), nearly 70 percent of all plastic bottles distributed in the United States are not recycled. And, of the bottles that are recycled, only a portion of the recycled material can be reclaimed for commercial reuse.

But, there are answers to this issue. In 2008, SSM Health, one of the largest integrated health care systems in the United States with headquarters in the greater St. Louis area, decided to eliminate all plastic bottles on their campuses in the four states in which they operate. By partnering exclusively with Pepsi on this ongoing initiative, the seven SSM Health Care-St. Louis hospitals and related facilities were able to eliminate plastic bottles altogether.  

You can read more about that effort here: Enliven Case Study for SSM-St. Louis.

The Bottom Line
Hospital campuses are unique and complicated environments for beverage sales and distribution. In many ways, especially when it comes to the promotion and adoption of healthier lifestyle choices, hospitals are at the vanguard of change. That being said, there are many realities and business drivers in this channel that simply don’t exist in other channels.

No one understands this more that we do. We’d love to put our expertise to work for you. I invite you to call (615.777.8565) or email me soon (tim@enlivenpartnership.com).

 

 

We Don't Want Your Money

We want to dramatically increase how much money you make - or save - with respect to beverages. And
then we want to take a small percentage of that new money that we earned for you. That’s our
pay-for-performance model. It ensures that our incentives are aligned. It's why our clients
think of us as a true strategic business partner and not just a vendor.

 
 
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Established 2005
4322 Harding Pike, Suite 417

Nashville, TN 37205
615.850.4420
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