The number of water coolers in the UK registered a slight dip in 2008 as more consumers and businesses return to tap water, according to recent research.

A report on UK Water Coolers from food and drink consultancy Zenith International, published this week, says that there were 694,000 coolers in the country at the end of last year, a 12% lift on five years ago but 3% less than in 2007.

There are now 412 water coolers for every 1,000 VAT-registered businesses in the UK, the report says.

"The UK market experienced very rapid growth through the 1990s and it has certainly slowed since then," said Zenith director Mark Groves. "Most employers now recognise the value of healthy hydration at work, but the economic downturn has led to a recent reduction in the overall number of locations."

The report highlights a move from bottled water coolers to plumbed-in mains water coolers, known as point of use coolers. In 2003, point of use accounted for 14% of the total. By December 2008, its share had risen to 38%.

"Most coolers are located in offices or other places of work," Groves said. "Point of use has proved particularly popular in hospitals and schools. The average cost of a cooler is around GBP250 a year including cups and sanitisation, so it's a relatively modest expense for a material employee and consumer benefit."

The industry's two leading companies are Eden Springs and PHS Waterlogic, each with around 100,000 units. Third placed Powwow Water Company was bought by Lomond Hills from Nestlé Waters Powwow in December 2008. Angel Springs and Culligan International are the only two other companies with more than 20,000 units.

After a further small market decline, Zenith said it expects a return to gradual growth, taking the total number of coolers to 750,000 by 2015, when there could also be more point of use than bottled coolers.