Bottled Water Industry - Global Overview
Across
the globe consumers have reached into their pockets to the tune of $50 billion
dollars this year to purchase bottled water. In the United States
consumers have reached into their pocket to the tune of $10.8 billion dollars
to purchase bottled water, which is a tremendous statement as to consumer’s
support of the bottled water industry.
The
latest upward trend in the purchasing power of bottled water was reflected in
2006 when total bottled water volume exceeded 8.25 billion gallons, a 9.5
percent increase over 2005, and the 2006 bottled water per capita consumption
level of 27.6 gallons increased by over two gallons, from 25.4 gallons per
capita the previous year. Additionally, the wholesale sales for bottled water
in 2006 increased 8.5 percent over 2005.
The Exploding Bottled Water Industry
Twenty years ago,
bottled water was a bubbly status symbol served mostly in a Perrier bottle.
Then Jack Nicholson sneaked a liter bottle of Evian into the
no-beverages-allowed celebrity section at the Academy Awards. Sales of the
French non-carbonated water gushed almost overnight. Over
the years bottle water has grown exponentially. Over the last five years,
global bottled water sales have recorded an average annual growth rate of 10%,
outpacing the soft drinks category as a whole, which grew annually at 6%. Today
bottled water is the fastest-growing beverage category in the world and the
preferred beverage of choice in our present on-the-go society. Not to mention
the fact that bottled water makes a culture statement…the brand you drink says
a lot about you and has become as much a part of our society as designer jeans.
"While all beverages have their role in a marketplace with an abundance of drink
choices, consumers are choosing bottled water as a refreshing, hydrating
beverage and as an alternative to others that may contain sugar, artificial
sweeteners, caffeine, artificial colors, and artificial preservatives or other
ingredients, which they wish to moderate or avoid," said Stephen Kay, IBWA
vice president of communications. "For instance, during 2006, individual
servings of bottled water in sizes of 1.5 liters and smaller accounted for
57.1% of the volume of bottled water sold, indicating that consumers are choosing
bottled water in lieu of other bottled drinks."
It
is interesting to note that the future demand will partially be boosted by
today's youth and teenage and sector who, unlike the older generations, have
been brought up drinking bottled water and find nothing wrong with paying for
it.
With the continuing pursuit of healthier lifestyles and aggressive marketing, the
increased sales in bottled water (not including the enhanced waters which I
cover elsewhere) is still showing unprecedented growth with few signs of
slowing down. Gary
Hemphill, managing director of Beverage Marketing Corp. in
New York said, "The single biggest
factor driving sales of bottled water is health and wellness." Further stating that, "People see it as
a healthy alternative." Just one
research note from Sheffield University, England, has indicated that women who stay hydrated by drinking the recommended daily
amount of water could reduce their risk of breast cancer by 79%. Furthermore the
study concluded that drinking more than five (5) glasses of water a day could
lower the risk of colon cancer by 45% and bladder cancer by 50%.While
the category is growing even more forcefully on a global scale in the U.S., the
volume is unparalleled.
U.S. Bottled Water Industry: With Graphs
The bottled water industry in the U.S. has seen an average annual growth rate of 9.8% for the five years through
2006. Bottled water emerged as the second largest commercial beverage category by volume in
the United States in 2003, and, despite its significant stature, it continued to grow at a rapid
pace in 2005. The annual preliminary
estimated percentage change for 2006 is to be .5% over 2005. In
2005, total U.S. category volume surpassed 7.5 billion gallons, a 10.7% advance over 2004’s
volume level. That translates into an average of 26.1 gallons per person, which
means U.S. residents now drink more bottled water annually than any other beverage, other
than carbonated soft drinks (CSDs). April
2007 US bottled water sales and consumption continue to rise, as consumers increasingly choose bottled water over other beverages.The
International Bottled Water Association (IBWA), in conjunction with Beverage
Marketing Corporation (BMC), released bottled water statistics for the year
2006 showing that total bottled water volume in the country exceeded 8.25billon
gallons. The figure represents a 9.5% increase over 2005. The
2006 bottled water per capita consumption level reached 27.6 gallons,
increasing by over two gallons from 25.4 gallons per capita the previous
year. Additionally,
the wholesale dollar sales for bottled water exceeded US$10.8bn in 2006, an
8.5% increase over the $10bn in 2005.
If one were to look at the overall average growth rate of the US Bottled Water
Sales in Billions, from 2001-2006 the chart would look like the chart below,
which reflects not just that the bottled water industry in the U.S. has seen an
average annual growth rate of 9.9% through 2005, but that from 2001-2006 we see
an excess of 40% growth in millions of dollars
The
following chart illustrates the per capita consumption of bottled water which
has been growing by at least one gallon annually, thereby more than doubling in
a decade.
Since FiberWater can also be produced as sparkling water,
the chart (below) becomes very significant as those numbers should be factored
in as well. Further,
most all of the imported waters pride themselves on their mineral contents. FiberWater can also be remineralized under the purview of my patents so as to compete with, or more importantly,
surpass the imported water’s mineral benefits.
Major Players In The U.S. Bottled Water Market
In 1992 in the United States alone one could find seven hundred (700) brands of bottled water, and today
over a thousand (1000), and the number continues to grow. US companies control nearly half of the world market as well, with the top five
companies earning billions in sales.
Nestle Waters of America
Nestle is the largest food company in the world and the largest seller of bottled
water in the United States. Its brands include Poland Spring, Perrier,
and Arrowhead. Annual water sales in the U.S. are estimated at $2,7 billion. In 2002, Nestle consolidated its dozens of
bottled-water brands worldwide into a single subsidiary, Nestle Waters. The
division now accounts for nearly 10 percent of the Swiss food conglomerate's
total worldwide sales, with almost half of that amount coming from North America. Nestlé Waters’ recent announcement of its
acquisition of Powwow Group, one of the leading players in the European bottled
water Home and Office Delivery (HOD) market, has been just the latest in a recent
flurry of M&A activity by the world’s top water producers for control of
the lucrative HOD industry. The company announced on February 3rd that it would
acquire Powwow for US$ 603.3 million, over four times Powwow’s 2002 annual
turnover.
Pepsi
Pepsi
Co. sells Aquafina, the leading brand of bottled
water in the
U.S.
Total water sales for the company are
estimated at $1.1 billion.
Coca Cola
Coca
Cola offers bottled water under the Dasani brand. Its enhanced water offerings
include Dasani Plus and Water Plus. Annual water sales (2006) are estimated are
$1 billion.
Danone
Group Danone offers brands such as Evian, Danone, and Sparkletts. Sales are estimated at $800 million per year
in the
U.S.
Fiji
Fiji Water is imported from the island nation of Fiji, and has seen tremendous sales growth in the
United States
market. Sales are estimated at $48 million for the
year 2006.
International Bottled Water Market: Overview
Internationally,
the bottled water industry is in its infancy, but growing fast. Bottled water consumption has been tripling in India
and more than doubling in
China
over the past five years. Just Drinks believes that this region will continue
to be the engine-room for growth in the industry for years to come. In fact, it
is likely that over the next few years, up to and probably beyond 2010, the
growth rate will accelerate, and that Asia Pacific will become the world's
largest regional market for packaged water. Growth is observed by watching the major multinational players as they
move into these areas, establishing joint ventures with leading local suppliers
and bottlers as well as through acquisitions," said report author Michael
Myers.Western
Europeans remain the biggest bottled water consumers, guzzling a little more than
a quarter of the world’s production. This is not at all surprising since two of the largest players in
packaged water are a Swiss company, Nestle, and the French company, Danone. Besides,
there has been a culture of drinking bottled water with wine at meal times in
many European countries, especially
France
. Today
Western
Europe is certainly a market for packaged water and with the
enhanced water just becoming noticed analysts are very optimistic towards the
growth of the industry. Even in the
UK
, where
consumers have skeptically stuck with tap water for many years, the bottled
water market rose 50 per cent between 1999 and 2004, according to data from
market research group Mintel.
Eastern
Europe (not shown in the graph) is also showing sizable industry growth noting
that
Russia
alone has shown around a 15% increase in sales.In
a September 13th 2006 article from the just-drinks.com editorial
team, titled "
UK
: Eastern
Europe primed for water growth", it is noted that "Eastern
Europe is set to provide impressive growth for bottled water
companies…" "East European growth promises to remain strong for a number of
years to come," said Zenith research director Gary Roethenbaugh.
"We expect volumes to exceed 11bn litres in
2006…" With average bottled water consumption per person at 33 litres in East Europe, compared with 108 litres in West Europe, the region offers impressive growth
potential, said Zenith. Poland was the largest consumer of
bottled water last year, accounting for 23% of total volume.
Russia
was second at an advancing 21% and
Romania
was
third with a 10% share. In terms of growth rates,
Bulgaria
led the way with a 22% increase,
followed by
Hungary
,
Estonia
and
Russia. Eleven of the 15 countries
analyzed experienced growth rates in excess of 5%.However,
as you’ll read below, other countries are catching up with the Western European
Market. The Asia/Australasia region is thought to be on the verge of taking
over the number one spot, with
China
and
Indonesia
pushing the
top five and likely to relegate
Italy
to fifth by 2008, says Zenith.
Bottled Water Consumption – LATIN AMERICA
From
2000-2005 the compounded annual growth rate for bottled water was 9.6% higher
than any other beverage category.
However
over the last five years Latin American Bottled Water sales increased
approximately 14% per year.South
America
bottled water sales have achieved consistent growth in recent years, despite
economic difficulties which affected many countries at the start of the decade.
This is attributed this to not just the perception of bottled water as a basic
foodstuff but also a growing awareness of health and wellness issues. The
region is led by Mexico, which boasted sales of more than 14bn liters in 2005, giving it a 45% share
from consumption of over 130 liters per person. Brazil follows with a 25% share from a volume of 7.6bn liters.Per the below graph the United States
and Mexico, were the largest national markets in 2004. Five year growth rates through 2005
for the world’s leading consumers include 16.5% for
China, 23.4% for India, 12.4% for Brazil, 8.6% for Mexico Note: FiberWater has Intellectual Property coverage in every country below except Indonesia.
FiberWater has Intellectual Property Coverage in eleven (11) of the fifteen (15)
major global water markets.
Annual sales for the global bottled water industry were about $35 billion in 2005,
with approximately 43 billion gallons of bottled water sold per year. Global annual growth rates for consumption of
bottled water averaged 8.7% for the period 2000 to 2005. Following is a chart showing the geographic
distribution of global sales. Most important according to several analysts,
bottled water sales will top $50 billion by the end of 2007.
Referencing the above chart…
Bottled Water Consumption – ASIA
For the five year period through 2005, bottled water consumption in Asia increased at a 13% annual rate.
Just-drinks.com forecasts that the Asia Pacific market for packaged water will grow by a factor
of more than 2.5 times between 2004 and 2010. This means that, in volume terms,
by 2010 the market is projected to reach 135 billion liters, an increase of
255.3%,"
INDIA
In India bottled water sales were $250 million dollars. Now their bottled water industry is growing at a rate of 70%-100%
annually so that figure will change drastically.
CHINA
China’s bottled water expansion began in the 1990’s. Before then it was
not seen as a suitable substitute for traditional boiled water. Many years of
product education coupled with economic development have driven the category
forward, and it regularly records double digit growth, states Canadean’s Chinese Soft Drink Report. Bottled water continued to lead the Chinese
non-alcoholic beverage market in 2005 in terms of size, although the market has
not yet been fully developed with regard to brand loyalty, industry standards,
and consumer awareness, Canadean says. Focusing on future opportunities, the key
players are advancing by progressing infrastructures and distribution networks
in order to gain leverage before a brand war starts, industry wide.
KOREA
In the Korean market bottle water is on a rise while traditional Korean drinks are on a decline. South Korea’s bottled water market is booming despite overall sluggishness in the countries
beverage sector. The countries bottled water market which expanded to about
$300 million last year, is expected to rise another 20 billion in 2005.
AUSTRALIA
Australia has experienced a 20%
growth in bottled water sales from last year with over 1000 brands of water
available in the country.
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