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| BOTTLED WATER |
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| Executive Summary |
| Bottled Water - Market Assessment
There have been a number of social and economic factors that have continued to drive the bottled water market forward, even through the recession of 1989 to 1993. These include the acceptance of 'buying water', with drinking bottled water becoming a more mainstream activity, in the late 1980s and through the 1990s, compared to being viewed more as exclusive or trendy, prior to that time. Additionally, changes in work and lifestyles have benefited the market. The trend away from family mealtimes and towards individuals eating when convenient to them, in part as a result of the increasing numbers of working women, has led to significant growth in the value of 'convenience'. Also, the recession led, through sweeping redundancies, to leaner resourced companies and fewer employees having to cover more work. This resulted in an increase in working lunches, featuring takeaway foods and drinks, at the expense of restaurants.
But, arguably, the main driver has been the continuing interest in health and fitness, aided by programmes and articles in the media, which has led younger females, particularly, to buy and drink bottled water. Producers, thus, very often use sport and fitness related images in their promotions. This health factor has been supported by occasional drinking water pollution incidents (e.g. chemical spills, leaching of fertilisers, etc. into rivers), increasing the numbers of people drinking bottled water. Lastly, the weather is, undoubtedly, an important factor in market growth, with spells of hot weather increasing sales of bottled water substantially. However, 2000 was a very poor year for sunny weather, yet bottled water sales still showed a significant increase.
The consequent dynamic nature of the bottled water market, showing strong volume and value growth and significant changes in its segmentation, has been the reason for Key Note continuing to cover the sector. Attracting younger (and female) purchasers, in particular, the market has switched from being split equally between sparkling and still water, to substantially still, and from supply being met significantly from imports, to UK sourcing. This has led to the spring (and 'table') water segment increasing at the expense of natural mineral water.
The major sources of data used have been ACNielsen, whose retail audits cover all the most substantial outlets in detail, and Zenith International, whose research covers the total soft drinks market. Additionally, NOP has been exclusively commissioned by Key Note to investigate agreement to selected statements regarding purchasing and consumption of bottled water, with answers identified principally by sex, age group, socio-economic status and geographic region. As a whole, this report presents the most complete and up-to-date coverage of an important grocery sector, with information on market size and segmentation, producers and retailers, market and consumer trends and forecast sales, over the next 5 years.
Bottled water has increased its share of the total soft drinks market 1990, to and 2000. Volume share is predicted to continue to increase over the period to 2005. A substantial proportion of sales are estimated to have been made through retail outlets, in 2000, with the remainder being made through the on-trade and catering outlets and 18% through use in office water coolers.
A dominant, and increasing, share of retail sales of bottled water, according to ACNielsen's retail audit coverage, goes through grocery multiples/co-ops . The balance is made through petrol station forecourt shops, grocery independents, off-licences and CTNs (confectioners, tobacconists and newsagents). However, ACNielsen does not cover the wide range of other outlets through which bottled water is available. These include variety stores, medicines/toiletries retailers, department stores, sandwich and snack shops, kiosks, railway/airport shops, garden centres, etc., and it is estimated that retail outlets other than grocery multiples could account for a significant proportion of sales volumes. The fact that sales by value substantially exceed volume, through these smaller 'impulse' outlets, makes them of significant interest to producers of bottled water brands, particularly those who do not make for own label. These producers can largely avoid competition with
own-label brands, at these outlets, and also achieve higher profit margins.
Danone Waters, with the Evian and Volvic brands, is substantially the major player in the branded sector of the still water market, followed by Perrier Vittel (with Buxton and Vittel) and Highland Spring. Within the sparkling branded sector, Perrier Vittel (with Buxton and Perrier) is the market leader, followed by Highland Spring. The fourth-largest supplier to retail outlets, Well Well Well, with its Aqua Pura and smaller Ashe Park brands, is much more significant in own-label production — second only to the major
own-label supplier Campsie Spring. A further important own-label producer is Benjamin Shaw.
After slowing growth predicted for 2001 and early 2002, volume and value growth is predicted for the period to 2006. A large proportion of volume sales are forecast to be still water, by 2006, and per capita consumption is expected to increase.
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| Executive Summary |
| Bottled Water - Market Assessment
There have been a number of social and economic factors that have continued to drive the bottled water market forward, even through the recession of 1989 to 1993. These include the acceptance of 'buying water', with drinking bottled water becoming a more mainstream activity, in the late 1980s and through the 1990s, compared to being viewed more as exclusive or trendy, prior to that time. Additionally, changes in work and lifestyles have benefited the market. The trend away from family mealtimes and towards individuals eating when convenient to them, in part as a result of the increasing numbers of working women, has led to significant growth in the value of 'convenience'. Also, the recession led, through sweeping redundancies, to leaner resourced companies and fewer employees having to cover more work. This resulted in an increase in working lunches, featuring takeaway foods and drinks, at the expense of restaurants.
But, arguably, the main driver has been the continuing interest in health and fitness, aided by programmes and articles in the media, which has led younger females, particularly, to buy and drink bottled water. Producers, thus, very often use sport and fitness related images in their promotions. This health factor has been supported by occasional drinking water pollution incidents (e.g. chemical spills, leaching of fertilisers, etc. into rivers), increasing the numbers of people drinking bottled water. Lastly, the weather is, undoubtedly, an important factor in market growth, with spells of hot weather increasing sales of bottled water substantially. However, 2000 was a very poor year for sunny weather, yet bottled water sales still showed a significant increase.
The consequent dynamic nature of the bottled water market, showing strong volume and value growth and significant changes in its segmentation, has been the reason for Key Note continuing to cover the sector. Attracting younger (and female) purchasers, in particular, the market has switched from being split equally between sparkling and still water, to substantially still, and from supply being met significantly from imports, to UK sourcing. This has led to the spring (and 'table') water segment increasing at the expense of natural mineral water.
The major sources of data used have been ACNielsen, whose retail audits cover all the most substantial outlets in detail, and Zenith International, whose research covers the total soft drinks market. Additionally, NOP has been exclusively commissioned by Key Note to investigate agreement to selected statements regarding purchasing and consumption of bottled water, with answers identified principally by sex, age group, socio-economic status and geographic region. As a whole, this report presents the most complete and up-to-date coverage of an important grocery sector, with information on market size and segmentation, producers and retailers, market and consumer trends and forecast sales, over the next 5 years.
Bottled water has increased its share of the total soft drinks market 1990, to and 2000. Volume share is predicted to continue to increase over the period to 2005. A substantial proportion of sales are estimated to have been made through retail outlets, in 2000, with the remainder being made through the on-trade and catering outlets and 18% through use in office water coolers.
A dominant, and increasing, share of retail sales of bottled water, according to ACNielsen's retail audit coverage, goes through grocery multiples/co-ops . The balance is made through petrol station forecourt shops, grocery independents, off-licences and CTNs (confectioners, tobacconists and newsagents). However, ACNielsen does not cover the wide range of other outlets through which bottled water is available. These include variety stores, medicines/toiletries retailers, department stores, sandwich and snack shops, kiosks, railway/airport shops, garden centres, etc., and it is estimated that retail outlets other than grocery multiples could account for a significant proportion of sales volumes. The fact that sales by value substantially exceed volume, through these smaller 'impulse' outlets, makes them of significant interest to producers of bottled water brands, particularly those who do not make for own label. These producers can largely avoid competition with
own-label brands, at these outlets, and also achieve higher profit margins.
Danone Waters, with the Evian and Volvic brands, is substantially the major player in the branded sector of the still water market, followed by Perrier Vittel (with Buxton and Vittel) and Highland Spring. Within the sparkling branded sector, Perrier Vittel (with Buxton and Perrier) is the market leader, followed by Highland Spring. The fourth-largest supplier to retail outlets, Well Well Well, with its Aqua Pura and smaller Ashe Park brands, is much more significant in own-label production — second only to the major
own-label supplier Campsie Spring. A further important own-label producer is Benjamin Shaw.
After slowing growth predicted for 2001 and early 2002, volume and value growth is predicted for the period to 2006. A large proportion of volume sales are forecast to be still water, by 2006, and per capita consumption is expected to increase.
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