The bottled water markets of Asia and the Middle East now account for almost a third of all bottled water sales in the world.
According to a report commissioned by the Asia Bottled Water Association (ABWA) and conducted by food and drink consultancy Zenith International, bottled water sales in the 50 countries covered by report have more than doubled in the past four years to 43 billion litres in 2002. This represents 30% of the global total, a substantial leap from 21% in 1997.
“Tough economic conditions, the struggle for stability in the Middle East and most recently the SARS outbreak in Asia have tested all fast moving consumer goods markets,” said Zenith research director Gary Roethenbaugh. “What is notable about bottled water is its ability to weather the storm. It is a very robust beverage sector that has capitalised on the overriding need for pure water from a trusted source.”
“Bottled water companies are now creating tremendous opportunities, yet challenges remain,” said Ita Thaher, ABWA secretary general. “Regulating bottled water quality is vital to control the practices of unauthorised, often unscrupulous, operators. Only through the finest quality bottled water will consumers benefit fully from the virtues of its health giving hydration.”
Within the four regions- Asia, Middle East, North Africa and Transcaucasus – covered by the research, Asia and the Middle East achieved the strongest volume increases, but their profiles are quite different in nature. Asian markets are often young and emerging, with evolving distribution structures and a rapid influx of new players. The Middle East also has some new emerging markets, but is generally characterised by a mature and well-established bottled water industry.
Among the main findings of the study were that:
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* Despite price pressures, 16% volume growth in 2002 boosted market value to US$8.6 billion.
* Average consumption per person has more than doubled in five years from 5.2 litres in 1997 to 11.1 litres in 2002. This is after allowing for a 7% population increase. Everyday usage has contributed to particularly high levels in many Middle East countries.
* Asia is by far the most important region, with 24 countries accounting for 75% of 2002 volume. The 15 countries of the Middle East claimed a further 23%.
* Out of the 50 markets tracked for ABWA, there are now nine countries where bottled water consumption exceeds 1 billion litres. Seven of these are in Asia – China, Indonesia, Thailand, South Korea, India, the Philippines and Japan. The two remaining countries are Turkey and Saudi Arabia in the Middle East.
* In Turkey, the closure of unlicensed water stations spurred the rapid advance of pack sizes above 10 litres. Across all 50 countries, this segment has made the greatest gains. The differing roles of home and office delivery (HOD), alongside small pack sizes for on the go hydration, are shaping many bottled water markets.
“Asia and the Middle East have pushed out the boundaries of opportunity for bottled water,” said Roethenbaugh. “Many more consumers now rely on bottled water for daily use, turning to it in preference to poor quality mains water.”
The principal issues identified by Zenith as key to the future are developments in the ongoing acquisition trails and route to market strategies of the major international bottled water players – Nestlé, Danone, Coca-Cola and PepsiCo. Zenith also highlighted the threat of price erosion, the need to uphold quality standards, the relentless pace of structural change in retailing and the entrenchment of bottled water consumption habits.
Going forward, Zenith expected a buoyant market to brave testing conditions and pass 70 billion litres by 2007.
